Byju’s buys US app Epic for $500 million
- Byju’s Future School, an online one-on-one live learning platform for math and coding, was released in June, which enabled 11,000 women teachers help students interactively learn these subjects.
Byju’s acquired Epic, an online reading platform for kids, for $500 million in a cash-and-stock deal as India’s most valuable internet company takes steps to deepen its presence in the US and expand into other English-speaking markets.
The purchase will help the Bengaluru-based online education provider accelerate its overseas expansion plan as well as venture into a new complementary segment—online reading. In 2019, Byju’s bought US-based educational gaming startup Osmo.
Byju’s, which has seen a spike in business as schools shut down physical classes because of the pandemic, said it will invest $1 billion in North America to help students fall in love with learning.
Epic, which sells subscriptions for a digital library for students under 12 years, will soon be available in India and other English-speaking markets such as Australia, New Zealand and Canada.
The transaction follows Byju’s acquiring classroom tutorial chain Aakash Educational Services for $950 million earlier this year. Last year, it bought coding startup WhiteHat Jr for around $300 million.
Byju’s has made around 10 acquisitions in recent years. Besides Aakash and Epic, it also acquired tutoring firm HashLearn and doubt clearing platform Scholr this year.
Acquiring Epic will help Byju’s expand its US footprint with access to more than 2 million teachers and 50 million kids in Epic’s existing user base, which more than doubled over the last year due to the pandemic.
Epic’s chief executive Suren Markosian and co-founder Kevin Donahue will remain in their roles.
“Reading is a powerful tool to learn. While Epic looks at creating lifelong readers, for us, it’s about making lifelong learners. Both are very complementary. We are yet to meet in person, but we realized there are a lot of synergies, and it’s an expertise we don’t have. There is an opportunity to disrupt almost everything in learning because it’s still early days for what technology can do. There is an opportunity to scale Epic globally and build the platform together,” Byju Raveendran, founder and CEO of Byju’s, said in an interview.
Byju’s recently raised $1.5 billion from UBS Group, Abu Dhabi sovereign fund ADQ, Blackstone Group Lp and others and is currently valued at $16.5 billion.
“We created Epic to make quality books more accessible to kids everywhere and to build a safe place for them to discover the joy and magic of reading. The alignment of our missions and shared passion makes Byju’s the perfect partner as we’re confident this acquisition will ignite excitement for learning around the world,” said Epic’s Markosian.
Byju’s has been aiming to go deeper into the US, both inorganically as well as with its own products. Among areas Raveendran plans to enter are the reskilling and upskilling space.
“The question always is whether to build or acquire. In areas where we don’t have the expertise, we will acquire. In about 3-4 years, our revenue share between India and overseas markets will be 60:40,” he said.
Byju’s said the Epic acquisition will not only lead to significant investments in technology, which will help further personalized learning for students but also enable Byju’s to become a natural part of America’s learning culture.
Raveendran said content consumption is a lot more global today, particularly for the K-12 age group, and there isn’t much need to localize, especially in English-speaking markets such as India.
Byju’s Future School, an online one-on-one live learning platform for math and coding, was released in June, which enabled 11,000 women teachers help students interactively learn these subjects.
Raveendran said its acquisitions are primarily to enable integration with the respective firms. This kind of integration, for instance, has seen Osmo scale fourfold since it was acquired, he said.
Epic has a collection of over 40,000 books, audiobooks and videos from more than 250 of the world’s best publishers. It has made access free to educators, and more than 2 million teachers have signed up for classroom use. The edtech space has seen strong growth globally, including in India, with the Covid-19 pandemic serving as an inflection point. Many offline classes went online to ensure continuity of education while adhering to social distancing norms.
Byju’s is estimated to have raised about $1.5 billion since April last year in multiple tranches. Byju’s is backed by marquee investors, including General Atlantic, Sequoia Capital, the Chan-Zuckerberg Initiative, Naspers, Silver Lake and Tiger Global. Launched in 2015, Byju’s has 100 million students using its services globally.
(With inputs from PTI)