Naspers Ltd led mammoth funding round raises $540 million for Byju’s, valuing the edtech startup at $3.6 billion and the fourth most valuable startup in India, after Paytm, Ola, and Oyo Rooms.
The Canada Pension Plan Investment Board (CPPIB) and private equity giant General Atlantic also participated in a round that ended up being much larger than earlier anticipated.
Significant investor demand for Byju’s, which is set to grow revenues by at least three times to roughly ₹1,500 crores, also pushed up its valuation considerably.
Byju’s founder, Byju Raveendran, said in a statement, “We are happy to have prominent and long-term partners like Naspers and CPPIB on board with us. This partnership will strengthen our ability to deliver on our vision to build the world’s largest education company. India has the largest school-age population in the world and Indian households are willing to invest a lot in their children’s education because a good education is the best path to success. I believe the importance of quality education among the entire population in India fueled our ability to create an engaging and high-impact learning app,”
“While near-term profitability is important for us, as a company our main focus continues to be on long-term sustainable growth. The edtech industry is undergoing massive shifts; students today want to learn through engaging and interactive methods. We are pioneering ‘better learning for tomorrow’ with technology as an enabler, and have been working towards making students active learners. It is only through active learning that we can prepare our youth for the jobs of tomorrow,” he added.
Byju said that the fresh capital would be used to build new products and that the edtech startup also plans to aggressively expand in international markets.
The latest funding has more than tripled Byju’s valuation from its previous round and cemented its status as one of the breakout startups from India in the past five years. It has also turned Raveendran into an overnight billionaire, as the promoter group—that includes Raveendran and his family—still controls 35-40% in the edtech startup, back-of-the-envelope calculation shows.
In the past three years, Byju’s has exceeded investor expectations. The company, which started out as an offline teaching center in Bengaluru, launched an app in 2015 to increase its user base. It currently offers two separate learning apps- its flagship app caters to the students from Classes VI to XII, while the second targets students of Classes IV and V.The online education startup plans to launch another app for younger students soon.
The move to a digital education platform has been lucrative for the company. In June, Byju’s said that it touched ₹100 crore in monthly revenue and raised its annual revenue target for this year to ₹ 1,400 crores. The company claims it is among the few profitable Indian unicorns.