Digital learning startup Byju’s could more than double its valuation to $2.2-2.4 billion in an upcoming funding round, in which it could raise as much as $300 million, according to a report in the Mint newspaper on Monday.
Byju’s is the only Indian Unicorn (private company valued at over $1 billion) that claims it is already profitable, with over 120,000 primary and secondary school students subscribing to its paid service. The company says it can grow that number by 100 times to 12 million in the next five years.
The company’s high growth comes from not just new user additions, but also students who subscribe to its service on a yearly basis as they go through higher grades. In terms of revenues, Byju’s expects to hit the Rs 10-12 billion mark in FY19, a more than 100 per cent growth compared to the previous year.
“Since we launched the app three years ago, we’ve been growing at 100 per cent in terms of revenue and this year we’re expecting to grow more than that. Because the renewal base is so big and will keep increasing year-on-year we don’t have to add double the number of students to grow by 100 per cent,” Byju Raveendran, founder and CEO of Byju’s had told Business Standard in an interview.
Raveendran said that over 85 per cent of students who sign up for Byju’s service come back to it the next year. It takes 12 years for a student to complete primary and secondary school in India and the company wants to become the learning partner for every student over this entire cycle.
India has close to 260 million students, which is higher than even in China, making for a huge opportunity for technology-enabled learning services. The lack of qualified teachers in the country adds to the potential of services like Byju’s, and this even drew the attention of the Chan Zuckerberg Initiative, the philanthropic fund of Facebook founder Mark Zuckerberg and his wife Priscilla Chan which led a $50 million investment in the company in September 2016.
On valuations, Raveendran said that Byju’s enjoyed a good valuation since it wasn’t a cut-copy-paste idea from some other part of the world, like so many other startups in India today. This, along with an already profitable business and a huge market is what has driven Byju’s valuation up.
“Our model is creating a new segment, it’s simply not a cut-copy-paste of some model from the US or China. Even countries which are way ahead of in digital infrastructure and physical infrastructure haven’t created something like this, which is why it’s very exciting from a global investors' point of view,” added Raveendran.