As M&a Ramps up In India’s Startup Ecosystem, Lessons from Byju’s

(Originally published on Linkedin March 3, 2022)

Learning, they say, never stops. When schools went remote, learning suffered. But education didn’t come to an end. The learning methods, however, changed. This is when the edtech sector witnessed exponential growth. And this ascent is likely to continue.

In India, BYJU’S has nearly become synonymous with this rise, helping students find the right fit for changing requirements across their education journey.

Byju Raveendran, founder of BYJU’S, began his entrepreneurial journey led by his passion to teach. Putting technology in the mix long before “edtech” became a buzzword, he initially began recording his mathematics workshops. And then scaled up to offer video learning over the Internet to students for the K-12 curriculum.

Over the years, he has built the company organically, as well as by adding capability through acquisitions. And many of the larger acquisitions have been during the pandemic.

I have always admired Byju’s focus, energy and clarity of thought, and this session that I organised on behalf of TiE-Delhi NCR, offers further insight into how BYJU’S made acquisitions such as Osmo and Great Learning, and continues to integrate them successfully. The video of the session is at the bottom of this article (the session starts at the 17m 40s mark).

In a world where acquisitions fail a majority of the time, BYJU’S has a stellar track record. Byju says he wants to reverse the trend: “We’ll make nine out of 10 (acquisitions) work”. The differentiating factor, he says, is to think of them as integrations.

As companies grow, integrating culture becomes a key impediment, but Byju, true to his vision, has turned that very hurdle into a strength.

It was also enlightening to hear Pramod Sharma, president, technology and products at BYJU’S and the founder-CEO of Osmo (which was acquired by BYJU’S in 2019); and Mohan Lakhamraju, whose e-learning platform Great Learning joined the fold last year, on how they assimilated with BYJU’S.

Here are some of the key points that stood out in the conversation:

How Byju’s Makes Its Acquisitions Work

  1. Think of acquisitions as integrations: Osmo, which was BYJU’S first large acquisition, was assimilated and scaled quickly along with BYJU’S core offerings. Byju has a philosophy. While he admits it is tough to integrate, especially a cross-border acquisition, he says that you don’t fiddle with the culture. “Culture has to remain. Culture is defined by people, so we make sure that the people from the company we acquired stay.” Both Osmo and Great Learning run the businesses as independent units within BYJU’S.
  2. What acquirees want: Pramod says that Osmo had a four-point formula for evaluating the deal with BYJU’S — the potential for business upside, downside, how much freedom Osmo would have as a company, and whether they liked the people they were going to be acquired by. Once the acquisition happened, the process was nothing but seamless and Pramod’s fears, as they say, were laid to rest.
  3. Toeing the thin line between intervention and outside support: When working with people from different organisations, different philosophies, managing egos is no easy task. And BYJU’S has had to integrate 18 different organisational points of view. They did that by creating something they call “super pods”. These are projects where three or four different companies within the BYJU’S ecosystem come together to solve a common problem. Each brings their own unique ability to the project, cutting down turnaround time significantly. With time and practice, BYJU’S has also cultivated not having a know-it-all attitude as the acquiring entity. A super pod example that Byju cites is the “Create With Math” product launched on WhiteHat Jr within just five months of its acquisition. It took teams from BYJU’S, Osmo, and WhiteHat Jr to come together, and solve a common problem of making Maths more interactive for students.
  4. Opportunity cost: Acquisitions such as Aakash Educational Services Limited (AESL) were more about opportunity cost, not just about expanding to a new geography or segment. Byju calls the consideration paid to buy AESL the opportunity cost of acquiring the right capability at the right time. Building the kind of on-ground network that Aakash has would otherwise take three or four years, and given the inflection point hybrid learning is at, the acquisition was well-timed. Much like AESL, Great Learning opened up a new segment for BYJU’S, with $100 million strong bookings at the time of the acquisition. Additionally, Epic, the US-based digital reading platform, gave BYJU’S access to the US market, and the new format of reading. To put it simply, BYJU’S has found complementary capabilities across its buys, perfecting the art of intervening only when required.
  5. It’s all about the people: One issue in cross-border acquisitions, says Pramod, is the sheer volume of legal work required. The time to close a transaction runs into well over six months. Keeping up the morale, ensuring the management and employees are on board during the transition months, and having conversations about what changes they can expect, are important, he adds. At the core of all business, new and old, are the people building them. So keeping them apprised of what to expect is important. With an ongoing acquisition, the fear of the unknown is the biggest concern for employees of the target company. What do they get from the acquirer financially and culturally, are their jobs safe? Answering all these concerns and more in real-time is key to the success of the buy.

Byju says he wants to build his company to be the largest education platform globally. An achievable goal, given how BYJU’S has managed to keep a sense of individual culture alive in all the companies that have become part of its fold. These acquisitions are not just successful business transactions, but an extension of the core purpose of BYJU’S — providing education to students wherever they are and in whatever phase of life they are.

Below is the video of this session. Please fast forward to the 17m 40s mark for the start of the session.


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Disclosure: Lightspeed India has been an investor in BYJU’S since 2016.

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