Flush with funds from Chinese investment major Tencent, and Facebook’s Mark Zuckerberg, among others, India’s largest education technology company Byju’s recently entered the unicorn club, crossing the USD 1 billion valuation mark. Byju Raveendran, the founder of Byju’s, who started out in a government school in a village in South India’s Kerala, has come a long way since 2011. With the help of technology, Byju’s is revolutionizing the way students learn through its app. In an exclusive interview with The Passage founder Hu Jianlong, Raveendran speaks about the journey so far and the way forward.
(Byju's Team of 200 Has Grown to 2,500 in the Past Two Years)
The Passage: Could you introduce Byju’s to our readers?
Byju Raveendran: Byju’s learning app is a self-learning platform for K12 student. It is the largest edu-tech company in India, probably one of the biggest learning app for schoolkids anywhere in the world. The product helps students become active learners. Good teachers are hard to find, personalization is minimal because of the sub-optimal teacher-student ratio. Most importantly, the current format is learning-driven. The pressure on students steals the love for learning. All these challenges can be solved to scale only by using technology as an enabler. What we have been able to do is create content which is relevant, simplified, presented in a format students like, offered through devices that are friendly and through a technology platform (app) which is personalized to each and every student's learning need.
The Passage: Why did Byju's shift the focus from CAT preparations top K12?
Byju Raveendran: We have not moved out of CAT preparation but we have added school segment as our focus areas. We made two important shifts—one from test prep to core learning, second from offline to online. It took us four years to build content in this format, which students like.
Some of the largest sessions we used to do were in the offline format inside stadiums with 20,000 to 22,000 students attending together. And then after spending a lot of time with the students, we felt there was a lot of scope for improvement. In 2011 we started building content and by the end of 2014 we realized apps were an easier medium to reach out since smartphone penetration was growing fast. We have got 85% annual renewal on our subscription. That’s a clear indication that it’s effective.
Most of the places we have not scaled the offline model. In fact we have phased out the model of offline. Less than 3% of our revenue is coming from the hybrid format. All together we have 10 centres now, including 6-7 centres in Bangalore.
The Passage: What’s the barrier that hampers Byju’s growth?
Byju Raveendran: We have adopted a strategy of product-led approach. Scaling up in the offline will take a lot more time. That’s actually the big challenge without compromising on quality.
The Passage: Many parents are concerned that kids would play games and not focus on Byju’s app?
Byju Raveendran: Parents are not used to kids learning on their own without any pressure or force. We are creating that awareness by using premium model. One reason why we are able to gain traction is because we have made this format the way the students like. They have the flexibility to learn whenever they want, wherever they want.
From an India perspective, slowly, but surely, this model is going to work. Students, anyway, spend a lot of time in front of a book. So that time is what we are replacing. In some cases we are replacing tuition. It’s not that we are replacing school. It’s complementary to what’s happening inside the school. When parents see that their kids are learning from the same device they use for playing games or watching movies, they are happy to pay for it. We have been able to charge USD 150-160 per student from the time of the launch.
The Passage: How did your parents react to this idea. Have you ever thought of becoming a teacher?
Byju Raveendran: Both my parents are teachers. I never thought of becoming a teacher, though I taught my friends and neighbours. I went to a non-English medium government school and I have been a self-learner throughout. I learnt English from sports commentaries, mathematics and science on my own.
Teaching is something which just happened. After engineering, I worked for the first three years abroad in a ship management firm. Teaching was something which started as a weekend hobby during a vacation. My first session was for 35 students who were my friends; their friends also used to attend.
When students started doubling week after week, we thought of charging for it, and it ended up becoming a business for us. In the initial years, I used to travel to nine different cities every week to teach. Like Saturday morning in Bangalore, evening in Chennai, Sunday morning in Mumbai, evening in Pune. I did that for three full years. I was doing it for three years in large auditoriums. It became so popular that I used to stand before a six-sided screen auditorium. Not just the stadium, even the area used to get filled. At that time we used to charge USD five to six per student. All this was before 2011.
The Passage: And how has been the journey so far?
Byju Raveendran: In 2011, I formed this company with eight of my brightest students who went to IIMs and India’s topmost institutions. About 75% of the core team consisted of my students and that’s become easier to align with the vision. Within a month of launching the app in 2014, we started monetising it. That helped us increase revenues. We are looking at anywhere between USD 180 to 200 million in revenue this financial year. In just the three years since launch.
The Passage: Wasn’t it very hard for you in the initial days considering you come from a government-school background?
Byju Raveendran: Coming from a government-school background has been a big advantage because that’s what makes you aspirational and extremely positive. The part of the social fabric you live in, the close-knit community kind of environment in the village, teaches you so many life skills. It makes you believe that all are equals and you learn how to trust people at first. That’s what business requires. The first instinct is to trust the person and then contacts will follow.
The Passage: How did you convince Mark Zuckerberg to invest in you?
Byju Raveendran: I can’t disclose too many details on how the investment happened, but I can say they are very excited about what we are doing. Both in terms of how we are using technology to personalize and, more importantly, how we are using this to make an impact not just in metros but even in smaller towns. Our partners believe in long-term sustainable business model, which will also make an impact.
The Passage: Why did you choose Tencent as an investor?
Byju Raveendran: It’s important to have a diverse set of investors who can potentially help you with their sector experience when we go international. So, if you ask me why Tencent, it's because they liked our business model. We have always got partners who were excited about education in India and how we are solving some of these core challenges.
The Passage: Whom do you admire most?
Byju Raveendran: I am very much interested in sports. There are many sports personalities I look up to in terms of how they have perfected their game, starting from Lionel Messi to Roger Federer. Not one role model, but many.
The Passage: What do you think of Chinese investment in India?
Byju Raveendran: There is a lot of similarity between India and China. In some sectors, they have seen the scale and the model, and if they are selecting partners based on that, there would have been synergy with two parties coming together.
The Passage: What do you think of the prospect of education sector in India?
Byju Raveendran: I think of education as a core segment where technology is just about to make intervention not just in India but all over the world. You will see some large education companies coming up in the next one or two decade, and I expect them to come from India and China or other emerging markets. The reason being that a large number of students and schools exist here. It’s important that companies solve education problems to scale. The real fun is not in creating a billion-dollar company but changing the way millions think.