Valued at $18bn, Bangalore-headquartered Byju’s is not only the world’s most valuable edtech start-up but also India’s most valuable unicorn. No wonder then that the company is expanding into other territories such as the UK, as it develops its use of artificial intelligence (AI) technology in education.
Its Chief Innovation and Learning Officer Dev Roy tells Verdict over email about the unicorn’s expansion last year into Australia, Brazil, Indonesia and Mexico with Byju’s FutureSchool. The app is Byju’s’ flagship platform, delivering maths, coding and music live-learning courses for children.
In the UK meanwhile, Byju’s – stylised as BYJU’S – has recently brought its edtech innovation hub BYJU’S Lab to London’s St Pancras. The ambition of BYJU’s Lab is, Roy says, to “redefine the role of technology in learning, and we’re working with the brightest minds in AI and machine learning to deliver innovative AR, AI, gamification and computer vision capabilities, to do so.”
St Pancras is a fitting location to set up shop. Apart from an iconic hotel and a train station popular with Harry Potter fandom, one can find large Google and YouTube offices alongside renowned places of study such as Central Saint Martin’s and the British Library. In other words, it’s a place where education and tech easily rub shoulders.
The two fields have been getting cosy over the last year, with research firm GlobalData noting that edtech, short for education technology, grew into a $149.2bn industry during 2020 in its recent report on the theme. As Roy explains, Covid-19 is the obvious catalyst for this boom in digital learning, whether by app, video or augmented reality (AR).
“With schools closed during the pandemic and the sudden shift to remote learning, children have lost up to a third of teaching time since the pandemic started,” says the chief innovation officer.
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“Edtechs are providing vital learning opportunities for children across the world, beyond the classroom, to further their learning and spark their creativity.”
GlobalData expects annual growth in edtech to reach 22.9% in 2021, increasing to 23.5% in 2022. Its research puts this as edtech’s peak, with growth rates starting to fall from 2023. By 2030, global edtech revenues will have reached $538.5bn, having grown at a compound annual growth rate (CAGR) of 14.3% between 2019 and 2030.
GlobalData also expects Byju’s to go public at some point next year, naming it as the edtech one-to-watch in its recent report on tech unicorns.
At first glance, edtech may seem too small a field for spending power, considering its burgeoning nature as a theme. But as bears repeating, Byju’s is the most valuable unicorn in India, with some pretty big deals to its name worldwide. One example is the brand’s acquisition of Aakash Educational Services for $1bn in April this year, cited by GlobalData as the biggest M&A deal in the Indian tech scene as a whole since 2019.
Where India trumps China
Edtech is big business therefore, with India having the world’s second-largest edtech market behind the US. As for the UK, Byju's' latest point of expansion, data released by the country's Digital Economy Council in 2020 showed that the British edtech sector was one of the fastest-growing in Europe, assessed to be worth over £3.4bn by mid-2021.
China is another obvious player in the theme, but not so obvious is that edtech is one of the few fields of disruption where Chinese influence will soon diminish. As GlobalData reports, where China falters, India will only grow stronger.
“Investors have heavily backed China’s after-school tuition companies, but their incessant advertising and spiralling prices have prompted political action few could have foreseen,” write researchers. “The Chinese government’s new regulations require tutoring companies to be non-profit, effectively barring foreign investment.
“The impact ends the immediate IPO ambitions of (various companies and has) also wrecked the market capitalizations of Chinese education players listed in the US. The likely outcome is that foreign investment will switch to India, where Byju’s – the most valuable edtech start-up worldwide – will IPO within 18 months.”
Foreign investment is already healthy in the country. According to the UN Conference on Trade and Development (UNCTAD), foreign direct investment (FDI) in India rose by 13% in 2020 compared to the year before, making it one of the world’s only major economies to record an increase in FDI in a year blighted by the pandemic.
Edtech is naturally driving FDI, with Roy saying demand in India is strong for “new and more engaging, personalised ways.”
“The response to BYJU’S in India after we launched initially was significant, as the appetite for learning and creativity is so strong.
“In this way, students are actively participating in their learning,” Roy believes.
AI technology in education: Edtech's edge
Byju’s was founded in 2011 by Byju Raveendran and Divya Gokulnath, its current CEO and director respectively. Since then, Byju’s' focus has been less on content and more on assessing growth and learning in students. According to Raveendran’s founding ethos, it is necessary to understand how individual students interact with the content and pace learning accordingly.
The company has built its edtech capabilities through multiple acquisitions over the last decade, including nine this year alone. Byju’s began by focusing on the school market – from kindergarten to grade 12 – and test preparation services. However, its acquisition of Great Learning last summer moved it beyond schools and into the world of professional upskilling.
Byju’s' acquisition of Epic, which operates a digital reading platform in the US, strengthened its position in the US market. Epic’s platform has a presence across 90% of elementary schools in the US and is used by more than 2 million teachers and 50 million children. In September 2021, it added to that US presence with the acquisition of children’s coding platform Tynker.
Roy took on the role of Chief Innovation and Learning Officer at the company last year, when, for an undisclosed sum, he sold Byju’s his company Digital Aristotle, an edtech startup that applied AI technology to real world problems in education.
“I founded Digital Aristotle with the ambition to use AI and machine learning to effect positive change and outcomes across both education and healthcare,” Roy tells Verdict. “My focus was to improve the efficiencies of the systems that teachers used at school, freeing up their time from admin and other tasks and rather empowering them to spend time doing what they love most – teaching.
“I’ve brought this mindset to BYJU’S, helping to build a learning platform that enables students to enjoy the process of learning and creating; harnessing technology for good to have a positive impact on both students and teachers alike.”
Roy believes Byju’s is trying to solve the “deep-rooted problems” with education and “disrupt ourselves internally to be future ready”. The UK operation taking place under his charge plays a key part in that mission.
“The ambition of our BYJU’S Lab innovation hub in London is to further build out AI and machine learning capabilities in BYJU’S FutureSchool to make it more interactive and engaging,” he explains. “Therefore we’re excited to work with the brightest minds in tech in London to fully transform the way children learn through new technologies.”
With its London office, Byju's will be competing with British edtech leaders such as Learning Technologies Group, MyTutor and Pearson. AI, though, may give it the upper hand in the long run. As GlobalData's edtech research reports, AI is the "hottest trend in the edtech market, with both teachers and students benefiting from it."
The focus on AI within education has prompted Jisc, a UK not-for-profit organisation that supports higher education institutions, to launch a national AI centre to coordinate AI development in education.
The centre will assess AI solutions on the market by testing whether they improve colleges and universities' learning and teaching experience and provide practical, tailored advice and support.
The classroom creep of AI technology in education
Sourcing data from the classroom may be a problematic concept, though, even as it becomes more commonplace in the UK and abroad. CEO of US edtech brand Class Michael Chasen recently told Verdict that with so many classes going online, data collection increases manifold.
“With the push of all this, you have all this data … and that lets us collect information in a way that we haven’t been able to before,” Chasen said.
“When you combine that with predictive analytics and AI, I think for the first time we’re going to have a data set that can really be adapted to how individual students learn, and I think that that’s going to be the next step forward in education.”
Data creep in the classroom though can seem creepy, whether through apps or school classes, especially to parents. It can also fall flat when actually implemented: one needs to only remember the controversial and “biased” grading algorithm used for British exams last year as solution to pandemic disruption.
Roy is aware of such concerns when questioned on the matter by Verdict.
“When it comes to building AI systems, whether it’s to support grading, coursework or to create learning tools, it’s important that the team building the specific programme bring a diverse range of experiences and backgrounds.
“On top of this, testing is vital, to ensure that the system is put through its paces, and to spot any opportunities for improvement and to remove biases, to deliver a platform that is accessible and that can be enjoyed by all.”
For Roy and Byju’s, AI technology in education is ultimately where edtech has the edge over traditional bricks-and-mortar education.
“The goal of implementing AI in learning, whether it’s in primary or secondary school, university or across the enterprise, is meant to improve the experience for students,” he says, nodding to Byju’s' expanding scope. “It can help to make courses more engaging, by adapting to the responses or answers from the student, either increasing in difficulty or encouraging the learner to follow the subject matter that they’re most passionate about.
“AI is invaluable in education, no matter our age or our ability, as technology seeks to further enhance the learning process and to make it more fun and enjoyable for all.”
That personalisation is where Byju’s' USP lies, and is key to its future and how its e-learning services evolve for future generations. When asked about the company’s prospects and beyond, IPO included, Roy believes further disruption is the answer.
“We believe that the market needs standardised education and new formats to be introduced to engage students. To move from the traditional classroom system where teaching is one-way traffic to the one where teachers are facilitators of learning and also, mentors for discussions in classrooms is essential. At BYJU’S, we have made small strides in this direction and with increased traction, we believe this is possible in the near future.
“But our goal beyond numbers is to continue our focus on enjoying education and making students across the world fall in love with learning. This year has been one of incredible growth for BYJU’S, and we’re aiming to continue expanding globally, bringing BYJU’S to new markets and in more languages.”