Byju's Acquires Epic for $500 Million - US Expansion

Byju’s Acquires Epic for $500 Million, Expanding U.S. Presence

Byju’s announced on Wednesday the acquisition of Epic, a California-based reading platform, for a sum of $500 million. This move represents a significant step for India’s most highly valued startup as it strengthens its position within the U.S. market.

The transaction incorporates both monetary payment and stock options. Founders of Epic, Kevin Donahue and Suren Markosian, will maintain their leadership roles within the company, as revealed in an interview with TechCrunch.

Epic: A Leading Digital Reading Platform

Epic operates a digital reading platform designed for children aged 12 and under. The platform currently reaches 90% of elementary schools across the United States.

Epic has experienced substantial growth, now serving over 2 million teachers and 50 million children – a significant increase from the 20 million users reported last year.

The company gathers and analyzes anonymized data regarding children’s reading habits, including engagement levels and points of interest. Furthermore, Epic has begun releasing printed editions of its original content, mirroring a subscription-based model similar to Netflix.

The Path to Acquisition

Reports from TechCrunch in March indicated that Byju’s was considering acquiring Epic. Donahue and Markosian had initially connected with Byju Raveendran, co-founder and CEO of Byju’s, several years prior.

However, discussions regarding a potential acquisition only commenced earlier in the current year, according to their statements.

Raveendran shared that his own son’s use of the application solidified his interest in pursuing the acquisition opportunity.

Founders’ Vision and Future Plans

“Our initial goal, eight years ago, was to make books accessible to every child,” stated Markosian. “We believed technology could foster a love for reading and eliminate barriers between children and books.”

“Currently, we serve nearly every school in the U.S., reaching over 50 million children and facilitating the reading of a billion books,” he added.

Markosian explained that the desire to expand globally led them to seek a partner with shared values. They found this alignment with Byju’s, believing that together they can elevate Epic to new heights.

Strategic Importance for Byju’s

Raveendran emphasized that the acquisition expands Byju’s product range and provides valuable insights into a key U.S. demographic.

He noted that Epic’s offerings are “complementary” to Byju’s existing portfolio, as reading is a fundamental learning method for students.

The expanded distribution network will also enable Byju’s to reach a wider audience within the U.S. market.

Byju’s recently rebranded its international operations as Byju’s Future School, offering coding and math courses, with plans to incorporate music, English, fine arts, and science into its curriculum.

Raveendran indicated that a rebranding of Epic is not currently planned, acknowledging the strong brand recognition the company has established in the U.S.

With the launch of a Disney-themed learning app earlier this month, Byju’s now has three significant offerings in the U.S., each projected to generate $100 million in revenue this year.

The company intends to invest $1 billion in its North American business and plans to introduce Epic’s platform to India and other international markets.

Acquisitions and Investment Strategy

The acquisition of Epic is the latest in a series of strategic acquisitions made by Byju’s. Over the past two years, the company has acquired Osmo ($120 million), WhiteHat Jr. ($300 million), Aakash (nearly $1 billion), Toppr, and Gradeup.

Raveendran clarified that acquisitions are not pursued indiscriminately, highlighting the growth and success of previously acquired companies under their original leadership teams.

“Our focus is on long-term growth, and we collaborate with founders to accelerate their progress,” he stated, adding that Byju’s remains open to further M&A opportunities.

Having raised approximately $1.5 billion since the start of the pandemic, Byju’s has utilized these funds to acquire promising startups. While the company currently has no immediate plans for additional fundraising, Raveendran did not exclude the possibility of future capital raises.