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Unicorn start-up Byju's scouts for acquisitions ahead of global launch

Business Standard:  January 04, 2019

Bengaluru: Unicorn start-up Byju’s is scouting for acquisitions in key global markets, especially in the US, which the firm believes can become its largest market outside of India.

The firm is evaluating a few companies that either have established products in this space or have good brand awareness in these markets, or a combination of both, Byju Raveendran, founder and chief executive officer of the firm, told Business Standard. The start-up was valued at $3.6 billion after a recent round of funding, making it the most valuable edutech company in the world.

Ahead of its global foray, Byju’s has set up an office in San Francisco and is in the course of establishing direct or indirect presence in other key markets such as Europe and Australia. “In some of these key markets, we are actively scouting for potential acquisition options. There are few names in our mind that obviously I can’t disclose now. But we are just few months away from that,” Raveendran said.

Byju’s is also looking at partnering companies that have some kind of distribution network in those markets. But this is likely to happen after the launch when the company goes aggressive with its marketing after seeing the initial traction. “Product acquisition can be from anywhere. But a product with some brand awareness is a bonus. It’s not easy to find good products and good brand awareness at the same time. Even if we find, they will be expensive,” he said.

Unlike India, where the edutech firm is catering to Class 4 to 12 students, for the global markets, the target age group is going to be 3-8 years. While core content is largely going to be the same, the company is doing a bit of customisation with the help of local experts for the global launch, which is expected to happen in phases between June and September.

“It’s a global product because we have used teachers who are popular over the world. The product has been built in a way that it can be launched in any English-speaking market,” said Raveendran. “We are also expecting equal or better traction from some of the markets where English might not be the primary language but there is a large and growing percentage of students who want to learn English.”

Though US has the potential to become a large market, Raveendran said India would continue to remain the largest for the company, where it already has a base of 30 million free users and 2 million paid ones. In order to expand the product bouquet, the company, backed by globally-known fund houses such as Sequoia, Naspers and General Atlantic, is preparing to launch content for class 1-3 segment in June. Raveendran said the intent was to go “deeper and broader” into India where the firm has just scratched the surface.

In India Byju’s mostly offers solutions bundled with tablets — because of the patchy internet connectivity. Globally, however, it is looking at a different business model. One of the key models the company is considering is offering content from cloud on a monthly subscription basis.

“The infrastructure for delivery of content is already there, especially in markets like the US,” he said. “Besides, subscription as a concept is popular (in the US) across sectors.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.