Byju’s aims to be profitable by FYE 2022 despite acquisition spree

“The edtech space in India is so large that even at the current scale, we are barely scratching the surface,” Anita Kishore, chief strategy officer at Byju’s, tells Tech in Asia. She says there’s room enough for several big players to coexist.

But as the edtech behemoth acquires one startup after the other, its competitors may soon be left scraping the barrel.

The company has made 15 acquisitions since 2017, of which eight came this year alone.

In the last eight months, Byju’s has spent more than US$2 billion on acquisitions, consolidating market share in an industry that picked up significant momentum during the pandemic. The company’s biggest bets include Aakash Educational Services in the test preparation segment, Great Learning in the upskilling space, and Epic in the e-learning and digital reading domain.

“Each of these acquisitions will allow Byju’s to expand its product offering and geographical reach while also creating significant synergies,” says Ankur Bansal, co-founder and director at BlackSoil, an India-based venture debt fund.

Breaking down the numbers

Co-founded by Byju Raveendran in 2011, the online learning platform’s core business has already turned profitable. The company’s principal offerings involve providing personalized learning to students across grades, including the K12 and test preparation segments, which run on a subscription-based revenue model.

Photo credit: Byju’s

The Bengaluru-based firm says it has grown at a compounded annual growth rate of 100% for the past five years and is likely to grow at an even faster clip this year.

Excluding subsidiaries, its primary business broke even in the financial year ended (FYE) March 2019, according to data from Tofler, an India-based business intelligence platform. Byju’s earned a little over 200 million rupees (US$2.7 million) in profit during that year. That figure jumped over 150% to 507.6 million rupees (US$6.9 million) in FYE 2020.

At a group level, however, its losses widened almost 30x to US$35.9 million in the fiscal year 2020.

Notably, the group came close to overall profitability in FYE 2019, according to its regulatory filings with India’s Ministry of Corporate Affairs. The company’s consolidated business includes other verticals like upskilling and coding besides the K12 and test preparation segments.

The deepening of its consolidated losses in FYE 2020 was a result of the company’s aggressive acquisitions and marketing efforts. By March 2020, the firm had already absorbed five companies.

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