bought brick-and-mortar coaching network Aakash Institute for close to $1 billion earlier this year.
The Epic acquisition is part of Byju’s big foray into the overseas market where it expects annual revenue of $300 million this financial year, cofounder Byju Raveendran told ET. In 2019, it had
acquired Osmo, a US-based maker of educational games, for $120 million. The Bengaluru-based startup aims to invest around $1 billion in North America over the next couple of years, the company said.
Founded by Suren Markosian and Kevin Donahue, Epic has a user base of 50 million kids in the US who access digital books for free as well as through Epic’s subscriptions. “It is the largest B2C (business-to-consumer) edtech company in the K-12 segment and has a strong product capability that fits well into our overall plan of building an edtech ecosystem,” said Raveendran. Epic had around 20 million users in total in 2019 and grew fast over the last two years.
Markosian and Donahue will continue to run the business.
Byju’s has been
on a fundraising spree since last year as it has been using this capital to finance its large-sized acquisitions. After having
raised $1 billion in 2020 from global and domestic investors, the decacorn has mopped up almost $1.5 billion from investors such as UBS Group, Blackstone, Abu Dhabi sovereign fund ADQ and others in the last few months.
“In some of the new markets, we will be in a growth phase and we will invest to build similar brand and sector awareness (like it did India). With strong organic growth and these acquisitions, we will start adding significant numbers in our total revenue and you will see us accelerating over the next many years even on a large base,” Raveendran said. According to him Byju’s remains well capitalised and the India business is profitable besides generating cash.
“India’s growth is getting accelerated with Byju’s growth and Aakash. With Byju’s Future School nicely scaling (abroad), we will have three businesses overseas that will have $100 million revenue,” he added.
Byju’s is expected to see its revenues rise more than 100% in the current financial year. The company is estimated to have closed FY21 with revenue of Rs 5,600 crore.
Byju’s acquisitions in India have also triggered consolidation here. After
having acquired WhiteHat Jr, Scholr, Osmo and
Toppr, it is in talks to scoop up Gradeup and Great Learning, recent
news reports said. Sources said the company is likely to announce the closure of the Toppr deal in the coming weeks.
At a time when many top-tier startups and tech companies like
Mobikwik are going public, Raveendran said Byju’s is looking at an IPO timeline of 15-18 months but that’s not set in stone as it still sees strong interest from investors in the private markets to raise capital.
The Indian edtech sector is projected to become a $30 billion industry in 10 years, according to a recent report by transaction advisory firm RBSA Advisors.
Some of Byju’s early backers include Lightspeed Venture Partners, Qatar Investment Authority, Owl Ventures, General Atlantic, Tiger Global, Tencent, Verlinvest and Sofina.