Founded ten years ago in Bangalore, India, BYJU‘s raised a $350 million Series G round last month led by UBS Group and Blackstone that valued it at $16.5 billion. It is India’s most valuable startup, the world’s most valuable edtech, and the tenth most valued unicorn in the world. It is with all these credentials that the company landed, a few months ago, in Latin America, more precisely Brazil and Mexico, and five other new markets: the United States, England, Australia, New Zealand, and Indonesia.
In India, BYJU’s offers recorded classes products. For its internationalization, however, the startup has focused on a model of live one-to-one classes for children aged six to 14 years old, the so-called BYJU’s Future School.
Operations in Mexico and the U.S. began a few months ago. In Brazil, the company entered its pre-operational phase a little over a month ago and already has 1,500 students enrolled. Worldwide, considering India, the U.S., the UK, Australia, and Mexico, BYJU’s already has more than 100 million students and 6.5 million paid subscriptions.
BYJU’s recently announced a partnership with Disney to use its characters on the platform, and last week bought the reading app Epic for $500 million to expand in the U.S.. The acquisitions spree should not stop there, as Fernando Prado, country manager of BYJU’s Future School in Brazil, tells LABS in an interview.
“The startup capitalized a lot last year, raised over US$1.5 billion [during the pandemic]. No doubt, in addition to the organic expansion push, the expansion will also take place through M&As. We will see the best way and in which markets these acquisitions will work better,” says Prado, adding that he does not rule out acquisitions in Latin America as well.
“BYJU’s is the largest startup in India and it is an education company. Making a parallel, the biggest startup in Brazil is a bank. I don’t know if that says a little bit about our future, our past, or our present, but it’s a very eye-catching thing.”
BYJU’s is evaluating an IPO in 12 to 18 months. Until then, it should receive further private rounds. “The company is very hot, there are a lot of people wanting to embark on this project. I think a lot should still happen in this part of fundraising in the coming months,” says Prado.
What is BYJU’s Future School business in Brazil?
In Brazil, at first, BYJU’s Future School is teaching programming to children but plans to add maths and music soon. “We already see some initiatives in this sense for adults, but our idea is to focus on children. It is a fully customized product,” he explains.
The idea is that in 144 classes – the course is flexible, but usually takes a year and a half – children learn programming in practice, delivering games and programming at the end of each class.
“It’s not like traditional school where you hear a lot of theory. Practice and theory are blended in our course and this is made possible by BYJU’s technology platform, which offers rewards, homework, and projects. It’s learning that comes naturally. Our idea is to make the kid enjoy learning. This is perhaps the most scalable thing we can do because learning is the skill of the future,” he comments.
In the last one-and-a-half pandemic year of COVID-19, children have been forced to learn remotely, which has speeded up the penetration of the startup’s service. “One of the barriers that parents had was that mistrust of the ability to learn online. I think after the pandemic, remote learning is already a fact.”
BYJU’s is investing $1 billion in North America, according to TechCrunch. In Brazil and Mexico, the two largest countries in Latin America, the company should “invest something similar to North America”, says Prado, although he does not reveal the amount for Brazil because, according to him, the amount will be more a consequence of the business than a premise.
“This internationalization push is strategic for the company. Of course, we have a business plan, but we are discovering the market. No doubt these numbers will change. We will invest as much as necessary for our quickly growth”, he says.
In the first year of operation, BYJU’s Future School expects to earn more than BRL 100 million with courses sold in Brazil and surpass the mark of 15,000 students enrolled.
“The potential is gigantic, there are 20 million potential students in Brazil. We already have students and teachers from practically every Brazilian state. That’s a very interesting path to scale.”
Like Uber has partner drivers, BYJU’s has “partner teachers”. Today, 400 women in the tech world teach programming to children through the startup’s platform, and the idea is to reach 3,000 female teachers by the end of 2021.
Among BYJU’s hired professionals in Brazil, the company has a team of 300 people and hopes to double the size by the end of the year.
In Brazil, those responsible for the child can pay for the course by a monthly renewed subscription, which comprises several credits per month, with options starting at BRL 300. They can also choose to pay in full for the complete course.
“Here in Brazil we see a mix between clients who opt for subscription and other clients who pay in full, so this varies in terms of cost. At the moment we are studying, understanding the products that adhere to the Brazilian market.”
According to Prado, BYJU’s is not concerned with solving the problem of a deficit of technology professionals in the job market. The idea is to stimulate children to enjoy learning and prepare for the challenges of the future.
“Obviously, as a company, we aim to grow revenue, but at no time do we give up the quality of education, because that is the basis of the business. Our main KPIs are the NPS of our clients and the ratings we receive from each student. As a consequence, sales will grow, retention will grow. We respect the quality of teaching.”