Edtech firm Byju’s keeps India focus as revenue growth triples

Amid the slow deflation of the global startup bubble, a little-known edtech company seems to be defying all odds on its way to decacorn status.

Think and Learn, the owner and operator of learning app Byju’s, expects the platform’s revenue to reach about US$200 million for the year to March this year. That’s more than a three-fold jump from the about US$64 million revenue it earned a year earlier, chief operating officer Mrinal Mohit tells Tech in Asia.

Byju Raveendran, the founder & CEO of Byju’s.

If those claims look a little tall, imagine this: Byju’s expects its revenue to double to about US$400 million by March 2021.

Mohit says increasing demand for tech-based educational aids in India is boosting Byju’s growth. “Every year, we realize that the segment is much bigger than what we thought before,” he says.

There are some 500 million people in India aged between 5 and 24 years old, according to the India Brand Equity Foundation (IBEF) – a government think tank. “This provides a great opportunity for the education sector,” it says in its industry report.

India is now the second-largest market for e-learning after the US, IBEF reports. The e-learning segment is expected to reach over US$1.9 billion by 2021, with around 9.5 million users.

The profit mantra

Byju’s has set a blistering pace of revenue growth, and its operating margins are at about 30%, Mohit says. That’s an enviable number for most global startups that are struggling to turn profitable. Margins are high due to the low cost of production relative to the scale, says Mohit.

The pivot toward profitability for tech startups came in the wake of the WeWork fiasco, when the co-working startup pulled its initial public offering after struggling to sell shares at a reported valuation of US$10 billion.

In 2019, total funding for technology startups dropped by 22% from a year earlier, according to research by startup accelerator HexGn. Asia “bore the brunt” with investments down 47%, and deals down 27%, it said.

But education tech companies are defying this trend.

About one-third of edtech companies attracted venture capital funding in 2019, with 1,019 firms raising US$14 billion cumulatively, according to research firm RS Components. Byju leads the pack.

Source: RS Components

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