Byju’s Bags US EdTech Firm with an Epic Buy

Education technology leader Byju’s has acquired US-based kids learning platform Epic in a $500 million cash-and-stock deal.

This is its second-biggest buyout after brick-and-mortar coaching network Aakash Institute, which it snapped up earlier this year for nearly $1 billion.

The Epic acquisition is part of Byju’s big foray into the overseas market, from where it expects annual revenue of $300 million this financial year, cofounder Byju Raveendran said.

The startup said it aims to invest around $1 billion in North America over the next couple of years.

Epic, founded by Suren Markosian and Kevin Donahue, has 50 million users. Epic had around 20 million users in 2019. Markosian and Donahue will continue to run the business.

Evolution Media and Battery Ventures are among its investors. Neither of these companies disclosed details of the transaction. “It is the largest B2C (business-to-consumer) ed-tech company in the K-12 segment and has a strong product capability that fits well into our overall plan of building an ed-tech ecosystem,” said Raveendran.

Byju’s has been on a fundraising spree since last year, using the capital to finance large-sized acquisitions. After having raised $1 billion in 2020 from global and domestic investors, the decacorn mopped up almost $1.5 billion from investors such as UBS Group, Blackstone, Abu Dhabi’s sovereign fund ADQ and others in the last few months.

Some of its early backers include Lightspeed Venture Partners, Qatar Investment Authority, Owl Ventures, General Atlantic, Tiger Global, Tencent, Verlinvest and Sofina. “In some of the new markets, we will be in a growth phase, and we will invest to build similar brand and sector awareness (like it did India). With strong organic growth and these acquisitions, we will start adding significant numbers in our total revenue and you will see us accelerating over the next many years even on a large base,” Raveendran said.

“India’s growth is getting accelerated with Byju’s growth and Aakash. With Byju’s Future School nicely scaling (abroad), we will have three businesses overseas that will have $100 million revenue,” he added. Its coding-for-kids subsidiary WhiteHat Jr played an important role in building the new platform and Karan Bajaj, who founded WhiteHat Jr, is heading this business.

At a time when many top-tier startups and tech companies like Zomato, Paytm and Mobikwik have either gone public or in the process of doing so later this year, Raveendran said Byju’s is looking at an IPO timeline of 15-18 months. However, that timeline is not set in stone as it still sees strong interest from investors in the private markets to raise capital, he added.

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