The Byju Raveendran story is what normally makes for best-selling fiction, and even better celluloid dreams. Except, for this teacher-turned-entre- preneur, it’s very, very real. From Azhikode, a small coastal village in Kerala, to straddling global markets with the eponymously named Byju’s, Raveendran has succeeded in becoming one of India’s youngest billionaires by building the country’s largest edtech firm till date. It all started as informal sessions and classes being held on the terraces of homes and assorted cafes, and helping friends crack competitive exams like the Common Aptitude Test (CAT). Raveendran went on to launch Think and Learn Pvt. Ltd. — the parent company that owns and operates Byju’s — in 2011 with wife Divya Gokulnath, which has grown to become India’s second most-valued unicorn with 100-million registered users and 6.5-million paid subscribers.
From offline coaching classes in 2007-08 to an online model in 2015, Byju’s has come a long way. As evident from the string of marquee global investors who have backed the company in the last few years, including UBS Group AG, Silver Lake, General Atlantic, Tiger Global Management, former Wall Street securities analyst Mary Meeker’s venture capital firm Bond Capital, Israeli-Russian billionaire Yuri Milner’s DST Global and BlackRock, among others.
Despite Covid-19 disrupting businesses across sectors, Byju’s last year raised $1.4 billion in funding. This year also the edtech major attracted the lion’s share of funding in startups so far.
The ambition has evolved over the years, but is now clear — global edtech dominance, enabled by a steady juggernaut of strategic acquisitions and tailored fast-growth strategies.
The Idea!
The business is a clear case of passion intersecting with a real need. I became a self-learner very early on, because the government school I went to in Azhikode was good, but not the best. I quickly became a strong believer in self-learning. I loved science and maths — and the love for learning soon progressed to teaching. It began with teaching maths to the children in the neighbourhood, and then friends and college kids for competitive exams, wherever we could find space. The first formal session was for 40 students at a college classroom in Bengaluru. And then I was addicted — teaching became a passion. Sessions moved from classrooms to auditoriums to filling entire stadiums. I wanted to reach as many students as I could. That’s why, we transitioned from offline to online in 2105 [Byju’s first learning app was launched]. The impact was tremendous — we could scale subjects, age groups, markets. That’s how I grew too — as Byju’s did. A teacher by choice, and an entrepreneur by chance.
Early Struggle
At every stage there is a challenge when you are building something. We didn’t start Byju’s with a business model. It evolved over time. In the early days it was all based on what students wanted. We did this [offline classes] for 11 years from 2004 to 2015. During offline classes the biggest challenge was how do we replicate it in more cities and get teachers on board. In 2009 we started experimenting with technology VSAT [a satellite communication system]. We set up VSAT centres across 40 locations, mostly campuses. We did this for four-five years. I used to take one class and beam the recorded video across cities.
To figure out the right blended model was a challenge — The right mix of online and offline. Creating awareness for the segment was our biggest challenge.
Make Or Break Moment
There is no such single moment which I can point out. But there are important turning points in our journey such as moving from offline to online, and transitioning from stadium-based sessions to online classes. We had the conviction to make some big changes.
People normally get complacent with success. But we killed the existing offline model — which was a big success — for online. People normally think it is a huge risk killing something which is fairly successful and starting something new
We don’t think we are successful. The day you think you are successful, the game is over.
The Business Model
There is no direct or generic answer to it, but as a rule we have always followed doing things based on first principles — listening to students and then experimenting with it.
The transition from offline coaching classes to a pure-play online model in 2015 [with the launch of the Byju’s learning app] was a big turning point for us. [At present, the app provides learning content for K-12, test preparation courses for engineering, medicine, IAS, and other competitive examinations. It also provides learning programmes in multiple regional languages. Besides some free limited content, Byju’s learning materials are mostly subscription based.]
Tech Challenge
In the initial days attracting tech talent was a challenge because we were not a technology company. Perception was a challenge in the early days. But today it is easier. In the last 12 months it has become a lot easier because the edtech sector is at a stage where people are more familiar and informed about the services and its impact.
HR Challenge
For us the human resource challenge was mostly when we were scaling the sales team at Byju’s. Otherwise we didn’t have much of a challenge with the team overall. We have not lost key people in the organisation. We were able to attract high-quality talent even when we were not a brand or backed by VC firms. We still have the key initial team members with us who helped build the organisation. Out of about 20 people [from the early team] only two have left in the last 10 years. Of the two, one has already joined us back. Across content, media and product team [about 3,000 people] we don’t see any major issue.
Managing Investors
Education is one sector where everyone wants to be involved. But this is also a space where most of them [investors] have lost money. There are no large edtech companies in the U.S. that have scaled rapidly. There is no benchmark in the space that we could follow. To impress investors you should always under promise and over deliver.
We have managed to build the business because of ambition, skill and access to capital. It was very difficult to raise capital in the early days. Byju’s is not a cut, copy, and paste model. I had to explain to investors about the potential [of the business]. It becomes easier once you consistently pack high valuation with value creation.
Marketing & Sales Lessons
For new segments, especially where you need to build a lot of trust, it is important to be ahead of the game when it comes to branding. One thing which I learnt early on is that, purely depending upon performance marketing, and at scale, is very inefficient. You need to find the right balance.
Branding will give you results after 6-12 months provided you do it right. Finding that balance has been key and that has worked out very well for us. In our first pitch to the agency, none of them bought our argument on ‘love for learning.’ They said the message won’t work in India. But kids love that message and they are our primary users. And we knew that if kids start liking it, there is a better chance for us. It is always better and more organic if they influence parents to pay for it, rather than parents pushing it upon kids, which is what we never wanted. That’s why we have stayed true to that in our core segment.
Doing things which are important for today and investing for the future — that is our biggest competitive advantage. We are thinking about how to build something that will last for decades. I’m not in this to do a very large IPO, get a windfall exit, and invest in other places. That’s not me.
When Did You Think You Had Arrived?
There is nothing called you have arrived. First you set a bar you think you can never reach, when you are about to reach there you raise the bar again, and then it becomes an infinite game. There is nothing about winning the game, it is about being in the game. As long as you love doing it, do it.
Riding Through Toughest Times
Every day is a challenge. It’s not easy. You will have more critics than those who appreciate what you do. It’s about perspectives and how you deal with it.
What Next?
We are seeing huge opportunities in India, the U.S. and Latin America. We already have a significant presence in these markets. In the U.S. we have three businesses now — Osmo, Epic, and Byju’s Future School. Osmo is a maker of educational games; Epic is an online library for kids aged 12; Byju’s Future School is an online interactive live learning platform for mathematics and coding. And each of the businesses is expected to do $100 million in revenue this year (FY22).
We will accelerate growth from 100% year-on-year to even higher if we are able to make the new acquisitions work — Aakash Educational Services, U.S.-based Epic, Singaporeheadquartered Great Learning and Mumbai-based firm Toppr. We will continue to invest in newer markets.