BYJU'S makes a $600M bet on the skilling segment with its Great Learning acquisition
Bengaluru-based edtech unicorn BYJU'S has confirmed the acquisition of bootstrapped skilling startup Great Learning for $600 million comprising cash, stock, and earnout.
The unicorn stated it has earmarked a further $400 million of investment into this segment towards accelerating Great Learning’s growth. It added that this acquisition marks BYJU'S push into the upskilling and life-long learning space globally.
The edtech unicorn has committed $1 billion towards expanding its offerings beyond the K-12 and test prep segments.
Great Learning core team
Great Learning will continue to operate as an independent unit under the BYJU’S group under the leadership of Founder and CEO Mohan Lakhamraju and Co-founders Hari Nair and Arjun Nair.
With this substantial investment, Great Learning will accelerate organic and inorganic growth in India and across global markets and expand its high-quality, transformational offerings to learners everywhere.
Speaking of the acquisition in a conversation with YourStory, Byju Raveendran, Founder and CEO, BYJU’S, said,
"Learning, unlearning, and relearning is an important skill, and while we have been growing in the K-12 and test prep segment, we saw this as the third big opportunity. In our strategic path, we have always built where we have the expertise, but we also know what we don't know. In areas where we don't have expertise, we have looked at exceptional entrepreneurs, teams, products, and taken the acquisition route."
He added that Great Learning is a globally recognised and reputed professional education company, and "this partnership expands our reach into this new segment" as upskilling has become extremely important in today's world.
The importance of upskilling
Byju said he always felt education goes beyond school and college degrees.
"Upskilling is extremely important; we have seen that with the pandemic. Education and technology are still in early days, I think it is the last segment that technology is making a positive intervention in; there is scope to change the way students learn," Byju said.
Great Learning, which was founded in 2013, crossed a revenue run rate of $100 million in FY21. The company concluded FY20 with booked revenue of Rs 325 crores, and a growth of close to 150 percent as compared to FY19. The company's user base has also grown ten-fold in FY21, and has learners from over 170 countries.
Mohan Lakhamraju, Founder and CEO of Great Learning, said the upskilling startup has always focused on learning, the quality of learning, and learners.
"That has been our first priority. We have focused on quality at the expense of growth. It is one of the reasons we chose to remain bootstrapped, as when you get investors there is sometimes a conflict between growth and quality. We had many offers when we were looking to raise funds to operate at a global scale, but we saw an an overlap of long-term focus, values, and thinking with BYJU'S; we saw a better fit," he said.
What do the employees get?
Mohan said Great Learning employees will see a value of $100 million across board. He said more than 120 people have ESOPs in the company, and many others will see more rewards in the next three to five years.
"One of the advantages of being a bootstrapped organisation is that your stake can be divided with employees. Close to 25 percent of the company is owned by our employees. They have built the company so far, and have had to work hard, make sacrifices. We have had a stable team, and not a single person from the top four levels has left the team. It is now our time to give back to our employees," he said.
Team Great Learning
How will the integration work?
As Great Learning is bootstrapped startup and BYJU'S a funded organisation, integration of the two will be key.
Byju said they believed that integrating platforms is easy, "integrating teams and people is a challenge".
"We make sure, that each of teams, founders, and management operate independently. That is why all the integrations have been successful. We give a lot of outside support. We never change the culture of the teams or the organisations. If we try to change the culture and teams, it causes friction. Teams are largely retained. In the case of Great Learning, there is no single job loss; these are complimentary skillsets and teams," he said.
Byju said integration is about finding synergies and learning from each other. "If people continue, the culture continues. We never make the teams play in our style; if we did that, winning would be impossible."
Mohan said this isn't about execution of the business, as the team has been doing it for over eight years now; it is about "working on weaknesses and learning from one another".
This is the third confirmed acquisition by the edtech giant this year. Last week, the company had announced the acquisition of US-based digital reading startup Epic for $500 million. Prior to that, it had acquired Aakash Educational Services for $900 million.