Byju’s IPO : Should you invest ?

June 20, 2021

online education

“There’s no established playbook in edtech. We’re all figuring it out. It is freeing from a product-design perspective. You have to create mission-oriented teams that can build a lot of new ideas,”  Ranjith Radhakrishnan, Chief Product Officer at BYJU’S


Founded in 2011 by Byju Raveendran and his wife, Divya Gokulnath who were both teachers and turned to entrepreneurship when the Internet funding wave took off in India after 2010. Raveendran started by uploading videos on YouTube under the Byju’s handle, explaining primary and high school concepts like algebra and probability. From 2015 till March 2020, BYJU’S had garnered 45 million free users on the platform, with 3.5 million paid subscribers.


Co-founder and chief executive Raveendran currently own 19.76% of Think & Learn Pvt Ltd, the parent entity of the Byju’s brand. South Africa-based Internet and media giant Naspers Ventures BV is the second biggest shareholder which owns a 10.77% stake in Think & Learn. Raveendran’s brother Riju Ravindran owns a 7.91% stake, making him the fifth largest shareholder, while the other co-founder Divya Gokulnath currently is the eighth largest shareholder with 4.05% ownership stake in the parent company. Other shareholders including investors, promoters, and employees (via ESOP pool) owns the rest of the shares.

Strategy and Business Model

  • Chase growth and capture market share rather than chase profitability. The vision that drives the company is its global scale and reach.
  • Huge investments in marketing – May generate trials of their product but after that sales team has to reach out to students to get them to sign up.
  • Increasing its penetration into tier 2, tier 3 and tier 4 towns
  • Note: Recent heavy investments in office space in Bangalore. This should be avoided.
  • High price points of its annual subscriptions – Rs 15,000 to Rs 20,000 per year in subscription, BYJU’S price point is high and unaffordable for students beyond metros. If the product doesn’t deliver as much quality as it should for that price point then Byju’s may lose customers.
  • Personalisation and Engagement: Byju’s invested heavily in the process of personalising content, getting students to participate, and understanding their individual learning paths. The investments were made in simulations, and gamified learning. All this increases a child’s engagement with the platform. This is kind of Netflix of education.
  • Creating content in regional languages:  To increase the reach.


The Indian ed-tech sector is projected to become a $30 billion industry in 10 years, according to a recent report by transaction advisory firm RBSA Advisors. Gross margins in Edtech are high, in the 60-70 per cent range, compared to e-commerce or the real estate co-living segment. Consolidation continues to headline the edtech market in India. Vedantu along with Unacademy and Byju’s are looking to expand through the inorganic route. Like in other industries, like Flipkart – Amazon, Uber-Ola, Zomato – Swiggy, only 2-3 players are expected to stay.

COVID Pandemic

The pandemic has helped edtech startups sign up thousands of paying customers. Covid has been an inflection point for education where screens have become the primary mode of content consumption for students. It has forced millions of children to go online to learn and the new national education policy places significant emphasis on digital learning. Edtech and health tech are the two sectors among startups that have performed well despite the covid-19 crisis.

Note: Indian Middle Class and Indian Parents

Indian parents continue to find new courses or classes that their children have to learn to cope with the rat race. They cram their children’s day with non-stop activities from tuitions to Bharatnatyam, and now online courses. Whitehat Jr. is one such new online opportunity that is about coding for six-year-olds, because if they start young, they can become the next Zuckerberg.

With COVID and parents working from home keeping a constant eye on their children, online courses became the go-to thing for Indian parents to continue their hyper productivity schedule for kids.


Byju’s has been on a buying spree and had recently acquired Aakash Educational Services in a cash-and-stock deal estimated at $950 million. This was the largest buyout in India’s online education sector.

Acquired company Expertise Amount paid by BYJU’S

Aakash Educational Services

India’s leading test preparation institute

$ 950 million

Osmo Augmented Reality game maker and learning platform for kids $120 million
White Hat Jr Coding startup for kids $300 million
LabInApp Lab simulation startup Undisclosed
TutorVista Online tutoring in the US Undisclosed
Math Adventures Activity-based math learning platform Undisclosed
Vidyartha Assessment platform Undisclosed
  • Aakash with Byju are looking forward to create the biggest omni-channel offering in the test-preparation sector. Synergies that can benefit Aakash will be on technology side as they will be able to offer a lot more products and also will be able to increase reach with the new products. Aakash closed FY 2020 at 1,240 crore will be closing FY21 also in profit. For five years till FY 2020, they clocked 25 per cent CAGR in revenue, and EBITDA of around 29 per cent.
  • Byju’s made its fifth and largest acquisition of WhiteHat Jr., which teaches coding to kids, in an all-cash deal worth $300 million. White Hat Jr. barely 20 months old was valued at over Rs 2,250 crore which is about Rs 400 crore more than the combined market capitalization of NIIT Ltd and Aptech Ltd,  two of India’s oldest and largest computer training companies. WhiteHat Jr said its revenue run rate – extrapolating an annual revenue figure based on one month’s actual revenue – ballooned from just $75 million in June to $220 million in August. In October 2020, the Advertising Standard Council of India deemed some WhiteHat Jr’s commercials “misleading” and asked for them to be taken down.


It is estimated that Byju’s revenue doubled to Rs 5,600 crore in FY 20-21 compared with Rs 2,800 crore the year before. During the lockdown last year, Byju’s had doubled its revenue from 1,430 crore to 2,800 crore in 2019-20. However, Byju’s has not been able to achieve its target of $150 million ( Rs 1100 Cr ) in net profit during FY 20-21.

According to Byju’s, more than 80 million students, including 5.5 million annual paid subscribers, use its services. The annual renewal rate is 86% and the company added 45 million new students in the first six months of the lockdown last year.


After its latest funding round, Byju’s is valued at around $16.5 billion. This makes it the most-valued startup in India, ahead of Paytm which is valued at $16 billion.

Byju’s was valued at around $8 billion in Jan’20 when it raised $200 million in equity funding from New York-based hedge fund Tiger Global Management. That round had elevated Byju’s valuation by 45%. Since then, Byju’s valuation has continuously been increasing.

Should you invest ?

Byju’s has been around 10 years. They have got their most rapid growth in the last couple of years, due to COVID, and increase of internet access across India. This growth is expected to continue, however, it remains to be seen if post COVID, kids would continue to study online, or reduce the online learning. During lockdown, it is a compulsion, but in future, kids and parents would chose based on the comparison with other modes. Is the same growth expected in tier 2 and 3 cities, at the same price point is also a question. Also, the quality of the content, percent of time digital would occupy in kid’s education are other questions.

Valuation is based on expected growth and these are volatile times, we would suggest to go into more detail of ed-tech market and the internal working of the company before investing.

Disclaimer: has used the above figures and numbers from the below mentioned references. Investors are advised to check with certified experts before taking any investment decisions.



Strategy Boffins Team



January 2024 update

Byju’s, once a shining beacon in the edtech sector, is currently navigating through a tumultuous period marked by significant financial and operational challenges as of early 2024. The company, which had attained a valuation of $22 billion, is now facing a drastic valuation cut, governance issues, and insolvency proceedings, signaling a critical juncture in its journey.

Valuation and Financial Turmoil: Byju’s is attempting to raise funds by significantly slashing its valuation. A stark indication of its financial distress is the effort to raise more than $100 million from existing stakeholders at a valuation less than $2 billion, a dramatic fall from its previous $22 billion valuation. This move comes after Byju’s investors, including prominent names like Prosus and BlackRock, marked down the company’s valuation by up to 95%. The company has also embarked on a rights issue, aiming to raise $200 million at a $25 million pre-money valuation to meet its liabilities and operational costs.

Governance and Leadership Challenges: A consortium of Byju’s investors, frustrated with the company’s governance and financial mismanagement, has called for an extraordinary general meeting (EGM) to address these issues. They are pushing for a reconstitution of the Board of Directors and a change in leadership, highlighting the escalating tension between the investors and Byju’s founders. This investor discontent follows a series of governance issues, including abrupt board member resignations and the resignation of global auditor Deloitte over grievances.

Insolvency Proceedings: Byju’s is also grappling with insolvency proceedings initiated by a group of foreign lenders led by GLAS Trust Co, following the company’s struggle to repay a substantial $1.2 billion loan. The lenders decided to take this step after 16 months of efforts to restructure the company’s loans. Byju’s has responded by stating that these legal proceedings do not accurately reflect the company’s financial standing.

Strategic Missteps and Operational Hurdles: The company’s strategic decisions, particularly its aggressive acquisition spree, have come under scrutiny. Byju’s has made several high-profile acquisitions over the years, including Aakash for about $1 billion and Great Learning for about $600 million. However, the strategic intent behind these acquisitions has been questioned, especially as the company now looks to sell some of these assets, such as the US-based digital reading platform Epic.

Looking Ahead: Despite the immense challenges, Byju’s is making efforts to stabilize its operations and financial standing. The company’s ability to navigate through these issues will be pivotal for its future trajectory in the highly competitive edtech sector. The outcome of the proposed EGM and the success of its fundraising efforts will be critical in determining whether Byju’s can regain its footing and continue its mission of revolutionizing education through technology.

In summary, Byju’s is at a critical crossroads, facing a confluence of financial, governance, and strategic challenges. How it addresses these issues will be crucial for its future stability and growth in the evolving edtech landscape.