Good Morning! It’s Monday (#MJ Mondays as some NBA fans might say) and I hope y’all had a fun/relaxing weekend in shelter. I spent a bunch of the weekend working on a fun side project inspired by the tweets of a popular VC- https://twitter.com/anmolm_/status/1256984536434397186 and catching up on the ESPN Michael Jordan docu-series (🇮🇳 folks it’s on Netflix and a must watch).
There was a bunch of EdTech news over the weekend so going to take some time to unpack that today:
➡️ Classplus, one of the fastest growing edtech companies in India, just announced a $8.2M Series B led by RTP Global with existing investors Blume Ventures, Sequoia Surge Ventures & Strive Ventures also participating.
➡️ This news comes just months after their Pre-Series A, but is in line with the massive investments being made in the Indian EdTech segment. Classplus is quite different from some of the more popular Indian EdTech companies like Byju’s (more on them next) or Unacademy.
➡️ The company is building software and a platform for coaching centers all over the country to digitize them and bring them online. If the likes of Khatabook & JioMart are helping digitize kirana stores, Classplus is doing the same for smaller coaching centers.
➡️ The platform lets coaching centers manage administrative tasks like attendance, notifications & billing while students can also consume content & lessons from the app as well. It lets coaching centers focus on the education part of their business while they manage the digitization layer.
➡️ The company has already seen massive growth, which is probably being accelerated by the lockdown with over 3000 institutions & half a million students! It seems like the company is focussed on building a vertical SaaS platform as it focusses in on the coaching center industry and continues to build out solutions for different areas in the stack.
➡️ Byju’s, the Indian EdTech behemoth, is in talks to raise an additional $400M in fresh capital which would put the company’s valuation at $10B and would make the second most valuable startup after Paytm.
➡️ Just like Classplus, the news comes after Byju’s announcing a $200M fundraise from General Atlantic that valued the company at $8B. But why does Byju’s need all this capital?
➡️ This kind of baffles me. The company has claimed to have a very low burn (and said it was profitable on a full-year basis). To put into context, the company’s losses over the last couple of years (FY16 → FY19) totals to ₹155 Cr, with losses of only ₹8.8 Cr ($1.25M) in the financial year ending in March 2019.
➡️ Even if the losses for FY20 somehow exceed the last 4 years combined (let’s say ₹200 Cr) that is still only burning $27M a year, it’s not entirely certain why Byju’s needs new capital given their current warchest.
➡️ The company has raised over a billion dollars (prior to the $400M fundraise), and has also delivered secondary exits to some of it’s early investors (General Atlantic acquiring some of Sequoia India & The Chan Zuckerberg Initiative’s stakes).
➡️ I’m still not sure why Byju’s needs all this fresh capital, but hey maybe The Morning Context or The Ken does a piece on this soon to explain what the company is up to.
Feedback & ❤️ always appreciated
More tomorrow :) BONUS (Tweet of the day): https://twitter.com/chetrisunil11/status/1256570332871180288