Articles

Editor’s Picks

Industry News

BYJU’S Delivers on Plans to Expand With Acquisition of U.S. Edtech Company

By Cait Etherington
January 16, 2019

In December, BYJU’S, one of India’s largest tech companies, announced that it had secured $540 million in a private equity funding round. With over half a billion additional dollars on hand, BYJU’S now seemed positioned to expand globally and likely to do so through one or more strategic acquisitions. As BYJU’S founder and CEO, Byju Raveendran, told TechCrunch in December, the company had, in fact, already spent much of the past year scouting for “core product acquisitions.” It didn’t take long for Raveendran to move beyond window shopping. On January 15th, BYJU’S announced that it had purchased the U.S.-based Osmo for $120 million.

Osmo Was Already Primed for Growth

Osmo, an edtech company based in Palo Alto, California, is best known for its child-friendly AR games for the iPhone and iPad. Last April, Osmo’s co-founder Pranod Sharma told Venture Beat that his company was at a critical point in its development:

“We’re in a transition phase this year and late last year, in terms of the messaging and other things, becoming a mass brand. It’s an interesting time. Four or five years ago, when the iPhone and iPad became very prevalent in children’s lives, there was a big question around what could happen. Now that’s been answered. You can deliver some interesting stuff. Now the main question is, how do you build an amazing business out of it? We’re going from startup to early adopter to building a real business in the long term. That’s what’s happening at Osmo.”

Last April, Sharma was specifically focused on attracting new partners, including known children’s brands from Sesame Street to Hot Wheels. As Sharma explained:

“One of the major shifts, we’re going from first party content to really trying to work with partners. What we learned last year, especially after we launched Hot Wheels, is that there’s so much other content that exists in the market that can be pulled into the Osmo platform. This year one big thing we’re working on is essentially licensing our technology to partners and letting them build products around it. That’s going to be a big part of how we can scale as a company.”

Last April, Sharma didn’t indicate there were any plans to sell Osmo, which currently has raised $32.5 million in funding and has 60 employees. A January 16th article on Crunchbase News describes how the BYJU’S acquisition occurred quickly. According to Sharma, his company had nearly closed a Series C round when he met Raveendran last fall.

As Sharma told Crunchbase, he  “made the decision [to sell] within a week.” If one week seems like a short time to sell a company, it may have something to do with Sharma and Raveendran’s affinities. Both Sharma and Raveendran work in the edtech sector and both happen to hail from small villages in India. Also, Sharma won’t be leaving Osmo behind. The company will continue operating as a stand-alone brand, at least for now, with Sharma playing a lead role.

BYJU’S Has Much to Gain from the Osmo Acquisition

As Raveendran made clear in late 2018, he planned to use much of BYJU’S new funding to offer more English courses on the platform and push into English-language markets worldwide. With the acquisition of Osmo, it’s clear that BYJU’S will certainly have an easier time getting a toehold in both areas. But this isn’t the only thing that Osmo will bring to the company. Recently, BYJU’S has also expressed interest in offering more products to very young learners (ages 3 to 7), and this is precisely Osmo’s target market. Finally, since Osmo will continue to operate as a separate brand based in Silicon Valley, BYJU’S will also get something else it has likely been eager to acquire: an office in North America.

Photo by Kelly Sikkema on Unsplash.