Byju's, India's most valued private internet company, on July 26 said it has acquired upskilling platform Great Learning for $600 million and that it will invest $400 million more in this segment, as it looks to expand its education services globally across categories.
The acquisition is the latest step by Byju Raveendran, its billionaire founder and CEO, towards taking Byju’s public in the next 12-18 months. Byju’s is open to listing in India or the US or both, Raveendran told Moneycontrol in an interview.
The cash and stock deal, with some future payout planned too, is Byju's fourth acquisition this year and will help expand its offerings beyond the K12 (kindergarten to 12th grade) and test prep segments into the professional upskilling space, where firms like Eruditus and UpGrad are building sizeable businesses too.
"This will enable us to enter a new space that has very high potential in terms of the opportunity. It is a highly competitive space but they have been able to create something that is very efficient," Raveendran said.
Great Learning has tied up with institutions such as Stanford University, MIT, National University Singapore, IIT Bombay, and Great Lakes Institute of Management to offer programs in areas such as Business Analytics, Data Science, Machine Learning, Cyber Security, and Digital Marketing. It offers these programs in both classroom and online mode and claims to have impacted over 1.5 million professionals and students from 170 countries, with a completion rate of over 90%.
Founded in 2013 by Mohan Lakhamraju, the former India head of hedge fund Tiger Global, Hari Krishnan Nair, and Arjun Nair, Great Learning is boot-strapped and has crossed a revenue run rate of $100 million in FY21. It will continue to operate as an independent unit under the Byju's Group, with its founding team staying on.
Other Indian ed-tech companies that target this segment include Eruditus, Simplilearn, and Upgrad. Eruditus and Byju's both count Sequoia and other investors in common.
Great Learning is the latest in a spree of acquisitions that Byju's has made in the last year, as it looks to consolidate its leadership in the online and offline learning space across categories and different geographies.
It comes a week after Byju's acquired US-based reading platform Epic for $500 million, as part of which it also announced a $1 billion investment in North America, supposedly one of its biggest markets. Its other US-focussed acquisitions include educational games maker Osmo and coding startup WhiteHat Jr. It recently launched Future School, an online one-on-one live learning platform for math and coding aimed at countries such as the US, UK, Brazil, Mexico, and Indonesia.
Byju's extended shopping spree has prompted shock, awe, and even memes on the lengths that Byju's will go to cement its leadership. Social media users for example joked if Byju's will now start buying government-run national boards of education and if it's India's answer to Thrasio- with its formidable house of brands.
"The fact that it is a meme means I don't need to have a reaction. The education space is still under-invested", he said
Byju's acquisitions are also in lockstep with an ongoing fundraising round, which could end up at $1.25 billion. As part of this, it recently raised $350 million from UBS, Blackstone, ADQ, Phoenix Rising & Zoom founder Eric Yuan, at a valuation of $16.5 Billion, making it India's most valuable unicorn. According to data from CB Insights, Byju's is now the 11th most valuable startup in the world. Its revenue doubled in the pandemic year as more students relied on online classes and stood at Rs 5,600 crore for the year ended March 2021.
The investor appetite in Byju's comes amid a funding boom in the Indian startup ecosystem and a rush of Internet IPOs. While Zomato's public listing received an overwhelming response, other unicorns that plan to list in India this year include Paytm, PolicyBazaar, Nykaa, and Delhivery.
"It is good to see investors valuing growth. But our timelines are not based on others. We are open to listing in India or the US and will evaluate it in 12-18 months," he said.
Raveendran also sees opportunities for Indian edtech startups open up further given the crackdown by Chinese regulators on their native edtech companies. The Chinese government said these venture-funded education firms should be treated as not-for-profit firms, and the private ones will not be able to list. The listed techs saw their stock prices crash over 70%, sounding a death-knell to an active sector."I still believe these companies are the reason why China became a force. This might turn out to be an advantage for India, as more investors might come here,” Raveendran said.