Having a strong presence in India is a big advantage and we can build it further with our combined strength.
Byju’s, India’s most valuable startup, has acquired Singapore-based Great Learning, which offers professional upskilling and higher education courses, for $600 million in a cash, stock and earnout deal. The acquisition marks its push into the professional upskilling and life-long learning space in India and globally with a total commitment of $1 billion as it expands its offerings beyond the K-12 and test prep segments. The Bengaluru-based edtech unicorn has earmarked another $400 million for this segment.
The acquisition comes just a week after Byju’s shelled out $500 million to buy US-based Epic, an online reading platform for children. The acquisitions are funded from its recent $1.5 billion fundraise from UBS Group, Abu Dhabi sovereign fund ADQ and Blackstone Group LP, among others, at a valuation of $16.5 billion. In April, it also signed one of the largest acquisition deals in the edtech space, acquiring Aakash Educational Services Ltd for $950 million. In an interview, Byju Raveendran, founder and CEO, spoke about Byju’s’ acquisition strategy, growth outlook and focus areas. Edited excerpts:
Why did you decide to enter the upskilling, higher education segment?
This is a sector which will see positive disruption in the coming years. Higher education is slowly and surely moving online, at a fraction of the cost, and the opportunity is huge. After meeting Mohan (Great Learning founder and CEO Mohan Lakhamraju), we understood they have built something special and (it) has grown fast in recent years. This was a good fit like our last few integrations (acquisitions) and was strongly aligned to our mission, which is to help students learn. Professional upskilling and higher education were growing even pre-pandemic but there is a new mindset now. Individuals are learning and working from home. What would have taken a lot many years has been accelerated due to the pandemic.
How will Byju’s scale up in this new segment?
When we make an investment of this size and enter a new segment, it is not as an experiment. We always take a long-term view on what we can do with it. You will see us making huge investments in this space to accelerate its growth. We have committed $1 billion to this segment, and besides this transaction, will invest another $400 million in the near term.
Great Learning’s user base has grown 15 times in the past 16 months. How will you accelerate it?
In India, we will go deeper into smaller cities and towns. Having a strong presence in India is a big advantage and we can build it further with our combined strength. Then there are overseas markets such as North America and other English-speaking regions. We are still figuring out Latin America and the market response there has been strong. Byju’s strategy will be to invest in getting lot more courses on the platform.
What’s the growth outlook for 2021?
We expect significant organic growth in our core business of school learning. We now have three main segments to focus on—K-12, test prep and higher education. We expect all three verticals to show strong growth. Acquisitions are simple, but with the kind of integration we are forging with partners (acquired companies ), we are adding management bandwidth and increasing founder mentality. All acquisitions are complementary and in line with Byju’s long-term approach. There will be continued growth in India, but in 3-4 years; we expect the revenue split to be 60-40% between Indian and global markets.
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