Byju's poised to become India's most valuable start-up

Byju’s, India’s third largest unicorn, is all set to raise about $150 million from multinational Swiss bank, UBS Group AG, which will scale up the ed-tech pioneer’s valuation to about $16.5 billion making it the country’s most valuable start-up.

Quoting sources familiar with the deal, a Bloomberg report said that an entity belonging to UBS Asset Management will invest additional money into this 10-year-old Bengaluru-based online learning start-up.

This additional investment will take UBS’s total investment in Byju’s to about $300 million, the sources, who refused to be identified, added the report. Besides this investment, there is a possibility that another backer too will pump money into Byju’s to take the fresh funding to $400 million.

Also read: In post COVID-19 world, big money would rain on online businesses

Earlier this month, the company’s latest round of funding was an amount of $1 billion from Facebook Inc. co-founder Eduardo Saverin’s B Capital Group, and Baron Funds and XN as well.

This UBS investment will hike up Byju’s valuation and edge out Paytm, last valued at $16 billion from the top slot as the country’s most valuable start-up. In an interview to indbiz, a website of the Ministry of External Affairs, Economic Diplomacy division, Byju’s founder and CEO, Byju Raveendran had said, that he had no strategy in place to approach investors.

As a brand, they were focussed on solving core problems like the “access to quality teachers across geographies using technology”, he said. From the time, they had early investors Mark Zuckerberg and Dr Priscilla Chan backing them, he said that what attracts all their investors was the fact that they had a solid business model and addressed “key issues in the education sector”.

Also read: TikTok may sell stake to US investors; move to help uphold market for Reliance in India

Investors are excited with the ed-tech sector, he said, adding that they recognise the need and demand for such services and also because it is a “very scalable and profitable business”. India is currently the second largest market for e-learning after the United States, he pointed out.

Officially called Think & Learn, Byju’s has picked up an impressive line-up of investors, which included private equity giants Silver Lake Management, Owl Ventures and T. Rowe Price, Naspers and Tiger Global Management.

However, this news about the fresh investments into Byju’s was not confirmed either by UBS Management nor by Byju’s, stated Bloomberg.

Byju’s has also been on an acquisition spree, when it bought Mumbai-based code-training app White Hat Jr for $300 million in August last year.  It marked its entry into the fast-growing computer code training segment targeted at high school and college students. It was Byju’s fifth acquisition.

Prior to White HatJr, the ed-tech platform had bought an American company, Osmo, which as involved in creating educational games, for $120 million in January, 2019. Most recently, it bought a 33-year-old brick and mortar coaching centre Aakash Educational Services for nearly $940 million in a cash and stock deal. This centre focussed on preparing students for the entrance exams to competitive engineering and medical schools.

The pandemic has boosted online learning platforms and Byju’s has used this opportunity to expand quickly moving into global markets. They rechristened the coding lessons unit as Byju’s Future School and this learning is available along with math lessons in the US, UK, Australia, and is offered in Spanish as well in Mexico, and in Portuguese in Brazil.

Also read: Not all’s blue for firms, some tech companies do robust business amid lockdown

Byju Raveendran’s parents were math and physics teachers from Kerala. He had entered the field of education in an ad-hoc manner, starting out teaching math to friends and whoever was keen to learn the subject. This entrepreneur then went on to teach students how to successfully crack competitive exams like CAT, which then set him off on the road to launching his own start-up.

Recently, Raveendran had said that the pandemic had transformed the thinking of parents, teachers and students towards online learning. It had become more acceptable to them. Bjyu’s K-12 app, which is the money-spinner, has over 80 million registered users in India who learn the basics of math and science with the help of animated games and videos. Byju’s shortly has drawn up plan to offer a wider variety of subjects such as music, English and the creative arts.