Barely a month after American hedge fund Tiger Global invested USD 200 million in the world’s most valuable ed-tech startup Byju’s, the Bengaluru-based unicorn has raised another USD 200 million from New York-based private equity fund General Atlantic.
The Tencent-backed startup late last week said its existing investor General Atlantic has put in additional money, without disclosing the funding size. A TechCrunch report, citing sources, said the ed-tech giant has bagged USD 200 million, at a valuation of USD 8 billion.
In December, the nine-year-old startup, which also counts Sequoia Capital, Naspers, and Mark Zuckerberg’s Chan Zuckerberg Initiative as backers, said it posted a net profit of USD 2.8 million on the revenue of USD 188.8 million for the financial year ended March 2019. This makes Byju’s the only profitable Indian technology unicorn.
The company has further claimed that it is on track to double its revenues to USD 421 million in the current financial year.
Founded in 2011 by Byju Raveendran, Byju’s offers app-based learning programs for class 1-12, preparatory courses and classes for entrance exams including IITs (Indian Institute of Technology), IIMs (Indian Institute of Management), and IAS (Indian Administrative Services)–the three most popular career choices among Indian students.
In December 2018, after raising USD 540 million from South Africa’s Naspers and Canadian state pension fund, the online tutorial startup’s valuation rose to USD 3.8 billion making it the most-valuable education technology company in the world. It has raised about USD 1.45 billion till now from an array of local, American as well as Chinese investors.
According to the TechCrunch report, Raveendran, Byju’s founder and chief executive, said the new investment illustrates “an ever-increasing acceptance of our learning programs in small towns across the country.
The app claims to have over 42 million registered users of which three million, less than 1% of the total, are paid subscribers. Currently, over 65% of the app’s students come from beyond the top 10 Indian cities. The company is now working on launching programs in vernacular languages to make it accessible in the deeper parts of India.
Investors who KrASIA spoke with said ed-tech is going to be one of the hottest sectors for 2020.
In a recent interview with KrASIA, Hans Tung, managing partner at Singapore- and US-based venture capital firm, GGV Capital, said he is looking at the education sector closely this year as it is one of the only few sectors that would grow despite the economic slowdown.
“Indian parents spend a lot of money on the kids on education. So in that respect, we think that it’s a great market. We’re bullish on education,” said Tung. “In India, each year, there are 2.6 million STEM (science, engineering technology, maths) graduates, while China has about 4.2 million. So the number of Indians who go through science and engineering education is immense. And then they strive to get good jobs afterward. So the return on investment is very obvious and proven.”