Byju’s is already India’s best-funded edtech #startup by far. Last year in March, it had a funding round of US$75 million from Sequoia Capital and Sofina, which was larger than the combined capital raised by the top 10 edtech startups in India until then. This was followed up with a US$50 million series D round a few months later from Sequoia and the personal fund of Facebook honcho Mark Zuckerberg’s wife, Priscilla Chan.
Today Byju’s announced an undisclosed amount of investment from China’s Tencent, which has been increasingly active in India. It led the US$1.4 billion mega round in April to revive the fortunes of ecommerce leader Flipkart in its battle against Amazon. Other investments include health tech leader Practo.
The backing from Tencent strengthens the scope for Byju’s to scale up faster and consolidate its position at the top of the pile with acquisitions. It already has 450,000 paid subscribers for its app providing personalized learning to K-12 school students. Byju’s revenue more than doubled to US$40 million in FY 2016-17, and it claims to have turned profitable in the last quarter.
“This year we expect the revenue to double again and we will be profitable on a full year basis,” says Byju Raveendran, founder and CEO of the eponymously named startup, in a statement on the funding. “This round will help us leverage our expertise in creating tech-enabled programs to cater to the learning requirements in new markets.”
China shares similarities with India in the demand for access to learning resources, especially those oriented towards test preps. The main challenge for edtech startups in India has been monetization. Byju’s need to maintain positive unit economics while scaling up will gain from the experience of its new investor from China, which has gone through ups and downs in the edtech space.