It is a Sunday morning late in November, and thousands of school children have assembled at an indoor stadium in central Bengaluru. They are here to take part in an aptitude challenge conducted by a company that goes by the name ‘Byju’s’. The atmosphere at the stadium is part rock-concert, part evangelical sermon. There’s a huge platform — 40 to 50 feet high — at the centre of the stadium, with four large screens displaying the scribbles made by the presenter on his electronic pad to every last person in the audience.
Byju’s, India’s hottest education company, takes its origin myth seriously. To this end, the presenter builds up the personality of Byju Raveendran, the founder of the eponymously named company, in front of an attentive audience of students and parents, rapidly listing Byju’s early academic life and achievements. Byju topped the national Maths Olympiad, he chose the science stream after Class X, studied engineering, went on to work for a UK-based shipping company, and so on.
As he scribbles on the tablet in front of him, the presenter recounts how Byju, egged on by his friends, wrote the CAT exam — “an exam which people today say is not only the toughest aptitude exam in India, but the toughest aptitude exam in the world.”
Indeed, CAT, short for the Common Admission Test that students seeking admission to India’s top management schools have to ace, is one tough exam. Over 200,000 students took the test in 2015 and less than 2% were admitted to a premium B-school. In India’s hyper-competitive school and college system, a prestigious B-school degree — along with medicine, law and, top-notch engineering degrees — is seen as a passport to a good life. Parents often push their children to prepare for the three-hour CAT as early as high school.
The story goes that Byju took the test at the insistence of his friends in 2003 and scored a 100 percentile, receiving calls from all six IIMs. Again, pushed by friends, he attended the interviews and converted all of them into joining offers, but turned them down, choosing to go abroad to work. All this has now become part of the Byju mythology.
The story goes that Byju took the test at the insistence of his friends in 2003 and scored a 100 percentile, receiving calls from all six IIMs in 2003.
That’s not all, the presenter says. Byju repeated the same feat in 2005, making him the only person (according to the presenter) to receive offers from all six IIMs twice and rejecting them twice. All this may come across as a bit vain, until you realise that it works well for the company’s messaging, which is built around Byju’s uncanny ability to ace exams and train thousands of students to do the same. (FactorDaily couldn’t independently confirm Byju’s CAT results.)
Finally, Byju Raveendran, the founder of Think & Learn Pvt. Ltd, the company that owns Byju’s, emerges on stage. In his 45-minute talk, he outlines his pedagogical strategies. The essence of the talk is about speed, a key skill required in most of India’s competitive tests. The heart of Byju’s strategy to problem solving — and these are largely math problems — is to convert them from one ‘language’ to another ‘language’. There are four such ‘languages’: Words, Variables, Numbers, and Diagrams. He illustrates this strategy by sketching out the solution on his pad to a particularly tricky math problem.
“When you are on stage, it’s a performance,” Byju tells me later.
“When you are on stage, it’s a performance,” he tells me later. Byju, who grew up in a tiny village in Kerala, isn’t just good at wowing students with his math skills (incidentally, he even wooed his wife with his math skills). He has raised over $174 million (nearly Rs 1,200 crore) in four rounds of funding from top investors including the World Bank’s International Finance Corporation (IFC), Sequoia Capital, and the Chan Zuckerberg Initiative. That makes Think & Learn the most funded ed:tech startup in the country.
So what is it about Byju’s that attracts some of the world’s most discerning investors? Is Byju’s the next startup unicorn — a company valued over $1 billion? How is Byju’s a disruptor in a market which has been dominated by offline players for decades?
So what is it about Byju’s that attracts some of the world’s most discerning investors? Is Byju’s the next startup unicorn, a company valued over $1 billion?
It’s both the man and the market. Byju, 36, with his larger-than-life personality and a long list of achievements, inspires confidence. India’s education system, the largest in the world with over 260 million students in the K-12 segment (kindergarten to Class XII) alone, is ready for learning on the mobile phone or computer. Parents who see education as a ticket to prosperity are not reluctant to open up their purse strings, presenting ed:tech companies such as Byju’s with a market worth a few billion dollars. It stands to reason, then, that venture capitalists are pouring in millions of dollars into test prep and tuition startups.
The Making of Byju
The first-ever class that Byju took had 40 people. It was conducted in a classroom at Jyoti Nivas College in a southeast Bengaluru suburb in the mid-2000s. The second class had 1,200. Soon, students started filling up the auditorium, which could seat hundreds. Word spread about a young teacher with an unconventional teaching style and the power to motivate exam-takers. He travelled incessantly across the country and abroad, taking intense courses for thousands of students. In 2007, he finally started the company (it was incorporated as Think & Learn Pvt Ltd much later, in 2011).
Despite his phenomenal success, Byju’s attitude towards life is matter-of-fact. “I grew up in such a way that I can go to a bus stand and take a bus anytime. It comes from my upbringing,” he tells me when I meet him at his home in Bengaluru’s HSR Layout. After my first meeting with him in October, I am there to meet his parents — his father, Raveendran Kunnaruvath, a retired physics teacher, and mother Shobhanavalli, a retired maths teacher. Both of them taught at the Malayalam medium Azhikode High School in north Kerala, where Byju studied till class 8. He shifted to S N College, Kannur for his pre-university course before heading to Government College of Engineering, Kannur.
Word spread about a young teacher with an unconventional teaching style and the power to motivate exam-takers. He travelled incessantly across the country and abroad, taking intense courses for thousands of students.
Byju’s parents don’t take credit for his academic brilliance. They would avoid taking classes for the sections that their children were enrolled in. Raveendran, now 69, retired in 2001 and Shobhanavalli, 62, retired early in 2009. They have been living with Byju and their younger son Riju in Bengaluru after retirement. Over generous helpings of Calicut halwa and moderately sweet tea, they told me of their modest roots. Raveendran’s father was a weaver and Shobhanavalli’s father was a practitioner of ayurveda. Their mothers looked after the children and helped run joint family homes where education was valued.
Byju is proud of his background. In fact, he considers it his strength. He’s also proud of the close-knit social structure that’s predominant in Indian villages. “If you grow up in a protected environment you can’t handle pressure,” he says.
Shobhanavalli says that Byju used to scribble cricket scores and names of all playing countries in a diary, which she has kept safely — the English was all wrong but he’d still write in the language. He learned English by listening to cricket commentary on the radio, and was good at math right from his childhood. “I used to count everything that could be counted. Like the number of electricity poles between two train stations,” Byju tells me. He’d then use the data to estimate the speed of the train (two poles are usually at a distance of 50 metres) based on the time taken.
He learned English by listening to cricket commentary on the radio.
He was also good at games, cricket being his favourite, along with badminton and table tennis. Sports is where he derives his strength and stamina from, he says.
Coaching students for competitive exams can be draining. In the early days of coaching, Byju used to take classes for 12 hours on a trot — from 8am to 8 pm; one batch after the other. The routine was the same city after city even if it meant sleeping on the bus to the next city. The days of overnight bus journeys and gruelling classes are behind him now. But his life continues to be a whirlwind. On weekends, he still takes workshops for students in large stadiums in India and abroad, mainly Middle-Eastern countries.
The days of overnight bus journeys and gruelling classes are behind him now. But his life continues to be a whirlwind.
Even though he doesn’t sweat the small stuff, like which flight to take or how to travel to a city where he’s conducting a class, Byju is very organised in other ways. He tackles the top five things on this priority list every day. “People struggle when they don’t manage their time well. They’ll think they are at work, and they’ll think they are at office, but they’re nowhere,” he says. Time is precious for him. If there are 10,000 students waiting for a class, being late by a minute means “losing 10,000 minutes”. In all, Byju, who is 36, reckons he has taught four to five lakh students including more than 25 batches of 20,000 students each at auditoriums and stadiums, since starting out in 2007. Typically, a school teacher, Byju’s father for instance, would have taught about 10,000 students in a career spanning 25 years.
Byju’s three-year-old son Nish troops in for a bit as I sit chatting with his family. Divya Gokulnath, his wife and co-founder of the company, is trying to get him ready for creche. Divya, a biotech graduate from RV College in Bengaluru, was preparing for postgraduate courses in 2007 when she met Byju during one of his classes, and the two fell in love. “Then I stopped being an exam taker, ” she jokes. She had secured seats at top universities in the US but decided to stay back.
“He convinced me to stay back. I joined Byju’s straight from college and have been with him ever since,” she says. At the company, Divya, 29 today, takes classes (she appears in many of Byju’s online classes) and also oversees communications and marketing.
It helps that Byju’s parents are around but the duo tries to spend time with Nish. “You need to cut a few hours from your sleep,” says Divya — both she and Byju get by with about four hours of sleep a day. Byju says he only wants one thing of Nish: that he remains childlike curious when he grows up. “Somewhere along the line, adults miss out on the curiosity,” he says of adults. And the couple doesn’t believe in helicopter parenting. “You learn things when you do things on your own. Not when you are spoon-fed,” he says. Byju’s younger brother Riju, 35, who lives in the same house, and Divya is also a director at Think & Learn, which was incorporated only in 2011. Byju chairs the company.
The funds gusher
The company’s fund-raising has mostly been serendipitous. Byju says he never went running after funds but always spent time explaining his vision to anyone who cared to listen.
In September 2016, Mark Zuckerberg announced his investment in Byju’s through a Facebook post. “I’m optimistic about personalised learning and the difference it can make for students everywhere. That’s why it’s a major focus of our education efforts, and why we’re looking forward to working with companies like BYJU’s to get these tools into the hands of more students and teachers around the world,” Zuckerberg wrote.
This was unprecedented. Zuckerberg, Facebook co-founder and listed among the world’s 10 richest people, hadn’t invested in a company in India directly till then.
It was Satyan Gajwani, Vice Chairman of Times Internet Ltd, who introduced Zuckerberg to Byju, according to a top executive who requested anonymity. This was around the time Gajwani had started splitting his time between San Francisco and Delhi. He was going to invest in Byju’s and had “dropped a message to Mark,” and this catalysed the deal, the source said.
Later, I asked Gajwani about the episode. “We went out for a stroll and it turned out to be a two-hour walk,” he recalls about his meeting with Byju back in December 2015. “This was never really a financial interest. It’s a great thing for the world and India to bring high quality education.” He didn’t confirm that he made the Zuckerberg introduction. Times Internet, Sequoia Capital, Sofina and Lightspeed Ventures were co-investors in the $50 million round announced in September 2016. Six months before this, Byju’s had raised $75 million from Sequoia and Sofina.
Soon after the investment from the Chan Zuckerberg Initiative, or CZI (the philanthropy vehicle run by Zuckerberg and his wife Priscilla Chan), the company raised $15 million from IFC, the World Bank’s private investment arm. “It was not just for the money. It got us a good partner,” says Byju. While CZI is a new age tech investor, IFC is an old world institution with decades of operations around the world behind it.
G V Ravishankar and other partners at Sequoia India met Byju in a small meeting room at their Mumbai office before the investment. They were expecting “someone more academic looking”. “So I was a bit taken aback to come across a young man dressed quite casually,” Ravishankar, who led the Byju’s investment, says (Byju usually dresses in a tight black t-shirt with blue jeans). “They had figured out a delivery model that was highly effective and scalable at the same time,” adds Ravishankar.
Pedagogy on tap
The delivery model, mostly tech-enabled, is what makes Byju’s different from other coaching classes in the country. The offline coaching industry is fragmented with hundreds of players in the market. Few of them have some scale — Resonance, Bansals, Time, Brilliant Tutorials, for instance — in some cities. “This sector has not suddenly sprung up but I’ve not come across anyone as strong as Byju’s,” says Vardhan Koshal, former country manager of Udacity in India. Udacity is a Mountain View, California, California-based online education company.
The offline coaching industry is fragmented with hundreds of players in the market.
But offline coaching classes are mostly restricted to a city or region because most of them don’t use technology to scale beyond their local areas. Byju’s uses tablets, memory cards and internet streaming to reach students across the country. Having high quality teachers across even 100 towns is nearly impossible.
In the business of coaching classes, most players are looking to rope in students as young as possible. That explains the Maths Olympiads and aptitude tests for school children in stadiums across the world. “Chan Zuckerberg Initiative and others invested in us because of the way we use technology and not because of the revenues we made,” says Byju. The company’s learning app, made by an in-house team, has a colourful interface and slick design. It almost feels like a video game, which makes it attractive to students. In fact, Byju is bringing even more gaming-type features to the app.
When you open it, you’re asked to select a test or class you’d like to be coached for, and then register with your name, email address and phone number. Say you select the UPSC test, a highly competitive exam through which the Indian government selects bureaucrats. You are first shown a bunch of free stuff, including videos on various topics, and asked to take the free tests. At the end of these tests, you can analyse your score and schedule an appointment with a mentor if you’d like more personal attention. Then there are paid subscriptions — an online personal teacher, a series of practice sessions, and a test preparation module starting at Rs 10,000 going all the way up to Rs 45,000. The Byju’s app offers classes for students starting from the 4th grade to 12th and separate modules for competitive exams like IITJEE, CAT, IAS, GRE, GMAT, Bank PO tests, and campus recruitment tests. Math for classes 4 and 5 are taught through another gamified app.
The company’s learning app, made by an in-house team, has a colourful interface and slick design. It almost feels like a video game
For classes 6-9, users can subscribe to 45-minute online personal training session for about Rs 999. Learning material for an academic year costs Rs 10,000. For class 10 students, the company starts pitching Joint Entrance Examination (JEE) tests for admission into IITs, National Eligibility/Entrance Tests for graduate medical courses for Rs 19,999, and personal training modules for Rs 1,499 for 45-minute sessions. The total package could go up to Rs 40,000 (Physics, Chemistry, Maths, Biology/Joint Entrance Examination and All India Pre Medical Test) with two years’ validity. You can also get the content loaded onto SD cards for offline viewing. For Rs 30,000 you could buy CAT classes preloaded onto a Samsung tablet.
To some people, all this might seem a bit expensive. For instance, a customer who has reviewed Byju’s learning app on the Google Play Store, says: “It’s a good app…. I thinks it’s helpful…..but it’s kind of expensive.” Another student, Anu Verghese, told me that the study material was good but she didn’t find the mentorship service very responsive. Verghese bought the CAT course at a discount (Rs 16,500) and got a Lenovo tablet and 14 textbooks. “Since I was also working, I couldn’t use the app much,” says the 23-year old engineering graduate who scored 97% in the CAT exam last December.
It has been only 16 months since the app was launched. But it is popular — it has over 7.5 million downloads and 3.5 lakh students paying annual subscriptions. Byju tells me that the app clocks nearly half a million downloads every month, of which nearly 30,000 users take up annual subscriptions.
The Byju’s app has over 7.5 million downloads and 3.5 lakh students paying annual subscriptions.
The product approach allows Byju’s to scale beyond the metros and to the hinterland. And the potential is huge. The total number of K12 students in India is higher than the corresponding number in China and the United States. “We’re just about skimming the surface today,” says Byju. According to RedSeer Consulting, the country’s online supplemental education market is valued close to $2.5 billion right now, and is likely to grow at 15% year on year. Another estimate pegs the market to be worth over $40 billion by 2020.
In many ways, it is a perfect storm of sorts for newer companies to take over the business of education. The power of data, personalisation, and new distribution channels is something Silicon Valley savants like Zuckerberg and mandarins of the venture capital world understand well. India has now over 300 million smartphone users and is expected to have over 700 million Internet users by 2020. The aspirants to India’s middle class will go hungry but make sure that their children get ‘proper’ education.
The Byju learning experience is personalised, depending on the amount of time a student spends on an app. The app identifies learning patterns and takes students through a predefined path. “Some students have lower attention span. Some learn for 15 minutes at a stretch, some for five minutes. The modules are adjusted accordingly,” says Byju.
The app has the largest user base among competitors and engages students for nearly 40 minutes during each session. That generates more data for them to study and create what is called ‘adaptive’ learning. “There’s so much to do. More data will ensure we become more and more personalised,” Byju says of the future.
‘I’m doing this for fun’
Friday, 16 December 2016. 12.20 AM: It’s about 18 degrees C in Bengaluru, and a cool breeze is sweeping across the ground. Byju is the first one from the team at Play Arena, a gaming complex off Sarjapur Road in Bengaluru. He’s warming up for a football match and a couple of others have joined in. A few more employees, mostly in their 20s, trickle into the ground. By the looks of it, they’ve just finished work. Byju stops to chat with us briefly (my colleague Rajesh Subramanian is with me to take pictures). For about five minutes, we talk about the media, the Malayalee’s love for football, and the crazy routine at Byju’s.
It’s time for the game to start. Byju is playing centre in the six-a-side game. The gameplay is fast and spirited, passes are mostly accurate — signs of a team that plays often. I couldn’t help but notice that Byju is a bit slower than the other players but his right kick is formidable. The game goes on and Byju is playing as hard as he started off.
I couldn’t help but notice that Byju is a bit slower than the other players but his right kick is formidable.
Two hours later, the watchman signals that it’s time to shut the place down. Byju’s team has won both games. We get him to pose for some pictures with the team. As if he’d read my mind, Byju tells me that he’s been a bit slow after many sports injuries. He’s had to replace a joint. “And also all of them are half my age,” he jokes. His investors have warned him not to play football. But what the heck, Byju can’t not play. Last year, after one such injury to his leg, he was laid up in bed. But instead of gaining weight, he worked out harder and lost three kgs. “Math and sports are what drives me,” he tells me, reluctantly revealing his weight: 82 kg. He is 180 cm tall.
A big question management gurus like to ask is: will this company, built around the founder’s persona, last a 100 years? In the world of venture capital, this isn’t a question that comes up often. For most venture capitalists, an exit, through a public listing or acquisition, is a great outcome. Byju, however, thinks that it’s a longer game.
“That individual risk isn’t so high now because we’re moving to a product,” says Byju. “I’ve created teachers who are as good as me or even better. Nowadays I don’t take classes.” The videos and content modules that the company has put together have, in theory, an infinite shelf life. What also works in favour of Byju is that most of his employees are students he has taught. “They get what I’ve taught over the years and are able to carry it forward,” he says.
If anyone can crack this market wide open, without doubt Byju has the best chance at it. “I’m doing this for fun. Numbers will come when you do things for fun,” he says. The company was valued at Rs 2,500 crore (~$370 million) when it raised its series C funding in March, Forbes reported. Its current valuation is estimated to be north of $500 million but Byju wouldn’t comment on it.
In the last year, Byju’s has scaled from 300 employees to 1,000 people. In the next six months, its founder wants to expand his team to 2,000 people, grow revenue three times, and break even by the end of March 2017. According to company filings, Byju’s earned revenues of Rs 108 crore in the financial year ending March 31, 2016, as compared to Rs 44.5 cr in the previous year. It lost Rs 49 crore and Rs 34.7 crore respectively in the corresponding years.
In the next six months, its founder wants to expand his team to 2,000 people, grow revenue three times, and break even by the end of March 2017.
Byju’s is not exactly looking to do everything in-house. Earlier this month, the company bought Vidyartha, a startup based in Bengaluru for close to Rs 50 crore, The Times of India reported. It is Byju’s first acquisition. The startup, founded by two entrepreneurs Priya Mohan and Navin Balan, has a testing and assessment platform with over 200,000 student profiles and ratings of over 3,000 schools. That’s a neat set of potential customers to go after. The deal value isn’t accurate, Byju points out, as he adds that the plan is to not aggressively chase acquisitions but at the same time not miss out on opportunities.
Other startups, however, are also targeting this market. For instance, Cuemath, a company which trains students in math, recently raised $15 million from Google’s investment arm CapitalG. Sequoia Capital is an investor in Cuemath as well.
Are better exam-takers what we need in India?
Byju’s learning methods are different and he manages to bring this to his customers. But at the end of the day, is he only helping to create better exam-takers; students who are better at beating the system? And are exams and degrees enough to equip the future generation to deal with a new world, where artificial intelligence, automation and cyber-physical systems pose a threat to jobs? Test prep and tuition startups, including Byju’s, don’t attempt to address these larger questions right now.
But at the end of the day, is he only helping to create better exam-takers; students who are better at beating the system?
“I expect Byju’s to do well from a market perspective. Currently they are helping people take exams better. I would love to see how that translates into any evidence of actual productivity increasing,” says Mekin Maheshwari, who was an early team member at Flipkart and has hired hundreds of engineers. “Our current system slots students. It’s like everyone is dosed with Crocin regardless of what disease they might have.”
Maheshwari says “meaningful personalisation” and the ability to play to people’s strengths are the next steps for Byju’s or any ed:tech startup. But he is sceptical of education startups like Byju’s bringing any fundamental changes to the way our children learn, or how they are equipped to make a difference in a world with changing demands and furious globalisation. “Unlike how the IITs led to a certain kind of technology talent getting created, I don’t think any of that is going to happen with this generation of ed:tech startups,” he adds. The creation of IITs, as premier technical institutions at par with global institutions, has lead to creation of a large number of jobs.
But Maheshwari is sceptical of education startups like Byju’s bringing any fundamental changes to the way our children learn, or how they are equipped to make a difference in a world with changing demands and furious globalisation.
Byju, however, says that he wants to make “children fall in love with learning” — hence the focus on early classes.
Back at the Kanteerava Indoor Stadium, where Byju is working up the crowd of children and parents, the talk continues beyond its scheduled 45 minutes and parents get restless. Their wards are late for their usual Sunday routines of tuitions and coaching classes — all to prime their kids for competitive tests.
Byju is forced to cut short his talk but has a confident smile. He knows that many among the thousands present are going to come back to his app to learn at their pace. Even better, he know he has customer stickiness: nine out of ten students who enrol for a paid Byju’s session or on the app come back and buy the following year’s study material. He has every reason to grin.
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Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem. Update: The story was edited on Feb 6, 2017 (11.15 am IST) and Feb 7, 2017 (10.50 am IST) for some grammar and typo errors. Update: This story was edited on Feb 6, 2017 (4.30 pm IST) to replace Byju's Classes with Byju's, which is how the brand is known now.