Most edtech companies will grow faster than before because there is a large market opportunity across all segments and age groups
At a time students across the country continue to learn from home, top edtech firm Byju’s has doubled down on its business, raising large chunks of capital and buying code training platform WhiteHat Jr for $300 million. This is the fifth acquisition by Byju’s and the largest acquisition in India’s edtech space. In an interview, Byju Raveendran, CEO, Byju’s, spoke of how the deal will help the company’s planned entry into the code-skilling segment; merger and acquisition (M&A) plans; and a possible initial public offering (IPO). Edited excerpts:
How will Byju’s gain from the WhiteHat Jr acquisition?
Coding as a subject (for students) is an important future skill that goes hand-in-hand with mathematics and other subjects. The WhiteHat Jr course format is very different from our current course format and offers live one-on-one classes, and there is a huge opportunity to scale this product not just in India, but in foreign markets as well. As part of our international expansion plans, we will be able to scale our offerings to new countries with the acquisition. In India, coding skills are currently not part of the larger curriculum in schools, but this is expected to change soon.
Why do you think children need to learn coding skills early on?
Even though students might not take up coding as a career option, it eventually helps them become active learners. Most of the changes in our traditional school curriculum in the last few decades were focused on passive learning methods, but we believe that the future of learning must be based on active leaning methods. Coding is a subject and a skill that fits well into the active learning methodology, and young kids are always curious in their early schooling days; and somewhere down the line, because of exam or performance fears, they (children) lose curiosity.
Will Byju’s allocate a large part of the capital recently raised for M&As?
We have always had access to capital through our operational years. And when we come across companies or a management team like WhiteHat Jr, we try to build a conviction around the complementary nature and the scalability of the two coming together. We have been very watchful about our approach (on M&As). If a potential (acquisition or merger) fits into our strategy of building a product focused on the same age groups, brand vision, and demographics, then we will surely examine it. So, in the future, we will also look at companies that fit into our long-term vision of helping students get access to different learning formats of online learning.
With the edtech sector gaining momentum, do you see further consolidation going forward?
Most edtech companies will grow faster than before because there is a large market opportunity across all segments and age groups. There is also an opportunity to help teachers teach better. I believe that these are very early days of bringing technology to educators in India to improve teaching methods. Online penetration of the test preparation market is also accelerating, and offline edtech players may also move online this year. There are not many large edtech companies in India yet and, since the acceptance of online learning is better than before in the country, there is still room for growth in certain edtech segments.
Are you looking at an IPO anytime soon?
Our business has reached a stage where we have an option to do an IPO sooner, but the exact timeline—that is not yet decided. It’s obviously an aspiration for us to create a large public company. We don’t need to do that just to give exit to early investors since we are a profitable business model that is generating net cash flow. Since most of the early investors have already taken their money out, the rest of the early investors are thinking long-term, which is very important because that’s when we can create companies that can be relevant and serve use cases even after a decade or so.
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