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• Byju’s, has attracted more than 500,000 subscribers for its interactive online courses, aimed at children aged 10 to 18, with a mixture of video lessons and game-based practice.
• “For the next generation, learning from a screen is a primary habit,” says Mr Raveendran, after demonstrating one of his colourful learning games on a tablet
• Raised more than $200m from investors including US venture capital firm Sequoia Capital and China’s Tencent, which invested at a valuation of about $800m in July
• Most prominent of a wave of Indian companies in the booming market.

Simon Mundy in Bangalore and Amy Kazmin in New Delhi December 3, 2017 3 Byju Raveendran smiles proudly as he shows off a video of his biggest ever live performance, when 24,000 young Indians crammed into New Delhi’s Indira Gandhi Stadium to hear his tips on high school maths. The young tutor’s star status reflects the huge importance attached to educational qualifications in India, where millions of high-schoolers compete for a limited number of places in well-known colleges that are seen as virtual guarantees of well-paid employment. But these days, Mr Raveendran is sparing little time for live sessions to focus on his core business: educational technology.

Since 2011, his company, Byju’s, has attracted more than 500,000 subscribers for its interactive online courses, aimed at children aged 10 to 18, with a mixture of video lessons and game-based practice. “For the next generation, learning from a screen is a primary habit,” says Mr Raveendran, after demonstrating one of his colourful learning games on a tablet. Byju’s – which has raised more than $200m from investors including US venture capital firm Sequoia Capital and China’s Tencent, which invested at a valuation of about $800m in July – is the most prominent of a wave of Indian companies in the booming market.

A report in May by KPMG and Google estimated that the country’s online education market generated sales of $247m last year, and predicted that this figure would grow to $1.96bn by 2021. While much of the current market is made up of professional training software, the report predicted that providers of primary and secondary “supplemental education” would become the biggest segment with sales of $773m.

A key driver, it said, would be burgeoning demand in mid-sized cities, where parents view their children’s success in school exams as a critical step towards upward mobility. “Only a quarter of our users are from the top ten cities. Students in smaller towns are even more aspirational, because they know the only way to make it is through education,” says Mr Raveendran, who grew up in a small south Indian village and learned English by listening to cricket commentary. In a room at the company’s Bangalore headquarters, dozens of employees are creating learning materials that range in sophistication from talking animated numerals for early maths students, to three-dimensional models of chloroplasts for high-school biology tutorials.

The slickly produced videos are driving demand for Byju’s offerings, with prices for a one-year course starting at Rs23,000 ($355) — nearly a fifth of India’s per capita gross domestic product. While the frugality of Indian consumers has been a headache for other internet companies, Mr Raveendran argues that digital education is viewed differently by parents already investing heavily in private schooling or tuition. For some Indian ed-tech companies, foreign markets have been more lucrative. Altaf Rehmani founded TinyTapps in 2015 to produce a suite of apps aimed at children under the age of six.

Its biggest markets have been the US and the UK, but Mr Rehmani hopes to capture more of the attention of domestic customers. “If you can prove that the product sells well outside India, then Indians will be more willing to buy,” Mr Rehmani says. “People in India are very brand-conscious.” Recommended Virtual tutors help India fill education and skills gaps India’s ‘islands of excellence’ distract from gaps in basic learning Foreign investors give Indian tech start-ups a boost Many lower-income Indian parents are faced with the more fundamental challenge of securing a basic education for their children, with public schooling undermined by overcrowded classrooms and undertrained teachers.

In 2016, only 43 per cent of Indian third-grade students were able to read a text designed for first-graders, according to educational charity Pratham. “Parents in any country have an outsized influence on a child during early childhood, and in India there are over 150m women who are illiterate,” says Sneha Sheth, co-founder of Dost Education, a non-profit organisation. Yet many illiterate Indians use mobile phones, and even the basic call function can be a powerful technological tool for education in poor households, Dost says. For Rs200, Hindi-speaking parents can call up daily to access Dost’s six-month audio course which guides them through simple exercises to support the mental development of small children, such as comparing the sizes of household objects.

But while most ed-tech enterprises in India are currently focusing on winning business from students and their families, some of the biggest opportunities will come from getting technology into schools, says Prachi Jain Windlass, a director at the Michael & Susan Dell Foundation, which has invested in several Indian ed-tech companies. Among them is ConveGenius, a producer of tablet devices loaded with learning materials in one of five Indian languages that are being used in schools on a trial basis.

ConveGenius has been overhauling its product since commissioning third-party research indicating that it made less impact on stronger students than on weaker ones, says founder Jairaj Bhattacharya. Such deep research is increasingly expected of entrepreneurs in this field, who face growing pressure from investors to demonstrate the efficacy of their technology in improving student performance, Ms Windlass says. “Before, technology was an end in itself,” she adds. “The assumption was that because kids find digital content engaging and entertaining and that they are watching, they are learning. That has changed.”

Source:https://www.ft.com/content/3e196c42-bd35-11e7-b8a3-38a6e068f464