Since India enforced a lockdown across the country in late March, shutting schools and other public places, Bangalore-headquartered startup Byju’s has emerged as one of the quintessential platforms for school-going students in the world’s second largest internet market.

It took the startup about four and a half years to amass 40 million students. Since the lockdown, its user base has ballooned to 65 million, its co-founder and chief executive Byju Raveendran said at Disrupt 2020 conference Tuesday.

Students say they were attracted to Byju’s platform because of the way it taught them subjects. Byju, who is a teacher himself, found intuitive ways like using real-life objects such as a pizza to teach complex math problems.

Today, his startup is valued at nearly $11 billion (which makes it India’s second most valuable startup), and has presence across several international markets. Late last year, Byju’s announced it has also turned profitable. It’s not everyday that we see an Indian startup with any of these three characteristics — let alone all three in one.

In a wide-ranging interview at Disrupt 2020, Raveendran shared the journey of Byju’s, which started as an offline platform that taught students at classrooms, auditoriums, and stadiums; the startup’s plans for further expansion in international markets; his views on merger and acquisition opportunities; and how the coronavirus pandemic has affected his business and the education landscape at large in India, among a number of other things.

“Unfortunately it took a pandemic for most stakeholders to try out digital learning. Parents are now accepting the online segment more than before. This sector is clearly at an inflexion point,” said Raveendran.

To make online learning more accessible to students, Byju’s made all of its offerings free during the pandemic. But the platform’s paying subscribers, now at more than 4 million, remains on a steady path of growth, he said.

The startup expects to generate more than $1 billion in revenue this year from India itself and take home profits between $150 million to $180 million, he said.

“I would still call it a relative success. What we consider as the target audience, we have less than 4% of penetration in that segment,” he said. “More than one-third of school-going students don’t have a smartphone. There’s still a lot of catch up to do.”

Another phenomenon that the pandemic has kickstarted in India is some consolidation in the edtech startup space. Byju’s itself acquired WhiteHat Jr., an 18-month-old startup that teaches coding skills to students, for $300 million.

TechCrunch has reported that the startup is engaging with several more startups including Indian firm Doubtnut, which through its app allows students to take a picture of a math problem and delivers step-by-step solution.

Here’s what Byju’s had to say about that: “The long-term potential of the sector is at an all-time high. […] We are looking for companies that can add strong product components to either our existing userbase or potential new customers in new markets, or companies that can give us some kind of distribution so that we get a headstart to launch in a new market — especially English speaking markets.”

“You will hear of a few more acquisitions from us. We are exploring some of them very seriously,” he added. The future acquisitions will again be all-cash deals, Byju said, as he “values equity more than others.”

On IPO, fundraise, and international expansion

Byju’s isn’t looking to go public for at least two years, the chief executive said. “We have strong business fundamentals; we have been able to find the right balance between high-growth and sustainable growth and created a very profitable model in such a short period of time. But we have not seriously thought about the public listing,” he added.

And it appears that investors in Byju’s are also not in a hurry. “We don’t need to do public listing to give exit to some of the early investors because the business itself will generate enough cash. A good number of them have already taken the money they invested out in the last few rounds,” he said.

Byju’s has raised more than $700 million this year. We asked Byju why is the startup raising capital. “We have been very capital efficient in terms of how we have used the primary capital we have raised. In the first five years, we have utilized less than $350 million of the primary capital — which shows how we have efficiently scaled the model,” he said.

“Most of the recent fundraising is to finance inorganic growth like full-cash acquisitions. We are utilizing it to add some strong business models. We never raised money because we needed it. It was always to add the right partner. In recent times, we have added long-term, patient investors,” he said. Byju’s is likely not done with its fundraising spree yet as the startup is currently engaging with at least two more investment firms.

For expansion in international markets, Byju said it plans to launch a digital learning app aimed at kids in several English-speaking markets. He said WhiteHat Jr., will introduce math subject to its offering to serve customers in several markets including Australia, New Zealand.

We also talked about what he thinks of other giant startups in India that are not profitable today, the kind of message that sends to international investors, and whether there is room for any new player in the education market in India, and much more. You can watch the full-interview below.