First love? Maths, Chemistry… I love maths this much (a little, bespectacled boy spreads his hands wide open). Ad connoisseurs will remember these lines from Byju’s earliest campaign. LinEngage, MullenLowe Lintas Group’s marketing agency, have done quite the job of introducing TV-viewers to the catch-phrase ‘Fall in love with learning’. Internationally, the e-learning space is burgeoning with platforms such as Coursera, Lynda (now LinkedIn Learning), Udemy, Udacity, and MasterClass. Homegrown players — Byju’s, Toppr, and younger ones such as Cuemath — are also building a strong case for themselves.
This is evident in how bullish investors and venture capitalists are on them (See: Bright future). Tencent, Sequoia Capital India, Chan Zuckerberg Initiative (CZI), Naspers, and Lightspeed Venture Partners are some of the investors on board Byju’s; Alteria Capital and Helion Venture Partners are among the handful backing Toppr; while Alphabet, Sequoia Capital India, and Unitus Ventures fund Cuemath.
The pro-e-learning sentiment is undoubtedly growing. K Ganesh, serial entrepreneur and patron of start-ups such as Bigbasket, FreshMenu, Portea Medical through GrowthStory, says this is driven by convenience. “People want services when and where they are. Gone are the days where you waited in a queue in a bank to withdraw money,” he says.
Today’s tech-savvy learner also has the attention span of a goldfish and needs constant stimulus to remain engaged. The old hour-long lectures don’t work. Lessons have to be packaged in multiple media formats: YouTube, audiobooks, text, and through interactive question-answer sessions. If you don’t ask a question every two minutes, the student gets bored. This multiplicity also helps e-learning platforms adapt and cater to individual student’s preferences.
Ganesh says, “Earlier, it was okay to teach a class of 70 students. The teacher catered to the average student. The best students would understand and the poorest student wouldn’t.” This crying need for a new way of learning converged with low data rates and cheap smartphones. “These factors have converged together for the first time anywhere in the world, and that’s made the edtech boom possible in India,” says Ganesh. India is still far behind its neighbour China, though, which has seven edtech unicorns — VIPKid, 17zuoye, Zuoyebang, iTutorGroup, Hujiang, Yuanfudao, and Zhihu. Byju’s is the sole Indian company that has crossed $1 billion in valuation.
Today’s scenario is poles apart from when Ganesh started TutorVista, in 2005. The e-learning platform targeted international students but was limited to desktop computers and constrained by the time’s primitive internet connectivity and technology. After being bought by Pearson in 2009, it was acquired by Byju’s in July 2017. Byju’s was looking to expand in the US where TutorVista has a good presence.
Byju Raveendran’s platform is currently the most popular. The two-time 100-percentiler in CAT helped a few students crack India’s premiere MBA entrance examination. Some of his students who believed in his vision and teaching methods joined him to start Bengaluru-based Think and Learn in 2011. It has raised $820 million over nine rounds of funding, as of March 2019, and just crossed $5 billion in valuation.
Manipal Group’s Ranjan Pai was among the initial investors in Byju’s through Aarin Capital. He says, “We invested in Byju’s in his early angel rounds. Besides being smart, the founder was extremely passionate about what he was doing. At the time, the company’s revenue of 130 million was small, and the investment was a leap of faith. But it has paid off.”
The app-based platform has a subscription model. Users download the application, select the class (from IV-XII), or competitive exams (JEE, CAT, IAS, NEET) they want to prepare for, and study. Presently, they have 2.4 million paid users, and are growing at 120,000 to 130,000 paid users monthly.
A portion of the video content and exercises is free. However, pay up and you’ll have access to all the bespoke, sci-fi-style multimedia content that Byju’s develops in-house with a nearly 1,100-strong team. This is the kind of content that even makes parents want to sit and watch. After all, the brand invests about 60-75% of its capital on content, or as Byju’s COO Mrinal Mohit says, “We are a content-first company. Content is in our DNA.” The annual course fee varies from 4,000 – 80,000 depending on the grade.
Toppr, Byju’s closest competitor, was started by two IIT Bombay graduates, Zishaan Hayath and Hemanth Goteti in 2013. Earlier in 2008, the duo founded Chaupaati Bazaar, an e-commerce platform acquired by the Future Group in 2010. Hayath and Goteti foresaw technology becoming a catalyst in the education sector, which is how they decided on a second stint as co-founders.
Byju’s reverse-engineered its way from CAT coaching to Class IV. Raveendran and team recently launched its ‘Early Learn’ app for students in Class I-III. Meanwhile, Mumbai-based Toppr targeted the schooling sector from the get-go. Besides CBSE and ICSE, Toppr covers the syllabi of 18 other state boards. It also caters to a roster of engineering, medical, and commerce entrance exams, along with national and international Olympiad exams. However, it doesn’t cater to management-entrance exams such as CAT, GMAT and XAT.
Byju’s and Toppr are different in other ways too. Where Byju’s focuses on concept-based subjects such as maths and science, Toppr spares no subject in a syllabus. Toppr also offers its online classes for free. The student, however, does not have access to mock-tests, adaptive practice sessions, or personalised doubt-solving sessions. A fully loaded annual subscription from Toppr with all the features costs between 45,000 and 60,000.
Hayath says, “Byju’s forte is teaching, whereas we are a technology company. The differentiator is in our DNA.” Toppr has raised $54.4 million in eight rounds of funding.
But, how did Byju’s race ahead? Note that Byju’s, the app, piggybacked on the popularity and success of Raveendran’s CAT coaching classes which started back in 2008. And let’s not forget their strong advertisement campaigns. Meanwhile, Toppr started from scratch.
Vinod Murali of Alteria Capital says, “Both Raveendran and Hayath are ‘alpha’ entrepreneurs, given their strong focus on quality and long-term vision. Toppr is about a year behind Byju’s in terms of valuation, but is perfectly positioned to be the next edtech unicorn from India.”
Murali was closely associated with Byju’s. InnoVen Capital, his previous company, invested a total of 8.7 million in Byju’s and logistics firm Shadowfax in 2016. Later, Alteria funded Toppr and even considered investing in Cuemath, another start-up that targets mathematical concepts. But Alteria didn’t go through with funding the third, saying Cuemath’s model was not as strong as the earlier two.
Cuemath’s founder Manan Khurma, however, is undeterred from his mission of making maths less formidable. The IIT Delhi graduate started his edtech company in 2014, believing the fear associated with the subject comes from the rote-reproducing and formula-intensive manner employed in schools.
“Mathematics is essential, given the high requirement for analytical skills in current and future job profiles,” says Khurma. Cuemath has raised funding gradually, $19 million in two rounds, over five years. Besides being solely focused on mathematics, the start-up follows a different teaching model. Unlike Byju’s and Toppr’s app-based interface, Cuemath is building a network of hyper-local offline classrooms across the country.
The classes are conducted by ex-teachers, qualified mathematics professionals or engineers with a passion for teaching. However, instead of teaching concepts from scratch, the teachers are part of the model to ensure that the children finish the course content. The content comprises of a combination of textbook and tablet-based interactive programmes developed in-house by Khurma and a team of 20 content developers.
Cuemath’s model addresses a weakness — the lack of supervision. In Khurma’s words, “Other platforms assume too much on the part of the student. They feel they will develop great content and their job is done.”
For instance, both Byju’s and Toppr function only via their app. Students clear their doubts by posting a question through the app’s chat window. The app’s subject experts, mostly in-house teachers and highly qualified content-specialists, then post a solution.
Khurma points out how 95% of the time, the student is not motivated enough to consume the content and work with it in a disciplined manner. “The real problem to solve in education is consumption, not content. I think there’s great content out there, a lot of it free,” says Khurma.
Cuemath follows a unique revenue model. At about 2,000 per month per student (irrespective of the grade), it is on the affordable side of supplementary classes/courses. Their teachers undergo a rigorous training process before induction and receive 60% of the revenue per student. They handle about 20 students a day in a locality.
In all, Cuemath caters to about 30,000 students from kindergarten to Class X (since the time it was founded in 2013). This is a fraction of Byju’s and Toppr’s user base. The frontrunners measure their users based on the number of app downloads; 30 million and 7.2 million, respectively. A third of these downloads are from Tier-II and Tier-III cities.
Cuemath may have fallen behind because it has relied heavily on word-of-mouth and not on heavy-hitting ad campaigns. Compare that with Byju’s that reserves 20-25% of its capital for advertising and marketing (Toppr did not reveal numbers).
All things considered, Murali puts it across best. According to him, edtech companies are built on three pillars: (a) appropriate content and the value it adds for the user, (b) the technology platform and how seamless it is to use, and (c) the brand’s selling engine, how it reaches out to its buyers post readying its content.
In this respect, Byju’s has a massive head-start. It’s got a solid, and ever-improving content repository, a proven platform, and an aggressive sales force. All it must do now is focusing on building a more solid company, says Murali.
About Toppr, he says it has the content and the platform but needs to focus on building its sales engine. It presently has about 100,000 paid users on its app, but without onboarding more students, scale will remain a weakness. Cuemath has quality content on its side. However, it must make its tablet-teacher hybrid platform more seamless, increase their userbase and spread their network across the country. Further, Khurma and team needs to amp up their sales force.
While technology is changing the face of private tuitions, how are the older, classroom-based players adapting to the shift? Let’s look at Triumphant Institute of Management Education (TIME), a popular chain of classroom coaching centres known for its MBA entrance training. They also cater to K12 (the years spanning from kindergarten through to Class XII) students and competitive exam takers (JEE, GATE and so on).
Sarith Nair, general manager at TIME, explains the demerits of the ‘new’ way of learning on a mobile phone. For one, it takes peer-interaction and the element of competition and mutual learning, out of the equation. In a class, the teacher keeps an eye on whether the student is paying attention. With an app, the personal touch is missing. Next, the screen has become a source of distraction for students and adults alike. As a result, it’s an easy temptation to shut the books — in this case, the app — and open Facebook, or Instagram.
However, Nair agrees apps are an excellent platform for test-taking and making learning engaging. TIME. has nearly all its testing machinery on its mobile app, which makes taking a mock test, revising formulae, or even watching its video lectures convenient.
Nair adds that while it is an excellent tool for the disciplined, it is not enough for children to study independently. “The apps may have much more utility five to ten years down the line if our examination patterns change. However, for now, we are taking a wait-and-watch approach, and not jumping onto the edtech bandwagon.”
TIME is already a strong player in the coaching space since the early 2000s, and plenty of CAT rankers come out of TIME every year. As a result, getting new students for such an established player won’t be an issue.
Institutes such as TIME have another advantage. They already have their study material ready, which only requires updates based on changing school syllabi. Their content development relies heavily on previous year questions of all major exams, be it CAT, the K12 programme, or engineering exams. Additionally, their R&D faculty comes from major management institutes such as SP Jain, IIMs, and top-tier engineering colleges such as IITs and NITs.
On the other hand, content development is a major pain-point for apps such as Toppr, Cuemath and Byju’s. It needs to be developed from scratch and requires major investment of time and money. Mohit says Byju’s tech team often produces only a few seconds of content in a day. With topical videos ranging from 10 and 20 minutes, the team is ever wishful for more hours in a day. Both old and new players have avoided involving schools for developing course content, believing the latter to be set in their ways about teaching methodology and syllabus.
The other bottleneck is internet connectivity. Urbanites may throw their dongles, curse the wi-fi routers, or call up customer care. But, a healthy portion of our population doesn’t even know what YouTube is. Nevertheless, the edtech start-ups brush aside the awareness and connectivity issue as a challenge that time will sort out. Thanks to the likes of Reliance Jio, smaller cities will soon turn into opportunities. Byju’s already has about 75% of its users from outside metros.
Raveendran has an encouraging, almost utopian take on the future of the edtech space in India. “The ideal learning ecosystem is the one where the focus is completely on students and their learning requirements and not on how much they score in exams. It’s where students take the initiative to learn on their own and teachers move to a mentor’s role,” he says. The classrooms of tomorrow may be made up of students with their gadgets, with teachers only stepping in to make those interactions smoother.