The Covid-19 pandemic helped edtech company Byju’s to become a decacorn and cross $10.5 billion valuation after raising new funding of less than $100 million from Silicon Valley investor and analyst Mary Meeker's Bond Capital. Byju's is rapidly narrowing the gap to become the most valuable startup in the country after digital payments firms Paytm, which is valued at around $16 billion. It has overtaken budget hospitality company Oyo, which was last valued at $10 billion. Before that, in January it replaced ride-hailing firm Ola as the third-largest unicorn after a funding round from Tiger Global Management, where its valuation crossed $8 billion.

According to analysts and industry insiders, the Bengaluru-based firm clinched the new deal after showcasing to the US investors, the increase in the number of new students joining their online platform and the existing students spending more hours on online education at home due to the restrictions caused by the coronavirus outbreak. Byju’s which became a unicorn in 2018 (a company valued at over $1 billion) has taken just two years to become a decacorn (a firm valued at over $10 billion).

“Byju's attaining decacorn status has come on the back of strong growth in online learning space in the recent past and more so recently with the restrictions imposed by the Covid-19 pandemic,” said Salman Waris, managing partner at TechLegis Advocates & Solicitors. “With schools across India remaining shut for the past three months, Byju’s growth like many other players in the ed-tech space has been further boosted,” he said.

In response to schools being shut down due to Covid-19, Byju's made content on its learning app free for all students. It also introduced live classes to further student engagement. This probably got Byju’s a new wave of users enabling it to add further 13.5 million consumers in March and April, according to analysts.

“This crisis has brought online learning to the forefront and has helped parents, teachers and students alike to experience and understand the value of it,” said Byju Raveendran, founder and CEO of Byju’s. He said that the ‘Classrooms of Tomorrow’ would have technology at the core, empowering students to cross over from passive to active learning. The result would be a combination of the best of both online and offline educational offerings.

In the past year, Byju’s has already seen huge growth and now has over 57 million registered students, more than 3.5 million paid subscribers and annual renewal rates as high as 85 per cent. Byju’s doubled its revenue from Rs 1430 crore to Rs 2800 crore in FY 19-20.

Experts said at a time when India is fighting the coronavirus pandemic, much of the country’s $180 billion education sector is going online to adapt to the new reality, throwing opportunities for edtech players including Byju’s. Many educational institutions are creating virtual learning infrastructure and radically transforming the way education has been offered for millennia.

Ankur Pahwa, partner and national leader, e-commerce and consumer internet at consultancy EY India, said,"Overall, edtech is a sunshine sector and players in the space are bearing the fruit of higher valuations." He said that this was backed by increased user base, paid subscriptions, increased daily active users (DAU) and monthly active users (MAU) innovative technologies.

“The pandemic has taught us the need for education to go digital. Also, the economics of the segment are favourable once there is scale, and the need to educate and skill oneself is not restricted to students alone but also young professionals,” said Pahwa. “The cumulation of circumstances has led to strong tailwinds for the segment itself. With digital learning taking centre stage in schools and corporates alike, the uptake of users and subscribers is expected to be exponential,” Pahwa said.

In February, social networking giant Facebook and US private equity firm General Atlantic, participated in a $110 million investment round in edtech firm Unacademy at a post-money valuation of $510 million.

There are now over 470 unicorn companies globally with a total cumulative valuation of about $1,409 billion, according to research firm CB Insights. Variants include a decacorn, valued at over $10 billion, and a hectocorn, valued at over $100 billion. Byju’s has now joined the league of 24 decacorns such as TikTok-owner Bytedance, Elon Musk's SpaceX and Chinese ride-hailing giant Didi Chuxing.

Analysts said Bond Capital was best known for having backed top tech companies, including Uber, Twitter, Spotify, Facebook and Airbnb and the venture capital firm would help Byju’s to tap global markets. “They have a very nice international playing field now,” said a person with knowledge about Byju’s strategy.

Last year the company acquired Osmo, a Palo Alto-based maker of educational games, for $120 million that helped it to propel its global launch efforts. In India Byju’s, through its app, offers learning programs for students in classes K-12 and competitive exams like JEE, NEET and IAS. With an average time of 71 minutes being spent by a student on the app every day from over 1700 cities, the app is creating a whole new way of learning through visual lessons, live classes by Byju’s teachers and is encouraging students to become self-initiated learners. The company had also launched Disney Byju’s' ‘early learn app’ for students in classes K-3 featuring Disney’s timeliness characters.