Weeks after securing more than half-a-billion dollars in fresh capital, ed-tech unicorn Byju’s has acquired US-based digital learning platform Osmo for $120 million (Rs 840 crore at current exchange rates).
In a press note, the ed-tech firm stated that the deal, which also marks its maiden overseas acquisition, will help the company expand to international markets and will allow it to offer customised, engaging and fun learning solutions for younger kids.
Pramod Sharma, Osmo’s chief executive and co-founder and his core team, will continue to lead the firm's operations. Sharma had earlier told TechCrunch that the acquisition was an all-stock deal.
“With this acquisition, we are expanding into a new age demographic and entering the world of younger kids (age group 3-8). Our partnership with Osmo will help kids acquire love for learning at an early age by introducing play-based learning,” Byju’s founder Byju Raveendran said.
The Palo Alto-headquartered startup was founded in 2013 by former Google engineers Sharma and Jerome Scholler. The six-year-old company uses augmented reality and artificial intelligence to bring physical toys into the digital world. It claims to change the way children interact with iPads and iPhones by opening them up to hands-on play with AR-based games.
Run by Tangible Play Inc, Osmo had raised more $30 million in funding from investors including venture capital firm Accel.
“We started Osmo for parents looking for a way to combine physical, hands-on play with the power of digital platforms to foster a love of learning,” Sharma stated.
Think and Learn Pvt. Ltd, which runs Byju’s, had last month raised $540 million (Rs 3,855 crore) in a round led by South African technology conglomerate Naspers. The Bengaluru-based company had said at the time that it would use the fresh capital to expand its operations in international markets.
Canada Pension Plan Investment Board (CPPIB) contributed a significant portion of the massive funding round which saw the ed-tech firm’s valuation soar to around $3.8 billion.
Private equity firm General Atlantic, China’s Tencent, the Chan Zuckerberg Initiative (of Facebook founder Mark Zuckerberg), Belgian family office Verlinvest and the World Bank’s private sector arm, the International Finance Corporation, are among Byju’s other investors.
The Osmo deal marks Byju’s fifth known acquisition till date. Before this, it had bought math learning platform Math Adventures for an undisclosed sum in July last year.
In July 2017, it bought Pearson-owned Tutorvista and Edurite as part of a single deal. Six months before that, it had acquired Bengaluru-based learning guidance tool and student profile-builder Vidyartha for an undisclosed amount.
Byju's had previously announced plans to expand overseas by venturing into English-speaking territories and it had been scouting for distribution partners in the US, UK, Australia, Canada, Malaysia and Singapore.
Raveendran had repeatedly said that the company will look at acquisitions for growth in international markets, but later conceded that it could not find many good companies.
Founded in 2011, Byju’s runs learning apps for school students and produces all its content in-house. Byju's originally started off as a coaching platform for competitive entrance exams and for students studying in classes 6-12. Later, it launched content for students from classes 4 to 5 last year, helping them further accelerate their growth and then targeted an app for students in class 1-3.
The company is the best-funded and most valued Indian startup in the ed-tech segment.
Byju’s sharply narrowed its loss for the year through March 2018, as a two-fold jump in operating revenue offset a rise in expenses.
Think and Learn Pvt. Ltd reported net sales of Rs 471.18 crore for 2017-18, up from Rs 230.22 crore the previous year.
The company's net loss reduced by almost half to Rs 37.15 crore from Rs 61.23 crore. This was despite an increase in total expenses to Rs 537.38 crore from Rs 309.38 crore.
Mrinal Mohit, chief operating officer at Byju's, had recently told TechCircle that the company was on track to triple its revenue for 2018-19 to Rs 1,400 crore. Currently, the app has 30 million downloads and 2 million paid users.