Friday, August 7, 2020

Byju's buys edtech start-up Whitehat Jr for $300 million


Bajaj sold his 18-month-old start-up WhiteHat Jr to Byju Raveendran for $300 million in an all-cash deal - over the video conferencing platform Zoom. The deal is the biggest in the Indian edtech sector by far.

Karan Bajaj is a well-travelled person.

His travels include solo backpacking across South America and eastern Europe, and taking trips with his wife from Europe to India by road.

He is also a big believer in a boundaryless world.

Bajaj is founder of Mumbai-based edtech start-up WhiteHat Jr, which teaches coding to children.

Bajaj has never met Byju Raveendran, founder & chief executive officer of education decacorn Byju’s, in person.

A few weeks ago, when the country was under lockdown to check the spread of coronavirus, Raveendran had reached out to Bajaj over WhatsApp and then a few more Zoom meetings had followed.

After that Bajaj sold his 18-month-old start-up to Raveendran for $300 million (approximately Rs 2,240 crore) in an all-cash deal - over the video conferencing platform Zoom itself.

The deal - the biggest in the Indian edtech sector by far - was announced by Byju’s on Wednesday.

“After we (Raveendran) connected, there was immediately a very strong feeling of mutual vision alignment,” Bajaj said.

“He has a very similar boundary-less vision of the world, where he believes that Indian education products can go anywhere in the world.”

An alumnus of Birla Institute of Technology, Bajaj founded WhiteHat Jr in November 2018.

The start-up is backed by Nexus Venture Partners, Omidyar Network India, and Owl Ventures, which have made returns of over $140 million from this acquisition, according to sources.

What also caught the attention of Byju’s to do this acquisition is that WhiteHat Jr reached a $150-million annual revenue run rate within 18 months since going live while utilising only a fraction of the $11-million cumulative funding.

The platform has introduced three million kids to coding, currently conducts 20,000 live classes per day taught by 5,000 teachers of WhiteHat Jr.

One of the other reasons was that the company had a successful pilot launch in the US. Its US business is growing at more than 100 per cent each month.

This has now given it the confidence to scale in major global markets.

The firm plans to expand to other global markets such as Canada, UK, Australia, and New Zealand after strong growth in the US.

“We now have aggressive plans to expand in (global markets),” said Bajaj.

“I felt anything I could accomplish on my own, I would be able to do it faster and better with Byju’s.”

After announcing the deal, Raveendran said: “WhiteHat Jr’s coding product capabilities, combined with our pedagogy, expertise and scale, will help expand our learning offerings for school students.”

Byju’s also said the new education policy also stresses on teaching coding skills from early classes.

Bajaj also said he aims to create at least 100,000 teaching jobs in India in the next three years.

“Let’s bring back the golden age of the teaching profession, where teachers are paid well like an IIM or IIT graduate because of the fact that we are able to teach kids all over the world,” said Bajaj, who will continue to lead and scale the business in markets such as the US and India.

It would leverage the expertise and resources of the parent company Byju’s.

Bajaj’s start-up offers a range of artificial intelligence course options designed for children aged 6-14, thereby, preparing them for the new digital world.

It helps them build commercial-ready games, animations and apps online using the fundamentals of coding.

This includes focusing on using a systematic approach to help school-going children learn the fundamentals of AI programming and Python machine learning.

All classes are taught Live 1:1 online in the comfort of the child’s home by certified teachers.

Born into an Army family and who spent his childhood in Shimla, Bajaj before starting WhiteHat Jr served as CEO for Discovery, where he led Discovery Networks (Discovery Channel, TLC, Animal Planet and Discovery Kids ) in South Asia.

He was also a senior director at Krafts Food Group and project leader at the Boston Consulting Group. His early career stint included managerial role at Procter & Gamble.

Bajaj has also authored three contemporary Indian novels, Keep Off the GrassJohnny Gone Down, and The Seeker.

His first novel, Keep Off the Grass, became a bestseller with more than 70,000 copies sold in the year of release. 

Together his novels have sold more than 200,000 copies in India.

“Our vision is to become the complete leaders in live tutoring and make the art of learning very creative and delightful for the kids,” he said.


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