EXHIBITS

EXHIBIT 1

India U.S
Population, 2015 (billion) 1.3 0.3
2013 enrollment in pre-primary education (million) 7.4 8.7
2013 enrollment in primary education (million) 141.0 24.4
2013 enrollment in secondary education (million) 119.4 24.1
2013 Total enrollment (million) 267.8 57.2

Exhibit 2: India Analysis

2016 2017 2018 2019 2020

Total numeber of students 267.8 270.8 273.9 277.0 280.1
Currently using BYJU 7 8.05 9.2575 10.64613 12.24304
Paid users a 0.3 0.345 0.397 0.456 0.525
Pre primary total 7.4 7.484 7.568 7.654 7.740
Primary total 141 142.593 144.205 145.834 147.482
Secondary total 119.4 120.749 122.114 123.494 124.889
Paid users of pre primary 0.008 0.010 0.011 0.013 0.014
Paid users of primary 0.158 0.182 0.209 0.240 0.276
Paid users of secondary 0.134 0.154 0.177 0.203 0.234
Revenue from Pre primary 1.243 1.430 1.644 1.891 2.175
Revenue from Primary 23.693 27.247 31.334 36.034 41.439
Revenue from secondary 20.063 23.073 26.534 30.514 35.091
Total revenue calculated 45.000 51.750 59.513 68.439 78.705
Costs incurred
Development of product 39 0 0 0 0
Acquisition cost b 0.750 0.113 0.129 0.149 0.171
Marketing expenditure c 6 7.200 8.640 10.368 12.442
Employee benefits d 8.929 10.71429 12.85714 15.42857 18.51429
Total costs e 54.679 18.027 21.627 25.945 31.127
Profit -9.679 33.723 37.886 42.494 47.578
a – 15% annual growth
b – Assumption staff increase of 5% yoy
c - 20% increase in marketing expenditure yoy
d – https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/profits-next-year-says-
e – Marketing expenditure assumed to be 0.5 per month million in 2016

Exhibit 3: US Key-players (2016 figures)

 Key Players in Subscription Cost annual approx. (in Subscribers (in
US (in $) $) millions) Share of Population
BYJU'S 10-20 per month 180
Age of Learning 100 annually 100 1 0.33%
Khan Acdemy free 0 21 6.95%
Edmodo - - 60 19.86%
Class Dojo - - 35 11.59%
Remind - - 30 9.93%
Total 48.66%

Exhibit 4: US Analysis (in million)

2018 2019 2020

Population 306.405 308.5805 310.7714
Competitor's Market Share 48.66% 49% 50%
Remaining market share 51.34% 51.00% 50.00%
BYJU'S Share a 3.06405 3.085805 3.107714
Revenue anually 551.529 555.4449 559.3885
Development Cost 39.375 0 0
Digital Campaign Cost b 2.79018 5.580357 11.16071
Employee Cost c 2.79018 2.790179 2.790179
Acquisition Cost d 7.5525 0.054387 0.054773
Profit 499.021 547.0199 545.3828
a – BYJU to tap 1% of the remaining population and eat away 1% of each competitor share
b – Marketing expenditure to double each year
c – Assumption= 25% incremental of the original employees and at 25% increase in cost
d -15% increase in subscriptions yoy

FINANCIAL ANALYSIS

The analysis is divided into 2 demographics, that of India and United States. Considering the huge
untapped market among the tier 2 and tier 3 cities and some of tier-1 cities, the increasing awareness
and willingness among students and parents for BYJU’S and taking various other factors into account
into the calculations in Exhibit 2, BYJU’S has a potential to earn future revenues upto $68.439 million in
2019 with profits of $42.494 million. The numerical estimates give a lucrative picture for investing in
BYJU’S considering their future venture into India markets.

Going by the data in Exhibit 4, the US market however provides a more profitable opportunity starting
from 2018, with revenues reaching upto $560 million by 2020 with profits of $545 million. There is a
known fact that US has other major players with possibly better business models than BYJU’S, some of
them providing even free education. But given the credibility of BYJU’S freemium model with its
effective product and marketing reach, BYJU’S would have a potential to eat away a proportion of
market share from the competitors and capitalize the rest, investment into BYJU’S seems a good option.

EXECUTIVE SUMMARY

BYJU’s has emerged as the leading education-technology startup in India. Started as a coaching
center for competitive examinations, it has now forayed into K12 segment. After the launch of
the app in 2015, the revenue and number of subscribers has substantially increased over time. It
is now pondering over the decision of expanding its user base to US. Thus, BYJU’s has to decide
whether it should continue expanding in India or should also expand to US.

Through thorough analysis of both India and US future market potentials and BYJU’S option of
scaling up its operations in India as well as tapping into the US markets, it is a good option to
invest into BYJU’S.

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