Byju’s raises $200 mn from Tiger Global, valuation soars to $8 bn

Bengaluru-based ed-tech Unicorn Byju’s has raised $200 million in a fresh round of investment from New York-headquartered alternative investments firm Tiger Global. The round valued the nine-year-old firm at $8 billion, a person close to the development told TechCircle.

Byju’s confirmed the investment via an official statement, but declined to offer further details on the development.

“We are happy to partner with a strong investor like Tiger Global Management. They share our sense of purpose and this partnership will advance our long-term vision of creating an impact by changing the way students learn. This partnership is both a validation of the impact created by us so far and a vote of confidence for our long-term vision,” Byju Raveendran, founder and CEO, Byju’s said.

Owned and operated by Think & Learn, Byju’s is the best-funded and most-valued Indian startup in the ed-tech segment.

TechCircle reported in July last year that the company had raised $150 million from Qatar’s sovereign wealth fund Qatar Investment Authority and other investors, taking its valuation to $5.7 billion. 

In March, Byju’s raised $31 million from General Atlantic and Chinese technology conglomerate Tencent Holdings.

In December 2018, it had announced a $540 million (Rs 3,855 crore then) funding in a round led by South African tech conglomerate Naspers. 

The ed-tech firm’s other investors include The Chan-Zuckerberg Initiative owned by Mark Zuckerberg and wife Pricilla Chan, Belgium-based Verlinvest, Sequoia Capital India and Lightspeed Venture Partners.

Interestingly, Byju’s is Tiger Global’s second ed-tech portfolio in India. In August, it co-led a $42 million funding round into online tutoring startup Vedantu , marking its entry into India’s buzzing edtech scene. Vedantu follows a vertical approach to video-based online tutoring, focussing mostly on classes 8, 9, 10, 11 and 12. It primarily competes with Steadview-backed Unacademy and Times Internet and Gradeup.

“Byju’s has emerged as a leader in the Indian ed-tech sector. They are pioneering technology by shaping the future of learning for millions of school students in India. We are excited to support Byju and the team,” Scott Shleifer, partner, Tiger Global, said.

Founded in 2011, the venture runs learning apps for school students and produces all its content in-house. Byju's originally started off as a coaching platform for competitive entrance exams and for students studying between classes 6 and 12.

Its flagship learning app was launched in 2015. In 2018, it launched content for students from classes 4 to 5, which helped the firm accelerate growth and then targeted students in class 1-3 segment with another app last year, which essentially completed its learning offerings from grades 1-12.

The company said it’s also working on launching programmes in vernacular languages and is looking to venture into online tutoring in the coming months.

The company now has over 42 million registered users and 3 million paid subscribers. It claims that the average number of minutes a student spends on the app has increased from 64 minutes to 71 minutes a day over the past 12 months and the annual renewal rates are as high as 85%.

In January, the ed-tech Unicorn forayed into the United States with its $120 million acquisition of Osmo, a learning platform.

Byju’s narrowed its losses more than four-fold in the financial year ended March 31, 2019, even as its expenses vaulted more than 150%. Its losses for the year stood at Rs 8.8 crore against Rs 37.1 crore in the previous year. Overall expenses during the same period stood at Rs 1,376.5 crore against Rs 537.3 crore in the previous year.

The company was able to narrow its losses significantly despite the jump in expenses on account of a 177% growth in operational revenues, which stood at Rs 1,305.9 crore. 

Based on Think & Learn’s standalone earnings, the company closed FY19 with a net profit of Rs 20 crore. Operating revenues, on a standalone basis, stood at Rs 1,281.1 crore against Rs 460.9 crore in FY18.

Tiger Global

Since making a return to the Indian startup market after a nearly three-year hiatus, Tiger Global has become an aggressive investor once again under Shleifer, who succeeded the company’s India rainmaker Lee Fixel. The pace of deal making has quickened while its portfolio has diversified since then.

In an effort to amplify its India exposure post its Flipkart exit, the firm has shed its consumer internet focus to take bets on India’s burgeoning B2B (business-to-business) market. It is investing across stages and industries, writing relatively smaller cheques to mass-market businesses that show early signs of maturity.

Tiger Global has done a total of 29 deals this year in a mix of new and follow-on investments, compared to eight investments in 2018 when the firm resumed investing in startups in India.

Its notable B2B bets last year include agri-marketing platform NinjaCart, industrial goods marketplace Moglix, and SaaS firm Zenoti while it also made several B2C (business-to-consumer) investments such as in ride-hailing unicorn Ola’s electric mobility project Ola Electric, QSR (quick service restaurant) chain Wow! Momo Foods and online grocery startup Grofers.