Byju's to Acquire Epic: Education Tech News

Byju’s Considering Acquisition to Expand U.S. Presence

Byju’s, a leading e-learning company originating from India, is reportedly exploring the possibility of acquiring a startup to strengthen its position within the United States market.

Potential Acquisition of Epic

Discussions are underway regarding the acquisition of Epic, an online reading platform. This platform provides unlimited access to a vast library of over 40,000 books, videos, and quizzes for children aged 12 and under, sourced from more than 250 publishers. This information was shared by two sources with knowledge of the negotiations, as reported by TechCrunch.

The estimated valuation of Epic exceeds $300 million “significantly,” according to one source. However, it’s important to note that the specifics of the deal are subject to change, and the acquisition isn’t guaranteed to be finalized.

As of Monday evening, a spokesperson for Epic declined to provide any comments. Byju’s has also not yet responded to requests for comment regarding this potential acquisition as of Tuesday.

Epic’s Growth and Reach

Epic, which receives backing from Evolution Media, currently reaches over 50 million children across the U.S. This represents substantial growth from the 20 million users reported just last year.

The California-based startup has secured over $51 million in funding to date. A press release issued last year indicated that more than 1 million teachers, representing over 90% of U.S. elementary schools, utilize Epic in their classrooms.

Founded by Suren Markosian and Kevin Donahue, Epic facilitated the reading of over a billion books by children in the past year.

Data Analytics and Expansion: Epic leverages real-time, anonymized data to analyze reading habits, engagement levels, and emerging interests among young readers. Mirroring a strategy similar to Netflix, the company intends to launch print editions of its original titles at major retailers like Walmart, Target, and Sam’s Club later this year.

Strategic Alignment with Byju’s

Should the acquisition proceed, Epic’s offerings would complement Byju’s existing strategy within the U.S. market. In 2019, Byju’s acquired Osmo, a U.S.-based company specializing in “blended learning” apps that combine digital and offline activities for children aged five to twelve.

Funding and Valuation

Byju’s is currently finalizing a new funding round anticipated to exceed $600 million. Recent reports from TechCrunch suggest this round could value Byju’s at $15 billion.

A significant portion of this new funding, approximately $460 million at a $13 billion valuation, has already been secured, as indicated in a recent filing. These funds are intended to support the potential acquisition of Epic.

Growth Driven by Pandemic

The Indian company, which caters to students preparing for undergraduate and graduate-level studies, has experienced considerable growth during the pandemic. This surge is attributed to extended school closures and lockdowns implemented in New Delhi.

As India’s second-most-valuable startup, serving over 80 million users, Byju’s is actively pursuing both organic and inorganic growth strategies.

Previous Acquisitions and Ongoing Due Diligence

Byju’s previously acquired WhiteHat Jr., a coding platform for children, for $300 million last year. Currently, the company is conducting due diligence on Aakash, a long-standing Indian brick-and-mortar educational institute, and Toppr, another online learning startup within the world’s second-largest internet market.

The funds raised last year, exceeding $1 billion, are financing these potential acquisitions.

WhiteHat Jr., which faced controversy following a lawsuit filed against critics last year, currently generates nearly half of its revenue from the U.S. market.