Byju's, an edu-tech company, announced on Monday that it had raised $75 million from Sequoia India and Sofina. The company, which kick started in 2011 and launched its app six months ago, boasts of 2.5 million downloads and a subscriber base of 120,000.
The company said it uses teachers, machine learning tools and videos, to give students customised and personalised instructions.
But edu-tech has been struggling to make a breakthrough especially as students in India have not been too keen on relying on apps as their primary source of learning. Experts argued that this meant, to pull in customers the ticket sizes were small and the only way edu-tech companies could break through would be to get a huge volume of students.
A VC who has funded an edu-tech startup said Indian students preferred physical learning than virtual, which is why the customer numbers remained low. GV Ravishankar, managing director, Sequoia Capital India Advisors, said that perception was a problem and Byju's was trying to solve it with content. The company boasts of a 90 per cent retention rate and an engagement of 40 minutes a day.
The company also argues that their ticket sizes are larger than the others making it a viable business model. "We have an average ticket size of Rs 1,000 a month," said Byju Raveendran, founder and chief, BYJU's. He explained that the app is adding 20,000 students a month.
The latest round of funding allows the edu-tech company to change its content delivery format, expand its product pipeline and launch in new markets. The company is currently in India and West Asia and plans to go to "several" English-speaking countries in the world. Byju's is also on a hiring spree and has hired more than 600 in the past two months.
It already has 400 people in its R&D team, which consists of videographers and researchers who model the course material.
"For lower grades we want to replace the app with tuition classes. We understand that it will be difficult to do that when the stakes are higher but we believe that will happen as well," said Raveendran.
In the past 12 months, the edu-tech company has seen a "ten fold" increase in the number of customers, primarily after the app was launched.
A statement released by Sequoia India said that they had observed Byju's for a while and were excited to participate in the company's growth.
"What excites us about Byju is not just the market potential but also his sheer commitment and passion to democratize access to education in India in a way that's never been done before," said Ravishankar in a statement.
