With the introduction of EdTech platforms in recent years, the field of education has seen considerable upheaval. Among them, BYJU'S, an Indian-based online learning platform, saw exceptional success and rose to the top of the international education field. But as with any rapid rise there frequently comes a turning point.
The Rise of BYJU'S
Byju Raveendran, a former mathematics teacher from India, launched BYJU'S in 2011. The platform's initial focus was on offering students in India who were studying for competitive exams video-based learning materials. Due to its compelling teaching strategies that used technology, animation, and narrative to simplify complicated subjects, BYJU'S soon became well-known.
Byju's has a freemium business strategy, providing users with both free and premium (paid) services. The business requests the students' information through its website or application in exchange for a free 15-day trial. The student must purchase the courses from BYJU's in order to access the full content once the free trial has ended. The business offers one-on-one mentorship to its customers and also gives feedback to the parents of the children. Additionally, BYJU provides classroom coaching in Noida, Gurgaon, and other locations.
BYJU's has three sources of income.The first is done using the app. Students who want to continue their studies on BYJU's must buy the courses after the 15-day free trial period. The app's selection of test series, courses, and other offerings actually pushes users to buy.
Customers must purchase electronic tablets from BYJU's when they purchase the course of their choosing. This tablet has materials for the course, including videos, exams, practice questions, and quizzes. The third method of generating income is through classroom teaching. Only a few cities can provide these classes.
A case study on BYJU's was included in the Harvard Business School curriculum in March 2017. When Byju's began conducting business on a worldwide scale, it was undoubtedly one of the largest non-financial successes for any corporation.
Byju's plans to go for an IPO within the next 8 to 10 months. It is the second-highest valued firm in India, founded by Byju Raveendran and valued at around $16.8 billion, has already gained recognition in the startup community for its acquisitions and fundraises.
Byju's has now agreed to join the special-purpose acquisition company (SPAC) of Churchill Capital, a prominent worldwide strategic advising company, and raise about $4 billion in response to the IPO's continued growth. According to estimates from December 16, 2021, the business would be valued at over $48 billion in such an IPO transaction.
Challenges Faced by the Ed-Tech Giant
According to Byju Raveendran, the company's founder, BYJU's faces a significant difficulty in turning students into paying customers once the free trial period has been over. Finding acceptable partners to help with this development is the second hurdle for the organization, which is also aiming to expand to other English-speaking nations.
According to reports, the Board of Control for Cricket in India (BCCI) is owed close to Rs 86.21 crore by Byju's, the company that has sponsored the Indian cricket team's jerseys. Byju Raveendran's wife and the co-founder of Byju's, Divya Gokulnath have both disputed these news stories, and they have also noted that the Indian Cricket Board has done the same. The rights were first purchased from the manufacturer of smartphones OPPO in 2019, and the previous agreement between the edtech company and BCCI was terminated in March 2022.
The Department of Consumer Affairs has named Byju's as one of the edtech firms that missells courses. On June 24, 2022, a number of edtech companies, including Unacademy, UpGrad, Great Learning, and others, attended a meeting with the India Edtech Consortium (IEC), where they were alerted to the numerous consumer complaints made against these businesses, the majority of which were directed at Byju's and its subsidiaries.
Byju's famous Divya Gokulnath provided a thorough action strategy to handle customer concerns. Additionally, it has been suggested that the most valuable startup in India cooperate with the Advertising Standards Council of India (ASCI) for the promises it makes in its advertisements.
Byju's has purchased Aakash Educational Services Ltd (AESL) to increase its market share in the nation's test preparation market.
BYJU’s Revenue & Economic Downfall
Byju’s was the most valuable startup in India as of June 2021 , which raised $350 million at a $16.5 billion post-money valuation. On July 21, Byju's said that it has paid $500 million to acquire the California-based ed-tech platform Epic, which has more than 2 million teachers and 50 million students. On July 26, Byju's announced that it will pay $600 million to acquire the professional training and higher education platform Great Learning.
Byju's reported in October 2022 that it has secured $250 million in a fresh round of fundraising at a $22 billion value. The firm reported approximately Rs. 10,000 crore in gross revenues for FY 22 in September 2022. The business earned Rs. 4530 crore in sales between April and July 2022.As part of an ongoing $1 billion round, Byju's secured $250 million from Davidson Kempner Capital Management in May 2023. The valuation stayed at $22 billion.
While BYJU'S experienced rapid growth, several factors contributed to its eventual downfall. One crucial factor was the company's overreliance on aggressive marketing tactics. As BYJU'S pursued aggressive expansion, it inundated users with advertisements, which led to user fatigue and perception of the platform as overly commercialized. Additionally, BYJU'S faced criticism for its high subscription fees, making it inaccessible to many lower-income families.
BYJU'S rise and downfall provide valuable lessons for the EdTech industry. While the company initially succeeded by addressing the demand for accessible education and leveraging innovative teaching methodologies, its aggressive growth strategy, overreliance on marketing, and inability to adapt to evolving market dynamics ultimately led to its decline.
This serves as a reminder that sustained success in the EdTech space requires a delicate balance between innovation, affordability, and a customer-centric approach. The story of BYJU'S highlights the importance of staying agile, maintaining a focus on quality, and continuously adapting to meet the changing needs of learners worldwide.