Braced for the next wave of edtech? It will be big. As in global, corporate big. Combine that with some of the dislocations triggered by COVID and students could be in for some radical changes in the tools that help them learn.
The most recent player to step into the edtech spotlight is India’s Byju’s. The privately held company, which has raised $2.7 billion from investors and is currently valued at more than $16.5 billion, is growing literally week-to-week: Since June, it has announced new products for early learners in the U.S. using characters from Disney and it has plunked down (in cash and stock) more than $1.25 billion to buy three education businesses (both in the U.S. and India) that serve students from under the age 12 to adults in the workplace.
It’s not done yet. Cofounder Divya Gokulnath says that Byju’s had earmarked $1 billion for acquisitions in the U.S. alone; that means the company has at least another half billion dollars at the ready. It also plans to keep building products itself. Byju’s ambition: build “the biggest learning brand in the U.S.”
“Byju’s growth demonstrates how the edtech market is truly becoming borderless,” says Isabelle Hau, a longtime global impact education funder who is working on a book on early childhood learning. “We used to think about edtech globalization in one way—from the U.S. to the rest of the world,” she adds. “We are now seeing truly global expansion strategies spotlighting on edtech.”
Few companies have tackled the full range of learners since the days when Pearson was touted as the world’s largest learning company. Those that do, however, are increasingly huge (like PowerSchool, which had an IPO this week) and work across international borders.
Among them: Chinese education giants, including TAL and New Oriental. The meteoric rise of Chinese edtech companies has dimmed recently as the Chinese government shifted regulations around online tutoring, in an effort to “protect students’ right to rest, improve the quality of school education and reduce the burden on parents.” That move is predicted to prohibit Chinese education firms teaching core subjects to students from kindergarten through 9th grade from making a profit, going public, raising capital or offering tutoring services during weekends and holidays. In response, the stock values of those companies have plunged by dizzying percentages in the past few weeks. Even so, observers are not yet ready to count out the Chinese companies. They say it’s too early to predict how Chinese companies will pivot to adjust to the new dictates. But moving more energetically into non-Chinese markets may be one path.
By contrast, India’s Byju’s is on roll, raising $850 million from investors (in the U.S. and internationally) just since January 2021. That cash, combined with what observers have estimated was $800 million in revenue in 2020, has been fueling its growth spurt.
Byju’s got its start by delivering what students and their families would readily pay for: Test prep. Cofounder Byju Raveendran built a reputation as a compelling and successful tutor, helping students gear up to take India’s Common Admission Test, the entrance exam for the country’s top graduate management schools. His classes grew in size and number. Gokulnath joined him, first as a teacher, then as a cofounder of the company that became Byju. The couple also married. By 2015, they had launched their flagship product, Byju’s Learning App, and were raising millions of dollars in funding.
The company was particularly attuned to the psyche of parents, creating whimsical and, at other times, emotionally compelling commercials that tap into both parents’ worries about whether their kids are learning and kids’ passion for handheld devices. Since its launch, Byju’s says its app has reached 100 million users, of whom 6.5 million are paying subscribers.
Since then, Byju’s has fanned out to provide a variety of learning experiences: pre-recorded and live lessons; hands-on and workbook based learning. “They start in the early years with apps for young learners, so that parents feel their children have a strong head start and are ‘school-ready,’” says Hau. “They offer coding programs (classes and toys) for kids to be ‘future of work-ready.’ They also provide tutoring classes for children to be ‘college-ready,’ and now they are moving from passive to active learning with their ‘FutureSchool’ concept.” (FutureSchool offers project-based coding and math classes with live tutors who serve as coaches.)
Acquisitions and partnerships are a cornerstone of Byju’s early learning programs: It bought Palo Alto-based Osmo in 2019, which combines digital learning with manipulatives, an approach the companies call “phygital.” For instance: Using a tablet’s camera and Osmo’s artificial intelligence software, the system tracks what a child is doing on a (physical) worksheet and responds accordingly to right and wrong answers. “It’s almost like having a teacher looking over you,” Gokulnath says.
With partner Disney, Byju launched its learning app for pre-K through 3rd graders in India in 2019. The Disney characters are compelling, Gokulnath says. “We don’t want anything pushed down people’s throats,” she says. “We want to make them fall in love with learning.” Byju’s launched the package as an annual $200 subscription (which includes the app, workbooks, the Osmo technology and the Disney characters) in the U.S. in June. Called “Byju’s Learning App featuring Disney,” it will compete directly with Age of Learning’s ABC Mouse, as well as with Khan Academy Kids, Nickelodeon, and Sesame Street’s apps.
By contrast, Byju’s FutureSchool (launched in the U.S. this past spring) aims to offer one-to-one tutoring sessions starting with coding (based in part on WhiteHat Jr., which it acquired in August 2020) and eventually including music, fine arts and English to students in the U.S., Brazil, the U.K., Indonesia and others. The company has recruited 11,000 teachers in India to staff the sessions—focusing on hiring women to provide jobs to a group particularly in need of them there. “Some students learn when guided by teachers; others are independent,” says Gokulnath. “Both ways are important and extremely different. Children should be given the freedom to choose.”
In mid-July, Byju’s bought California-based reading platform Epic for $500 million. That product opens up a path for Byju’s to schools. Epic offers a digital library of more than 40,000 books for students ages 12 and under. Consumers pay about $80 a year for the library. It’s free to schools. Epic says that more than 1 million teachers in 90 percent of U.S. elementary schools have signed up for accounts.
Earlier edtech startups, including Curriculet and LightSail, tried to build digital libraries for schools, something that promised to give teachers and librarians far more flexible (and affordable) access to books for students. Epic, by contrast, started in the consumer market where young families snapped up the digital subscriptions. That consumer base gave Epic much-needed muscle in its negotiations with publishers, observes Jennifer Carolan, a partner with Reach Capital, which invested in Epic. Epic was then able to make its catalogue available for free to schools, a strategy that has made Epic “ubiquitous” in schools, Carolan says. She expects to see Byju’s continue to make Epic’s catalogue available for free to schools.
And Byju’s isn’t neglecting older students, either: Many of its other acquisitions, including those made this past week of New Delhi-based Great Learning (for $600 million) and Toppr (for $150 million) deepen Byju’s bench strength in prepping students in grades 5 through 12 to take exams (Toppr) and in helping those in the workforce gain knowledge of fast-moving areas including data science and business analytics, artificial intelligence and machine learning and cyber security (Great Learning).
Altogether, Byju’s combination of products, financial might and expanding embrace of the learners promises to the company an increasingly powerful force in learning technology.
That raises provocative questions for U.S. educators. Among them:
- How will products originally developed for the consumer market fit the needs of schools, particularly those that serve disadvantaged students?
- Will there be more development dollars poured into products that appeal to consumers—and less into products that consumers typically skip (say, middle school civics or history curriculum?)
- How much of an investment will giants such as Byju’s put into researching the effectiveness of its products? In the past most consumers have been less concerned than professional educators about the “research” behind the learning products they buy. Currently Gokulnath says the company most closely tracks metrics such as “engagement” (how much time students spend on the product) and “renewals” (how many customers reup after a year’s use of the product.)
- How will products designed for home users influence parents considering whether to continue to school at home in the wake of viral pandemics?
For educators and parents navigating the world of education technology, international players such as Byju’s may not yet be household names. But they will. And the choices they make will shape the edtech products that learners use in the near future.