Tencent adds to its string of pearls in India – Practo, Hike, Flipkart, and now Byju’s

Photo credit: Byju’s.

Byju’s is already India’s best-funded edtech startup by far. Last year in March, it had a funding round of US$75 million from Sequoia Capital and Sofina, which was larger than the combined capital raised by the top 10 edtech startups in India until then.

This was followed up with a US$50 million series D round a few months later from Sequoia and the personal fund of Facebook honcho Mark Zuckerberg’s wife, Priscilla Chan. In December, the World Bank’s investment arm IFC put in US$15 million, and this year year in March Belgium’s Verlinvest joined the growing roster of investors with US$30 million.

Today Byju’s announced an undisclosed amount of investment from China’s Tencent, which has been increasingly active in India. It led the US$1.4 billion mega round in April to revive the fortunes of ecommerce leader Flipkart in its battle against Amazon. Other investments include health tech leader Practo.

Tencent is an active investor in the edtech space in China. Last year, it pumped in US$40 million in Yuanfudao, which targets China’s middle school and high school test takers. Earlier, it bet on private tutor marketplace Enjoy Learning, English teacher ABC360, and after school tutoring app Entstudy.

The backing from Tencent strengthens the scope for Byju’s to scale up faster and consolidate its position at the top of the pile with acquisitions. It already has 450,000 paid subscribers for its app providing personalized learning to K-12 school students. Byju’s revenue more than doubled to US$40 million in FY 2016-17, and it claims to have turned profitable in the last quarter.

“This year we expect the revenue to double again and we will be profitable on a full year basis,” says Byju Raveendran, founder and CEO of the eponymously named startup, in a statement on the funding. “This round will help us leverage our expertise in creating tech-enabled programs to cater to the learning requirements in new markets.”

Screenshots of Byju’s.

See: Looking for funding? Here are the 10 most active investors in India

Tencent mojo in India

Chinese consumer internet giant Tencent’s initial foray into India was with its instant messenger Wechat. It launched the app in 2012 but it failed to make any waves in the country where WhatsApp ruled and continues to do so.

In August 2015, Tencent made its first Indian investment by leading a US$90 million series C round into healthtech company Practo. It followed up on its bet with a US$55 million series D into Practo early this year.

Tencent then backed India’s homegrown instant messenger Hike last year. It led a US$175 million series D funding round in which Hike’s previous investors Tiger Global, SoftBank, and Bharti Enterprises participated.

The investments in Practo, Hike, Flipkart, and now Byju’s, seem to point to a pattern of betting big on homegrown leaders in India’s rapidly growing consumer internet space.