With an IPO on the horizon, warchest of funds ready & a slew of smart acquisitions under its belt, Byju's is ready to teach to the world. Here's how.
Considered to be one of the trailblazers of India's exploding unicorn club (startups valued above 1 billion USD), Byju's has come a long way since 2015. A good way to understand that would be by looking through the lens of "Product Life Cycle". A simple look at the chart below will be enough to essentially understand what it is.
Source: The Street
WHERE BYJU'S STAND
If we consider the existing elements in Byju's business environment, we can ascertain that it's firmly in the "Growth Stage".
As per Statista, the Indian ed-tech market will grow at a frightening pace from $2.4 billion in 2020 to $10.8 in 2025, nearly a 4X jump in just 5 years! This shows that there is still immense scope for rapid growth.
There is strong competition in the sector. Other companies like Unacademy, UpGrad and Vedantu are giving Byju's a run for its money by targeting different segments & niches. However, Byju's is the clear leader at a strong market share of 65% (with the next best being a distant 30%)
Source: Statista
There is heavy onus on brand building & promotion which is a standard pattern in this phase.
DOING BUSINESS THE BYJU'S WAY
This section deals with analysing the business model of the startup. At the very basic level, Byju's is a classic freemium player. It offers limited content & then entices the user to pay up by subscriptions. The company's main focus has been the lucrative K-12 category, digitising thousands of tution classes & coaching centres since 2015. If we crunch the numbers, we see that the company has converted a respectable 6.54% of its monthly users (5.5 milion pay out of 80 million downloads) into paying subscribers. Despite the low conversion rate, the company is a rare profitable startup in a world flush with VC money & mind boggling future projections. The company earned a cool 100 million + of net profit in FY2021. Analysing it's acquisitions can shed further light on its long term ambitions.
LET THE GAMES BEGIN
One word best describes Byju's buying spree: Hawkish.
Since 2015 itself, the company has been very ambitious in acquiring competitors left & right.And it has been quite strategic as well.
On the other hand, buys like Epic & Labin Apps are an ode to the future, building capabilities in 3D animation & Machine Learning. They have also entered the upskilling segment through Great Learning and White Hat Jr, adding digital marketing, AI, coding & cloud computing to their forte.
Perhaps no other space in the Indian startup ecosystem has seen a consolidation at such an aggressive pace, adding weight to Byju's future prospects.
YOUR MIND IS THE LIMIT
Byju's can teach anything & everything, not just to India but also to the rest of the world. The sky (and your mind) is the limit for this ed-tech juggernaut.
The company will do better by ramping up its presence in more affluent markets like USA, UAE & Western Europe. Along with SaaS, ed-tech can be the next BPOesque sector for India, creating jobs & foreign exchange aplenty.
The company should double down on niches like Pre-school & up skilling to cement it's dominance.
Creating sub brands (like in the FMCG sector or BBK electronics) can provide consumers with an illusion of choice (thus removing the malignant "big business" tag) which can drive users away.
The company can also start a "Byju's Gold" membership programme which provides personalized one to one tutoring, targeting the top of the pyramid.
With an IPO on the horizon, Byju's looks set to get a fresh injection of funds. If the past is anything to go by, this will be start of a more global brand.
On that note, I sign off. Feel free to check out other case studies below in related posts.
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