Is BYJU’s really a good business?

In 2017 it spent 20% on marketing. I would expect sales is 30% – putting S&M at ~50% of revenue. In 2018, the company did 500 Cr ($80 MM) of revenue, likely spent 250Cr ($40 MM) on S&M adding 450K paid users. That puts CAC ( Customer acquisition cost ) at ~$88. It sells courses for ~$400, and the key “unit” cost is content which is spread across years & students.

It is profitable on CAC even at an 88/400 = 22% gross margin, and I reckon the gross margin is higher.

BYJU’s covers both CAC and cost of delivery in its first purchase!

India has roughly 71 MM in coaching classes and ~250 MM students. BYJU’s needs to only sell 1% once to reach 1 Billon $

You now begin to see why it is such a clever business model, given the size of the market

While it’s a “subscription”, it is an annual purchase is a large ticket. Even if there is one purchase, BYJU is already profitable. If the customer does not renew, the market is big enough for new folks

The natural churn in the market i.e. students who graduate actually helps it. New customers keep coming in, and the market has little “memory” on product quality. Feedback on a “bad product” is fuzzy because the user (child) is not the customer (parent)

With details here ( Is BYJU’s Really an EdTech Company or Good Business?), BYJU’s is a terrific business, but will it change education?


Edtech platform BYJU’S raises new round from BOND

Shared by: Aviral Bhatnagar on LinkedIn

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