Byju's, India's largest electronics technology company, has raised another round of capital. And this new round made Byju the most valuable VC-backed tech company in India at €16.5 billion, surpassing Paytm, which has a valuation of €16 billion. In its latest round, Byju's raised around €350 million from UBS Group, Blackstone, ADQ Abu Dhabi, Zoom founder Eric Yuan's family office and Phoenix Rising - Beacon Holdings. The fundraiser is part of a €1.5 billion the company began raising in April. Most of the capital raised will be used to finance a series of acquisitions Byju's has in mind. In terms of acquisition, since 2017, it has acquired nine companies: the largest on the list, 33-year-old test preparation firm Aakash, for $100 billion. Byju's also acquires rival Toppr in a deal valued at more than €XNUMX million. And reports say that at least three other deals are in various stages of completion.
But why can't Byju reach his profit target?
The edtech space in India led by Byju took the lion's share of seed funding in 2020 when the pandemic triggered a boom in subscriptions to online education services. A group of investors, including new backers like Silver Lake and Alkeon Capital, collectively pumped more than $12 billion into the company last year. Byju's, which is also considering an initial public offering, is aimed at students in kindergarten through grade 80. Byju's app offers math and science lessons through video animations and games. Byju claims to have up to 5,5 million registered users and 25 million subscribers. But in terms of profit, it can't meet its target, and this is where the company's concerns begin. Analysts say Byju's focus on relentless growth and huge marketing costs is holding it back from hitting its profit figures. Byju's is, of course, good at controlling the media narrative, so what we mostly see is its 2020+ million new users on its platform in 70. The startup says it has grown its 4.5 million user base registered students, 80 million annual paid subscriptions, last October. to 5,5 million registered students - 15.000 million annual paid subscriptions - until last April. The edtech startup's efforts to increase its penetration in small cities, heavy investment in offices and the high prices of its annual subscriptions are also preventing it from reaching its ultimate goal. Its entry price of Rs 20.000 to 3.7 per year on subscription is a bit high for students living outside the metropolitan cities. The market size of India's electronic technology sector is estimated to grow 10.4 times over the next five years, reaching €2025 billion by 2.8, from €2020 billion in 37. The segment will likely have more than 2025 million users payment by XNUMX. So all may not be lost for Byju's still.