BYJU ’s has acquired US-based digital reading platform Epic, which focuses on kids under the age of 12, for $500 million.- The Indian edtech giant plans to invest about $1 billion in the US market to expand its presence globally.
- The company believes that the international market would make about a third of its revenue in the next three years.
BYJU’s has flagged off its American expansion plan with the acquisition of US-based digital reading platform Epic, which focuses on kids under the age of 12, for $500 million. Epic runs on a subscription model that gives classrooms and families unlimited access to thousands of books, videos and quizzes.
The seven-year-old American startup, founded by Suren Markosian and Kevin Donahue in 2013, has a user base of two million teachers and 50 million kids registered on the platform. The company claims to have doubled its user base from 20 million kids pre-COVID. Epic has raised about $50 million to date from institutional investors like Creative Artists Agency, Evolution Media and Reach Capital.
This acquisition of Epic is in line with the plan that BYJU’s founder and chief executive officer (CEO) Byju Raveendran described in an $4with Business Insider in November last year.
Markosian, CEO and cofounder of Epic, told Business Insider that the vision behind building Epic was to bring books and children together through technology. The company wanted to remove all the barriers between a book and a child, and help them find the right books so that every child will be excited about reading.
“And so we've built this platform where children can independently discover any book or any content they like to read. The platform makes it a lot of fun to read, and a lot of 100 discoveries, new books, or kids love using it,” Markosian said. Last year, around one billion books were read on Epic’s platform.
BYJU’s looks to go big in the US market
The Indian business will continue to make money from the recently-acquired Aakash, which has a $4 institutes bought for $1 billion in $4.
Anita Kishore, head of strategy at BYJU's told Business Insider that India will continue to be BYJU’s biggest market in terms of revenue due to the presence of BYJU’s core product offering in the country as well as because of the Akash acquisition.
Kishore explained that BYJU’s is planning to focus now on the American market, as the USA is its biggest market outside of India.
“The other advantage that US marketing gives us is the fact that it is English speaking, right? A lot of our products, while you know, they need to be customised, and so on. Given the language is English, we are able to actually scale those products well, with teams in India. Hence, the US has been a key market for us,” she added.
WhiteHat Jr, BYJU’s other portfolio company that was acquired for $4in August 2020, has been folded by BYJU’ into the BYJU’s Future School brand that will focus on international markets like the US, Canada, Australia, New Zealand, and other English speaking markets. The offering was launched last month, with 11,000 female teachers.
For this venture, WhiteHat Jr has also stepped foot outside of its traditional coding for kids offering to introduce Maths. WhiteHat Jr’s CEO and founder Karan Bajaj has been heading this vertical and will introduce other offerings Science, English, fine arts and music classes soon.
Taking a step forward, BYJU’s has also launched its learning app featuring Disney characters to the US last month. The company had also acquired educational game system Osmo two-years-ago, which has now scaled about four-times, as per the pressnote by BYJU’s.
Kishore further added that BYJU’s will be clocking in more than $300 million in revenue from the US market alone in the financial year 2022. Of this, BYJU’s Future School will be clocking in about $100 million+ in revenue, Epic would add another $100 million+ to it and Osmo doing another $100 million+.
Notably, BYJU’s is currently the most valued edtech startup in the world and the highest valued Indian startup. The company has garnered the interest from marquee investors like Chan-Zuckerberg Initiative, Sequoia Capital India, Silver Lake, Tencent, Canada Pension Plan Investment Board (CPPIB), General Atlantic, Tiger Global, Qatar Investment Authority and many more.
The company had reported a revenue of ₹2,800 crore in the financial year ending March 2020, as its user base crossed 50 million. It has doubled its user base twice since then due to the tailwind from remote learning.
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