Hidden Startup Secrets of BYJU’s | BYJU’s Business Model

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BYJU’s is a leading educational technology (edtech) company headquartered in Bangalore, India. Know about BYJU’s Competitors, Business Model, etc.

A 23-year-old man who worked for a UK-based firm was about to make a life-changing decision. 

BYJU’s Startup Story

He used to help his friends prepare for CAT examinations while simultaneously preparing for his own exams. 

Company Details

City: Bengaluru
Founders: Byju Raveendran, Divya Gokulnath
Founded: 2011
Industries: E-Learning, EdTech, Education, Higher Education, Software
Number of employees: 10001+
Revenue: INR 2,428 Cr (FY21)
Funding amount: $2,745,964,432
Official Website: byjus.com

He scored a perfect 100% on his exams and decided to test his abilities by taking the exam again, where he achieved another perfect score. 

Instead of enrolling in IIM, he decided to help other students who wanted to attend IIM and quit his job to start mathematics workshops. 

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The workshops were a huge success, with up to 20,000 students attending to learn from him. He soon became very popular, and with his wife and students, he started a company. Learn More Unacademy Business Model

In 2020, the company’s valuation had surpassed $22 billion. 

However, BYJU’s is currently facing significant losses, with just 231 crores in losses in 2020, which increased to 4588 crores the following year. 

The company’s IPO was cancelled, investors are not providing funding, and over 2.5 thousand employees have been fired from the company.

Why is this happening ?

And what are the powerful business lessons ? which we can learn to implement in our business.

BYJU’s is a Bangalore-based online tutoring company that operates under the name Think and Learn Pvt. Ltd. 
The company’s goal is to provide video lectures to coach children for both competitive and school-based exams. 
In simple terms, BYJU’s K-12 focuses on students from kindergarten to 12th grade. BYJU’s launched its app in 2015 to deliver video lectures, which was an instant success. 
However, there is a twist that should be noted: despite being marketed as an educational company, BYJU’s is not an edtech company

If you observe the company’s operations, you will discover many things that have been hidden until now. So, if BYJU’s is not an edtech company, what is it?

BYJU’s Business Model

BYJU’s is not in the business of selling education; instead, they are in the business of selling hope.
Today, most parents do not want to compromise on their child’s education. 
They want their children to attend the best schools and coaching institutes, even if it means taking out a loan. 
The problem arises when the Student/Child does not perform well, and parents believe that there is an issue with the school or tuition. 
Companies such as BYJU’s take advantage of this by offering their courses as a solution. 
BYJU’s salesmen target parents and prey on their insecurities by promising good marks and a successful career for their child. 
They use this approach to sell their courses to parents. During the sales pitch, children ask questions that the salesmen cannot answer, making the parents believe that they need BYJU’s application. 
The company provides parents with a tablet to use for a 15-day free trial period during which BYJU’s collects a significant amount of data from the child’s usage. 
Using this data, BYJU’s forces parents to purchase a course after the trial period. 
The company emphasizes any deficiencies in the child’s performance, leading parents to believe that the problem is with the education system rather than the child. Learn More Byju’s Raises Funding from Existing Investors Around $250 Mn
BYJU’s uses data-driven marketing techniques to sell their courses, which can ultimately be detrimental to both the child’s education and the family’s finances.
There are many instances where BYJU’s salesmen have sold their courses to parents who cannot afford them. 
These parents may not realize that they have been sold something their child does not need, or they may have taken out a loan to afford it. When investing money in a company, it is crucial to conduct a proper analysis, and this can be challenging.
Company target audience is lower middle-class families, and this is for a good reason. 
Their courses range from 50k to 1 lakh, which is not affordable for those in the poor class. 
Therefore, those in the rich population have better options than BYJU’s, and they may not feel insecure about their child’s education, they have no reason to purchase the courses.
The remaining target audience for BYJU’s is the middle-class and lower-middle-class population, which makes it an ideal market for the company due to several reasons. 
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BYJU’s Founders – Byju Raveendran and Divya Gokulnath
Therefore, Sales Strategy focuses on making parents feel insecure and competitive, and then offers them solutions in the form of courses worth between 50,000 to 1 lakh rupees, which they often sell forcefully.
One of the three main challenges faced by edtech companies is the lack of personal touch. 
On average, BYJU’s sells courses worth 50k to 1 lakh, which makes it clear that their customers are not kids but rather their parents. 
Students are ideally the users of these products, but the buyers are their parents. Since kids are not the decision-makers, they may not be able to connect with the company. 
As a result, BYJU’s has to deal with a major problem, which is a low possibility of recurring revenue, given the high prices available on the platform.
One of the courses being sold at 35k rupees to teach a student of 4th class and this is nothing if we talk about the 11th and 12 class student.
There are no course below 1 lakh for 11 and 12 class children, which makes it super difficult to sell it again and again you can’t sell it again.
You can sell a course which is worth 5k or 10k again and again, but selling a course worth 50k to 1 lakh again and again is very difficult.
But, if you look at its from an organisation perspective company wants growth in revenue every year,
Due to which BYJU’s has faced another problem which is toxic work culture when the company ‘s recurring revenue model is not set. 
There is no way left for the company to force its salesmen to forcefully sell the course to the parents But due to this thing.
There are a number of ways in which being misled into investing in an online course by BYJU’s sales executives can affect families. 
The family’s financial situation could be adversely impacted if they invest their life savings or take on debt to purchase a course that they can’t afford. 
Additionally, the student may not benefit from the course as promised, leading to feelings of disappointment and frustration. Startup Story Of Classplus
The false promises and manipulation used by sales executives can also erode trust in the education system and cause a lack of faith in other educational products or services. 
Overall, families can be left feeling exploited and taken advantage of, which can have long-term effects on their financial and emotional well-being.
Education is a way to move forward in life, but the parents who were forcefully sold courses are now paying EMIs and struggling because someone sold them something they can’t afford and their children don’t even need. 
Many parents come from such a lower background that they are not able to raise their voice against it, even if they complain to whom?
In 2021, BYJU’s revenue was 2428 crore, but their loss was 4588 crore, which is more than 10 times the cumulative loss from 2014-2020. 
BYJU’s spent 2251 crores on marketing in 2021, which is 150 times more than their 2020 expenses, and this shows how it’s backfiring for BYJU’s. 
Venture capitalists are not in the game of business; they are in the game of entering and exiting businesses to create the biggest wealth for themselves.
BYJU’s is an edtech company that saw an increase in revenue when COVID-19 hit in 2020, as many people shifted to online education. 
As a result, its valuation increased, and many venture capitalists started investing in and buying stakes in the company. With this influx of funding, BYJU’s started hiring more people, heavily spending on ads and sponsorships, and making acquisitions to aggressively expand. 
This led to an increase in revenue from 1366 crore in 2019 to 2703 crore in 2020, and the company’s valuation grew from $5.7 billion in 2019 to $18 billion in 2020. 
Venture capitalists who invested during this period were able to triple their money, as the valuation increased rapidly.
As the Covid-19 pandemic subsided, people started shifting back from online to offline education, which had a negative impact on BYJU’s revenue. New Post upGrad Business Model
As the revenue decreased, no new investors were willing to invest in the company, resulting in a drop in valuation. 
Valuation growth happens when there is an increase in revenue and profitability.
In countries like India, it’s difficult to sell a course worth between 50k to 1 lakh without misleading parents, especially for those who cannot afford it. 
For a long time, the company submitted its financials stating a delay from the auditor. 
However, the auditor asked for two things to change the manner of revenue recognition and to change the accounting of the interest paid by BYJU’s to its lending partner for proper analysis.

BYJU’s Founder and Team

BYJU’s was founded by Byju Raveendran in 2011. Byju Raveendran is an Indian entrepreneur and teacher who started the company as a test-prep tutoring service for Indian students preparing for the Common Admission Test (CAT), 
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Which is used for admission to India’s top business schools. 
Over time, the company has expanded its offerings to include a wide range of courses and subjects, including K-12 education, competitive exams, and professional development.

BYJU’s Logo And Tagline

BYJU’s tagline is “Fall in love with learning.” This tagline reflects the company’s mission to make learning engaging and enjoyable for students of all ages. 
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It emphasizes the importance of creating a positive, fun, and memorable learning experience for students that inspires them to keep learning and growing.
The Company Logo is Really Amazing….

BYJU’s Mergers and Acquisition

BYJU’s has been actively acquiring companies to expand its product offerings and increase its reach. Some of the notable mergers and acquisitions by BYJU’s are:
  • Aakash Educational Services Limited (AESL): In April 2021, BYJU’s acquired AESL, one of the largest test-prep companies in India. This acquisition will help BYJU’s expand its reach in the test-prep market and strengthen its position in the K-12 education sector.
  • Osmo: In January 2019, BYJU’s acquired Osmo, a US-based education technology startup that creates learning games for children. This acquisition helped BYJU’s expand its reach in the US and strengthen its position in the early childhood education market.
  • Vidyartha: In March 2017, BYJU’s acquired Vidyartha, a data-driven education startup that provides personalized guidance to students. This acquisition helped BYJU’s integrate data analytics and artificial intelligence into its learning platform to provide more personalized learning experiences to students.

BYJU’s Competitors

BYJU’s is a leading player in the edtech industry in India and globally, but it faces competition from a number of other edtech companies
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Some of the major competitors of BYJU’s include:
  • Unacademy: Unacademy is one of the largest edtech companies in India, offering a variety of courses and test-prep services. Unacademy has a large user base and has raised significant funding to support its growth.
  • Vedantu: Vedantu is an online tutoring platform that offers live, interactive classes for K-12 students. Vedantu’s personalized learning approach and focus on teacher-student interaction have helped it gain popularity in the Indian market.
  • Toppr: Toppr is a learning app for K-12 students that offers personalized learning, video lectures, and test-prep services. Toppr has a large user base in India and has raised significant funding to support its growth.
  • Khan Academy: Khan Academy is a US-based non-profit organization that offers free online education in a variety of subjects. Khan Academy’s extensive library of high-quality educational videos and resources has helped it gain a large following in India and around the world.
  • Coursera: Coursera is a US-based online education company that offers courses from top universities and organizations around the world. Coursera’s focus on high-quality, university-level education and global reach make it a strong competitor for BYJU’s in the professional development market.

What Is Byju’s?

BYJU’s is a leading educational technology (edtech) company headquartered in Bangalore, India.

It was founded in 2011 by Byju Raveendran, an Indian entrepreneur and teacher.

Who Is The Owner Of Byju’s?

BYJU’s was founded by Byju Raveendran in 2011, and he is the current CEO of the company.

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