Institue of Management, Nirma University

Individual Assignment- 1

Mergers and Acquisitions

Deal- BYJU’s acquiring WhitejarJr

Submitted to- Prof. Rajesh Kikani

Submitted on- 10th October 2020

Submitted by- Yash Shah

Rollno- 167162
Deal- BYJU’s acquiring WhitejarJr

Deal size- $300 Million

Company Overview-
Acquirer: BYJU’S-

BYJU’S - The Learning App is an Indian educational technology and online tutoring
firm founded in 2011 by Byju Raveendran at Bangalore. In September 2020, it was
the world's most valued edtech company with a valuation of $11.1 billion.

Acquired: WhiteHat Jr 

WhiteHat Jr is a Mumbai based Edtech start-up by Karan Bajaj that focuses on
teaching coding to young kids. The online platform is made for children (ages 6 to
18) learn programming and are then encouraged to create games, animations and
applications.
BYJU’s interest on acquiring WhiteHat Jr 

With this acquisition, BYJU’S aims to expand its product offerings, and widen its
base in India, as well as the US where WhiteHatJr already company, founded in
2011 by Byju Raveendran and Divya Gokulnath, launched its platform in 2015, and
now boasts of 64 Mn students cumulatively learning from the app, 4.2 Mn annual
paid subscriptions and an annual renewal rate of 85%. has a presence. BYJU’S will
also make investments in WhiteHatJr’s technology platform, product innovation while
expanding the teacher base to cater to demand from new markets. 

BYJU’S is a significant player in India’s burgeoning edtech space catering to learning

needs by offering online lessons to school-going students, as well as comprehensive
courses for competitive exam preparation. With the WhiteHatJr acquisition, BYJU’S
will gain access to seven lakh registered users on the platform, benefiting from
around 7,000 online classes every day. By teaching the fundamentals of
coding, WhiteHatJr helps children aged 6-14 build commercial-ready games,
animations and apps online. According to the company’s founder Karan Bajaj,
inculcating coding in schools’ curriculum could further an active paradigm of learning
instead of the passive one prevalent in India. 

WhiteHatJr recently announced plans to expand to other global markets like Canada,
UK, Australia and New Zealand after witnessing growth in the US for its one-to-one
online coding classes. After launching their courses in the US, since February this
year, the company claims to be growing at more than 100% MoM in the country. 

WhiteHatJr’s interest in the deal

WhiteHatJr, last raised capital in late 2019 from Silicon Valley-based investor Owl
Ventures, Omidyar Network and Nexus Venture Partners, has till date raised a little
over $11 million across its seed and Series A rounds. Its acquisition will help its
investors take a very strong exit.

For Mr. Bajaj’s 40% stake in company, he is likely to get around 900 crores for this
deal which is significantly vary much higher for a company that has established just 2
years ago.
Valuation and Deal structure-

In 2018, when Karan Bajaj was at the helm of American broadcaster Discovery Inc’s
South Asia operations, he came up with what was at the time a somewhat offbeat
idea for this market of teaching kids to code online. He roughly took together a pitch
deck and sent a cold email to Anup Gupta, a partner at venture capital firm Nexus
Venture Partners. Gupta responded overnight to that mail.

In November 2018, when Bajaj was serving out his notice period at Discovery,
Nexus committed to leading a $1.3 million seed investment round in Whitehat
Education Technology. At the time, the Mumbai-based startup, incorporated in
October 2018, was valued at $6 million. 

Just in 18 months of its incorporation, Bengaluru headquartered online learning

platform Byju’s acquired Whitehat Jr in a $300 million all cash deal. 

Nexus and Omidyar, which came in as part of the $1.3 million seed round, stand to
score a 14X return on their original investments, The two investors also participated
in Whitehat Jr’s $10 million Series A round in September last year which was led by
San Francisco Bay Area based venture capital firm Owl Ventures. Owl Ventures
made a 10X return on its investment when the deal got completed.
The deal Advsior

DC Advisory (DC), led by Nitin Bhatia and Gaurav Mittal, acted as the exclusive
financial advisor to WhiteHat Jr on its sale to Byju's for USD 300m. Leveraging DC’s
global platform, investors from around the world were approached to ensure the right
partner was chosen and the most favourable outcome was achieved for WhiteHat Jr.

The transaction was completed entirely virtually and is the largest M&A transaction in
the Indian EdTech space to date. It is also the second marquee EdTech transaction
for DC Advisory's India team in the last 12 months.

The transaction is expected to create a market leading presence for Byju's in the
online coding industry and instructor-led live teaching platform. Mr Karan Bajaj,
Founder of WhiteHat Jr, will continue to lead the online coding and live instruction
business for Byju's.

Public Statements by buyer and seller-

“Even though students might not take up coding as a career option, it eventually
helps them become active learners. Most of the changes in our traditional school
curriculum in the last few decades were focused on passive learning methods, but
we believe that the future of learning must be based on active learning methods,”

 –WhiteHatJr’s official statement.

“The WhiteHatJr course format is very different from our current course format and
offers live one-on-one classes, and there is a huge opportunity to scale this product
not just in India, but in foreign markets as well. As part of our international expansion
plans, we will be able to scale our offerings to new countries with the acquisition,”

- BYJU’s official statement

Both the parties believe that after introduction of new guidelines of course by Indian
government, the future of online coding learning platform is very much significant
and it will have active users as well along with passive users. They also believe, the
students who do not wish to opt coding as a career option also will learn significantly
from this platform.
Post acquisition-
Post acquisition, Byju's plans to make significant investments in coding startup
WhiteHat Jr’s technology platform and product innovation while expanding the
teacher base to cater to demand from new markets.

This acquisition is expected to help BYJU's with its plans to expand further into the
US market. The BYJU’s is also looking to provide coding programs for kids, which is
an area of expertise for WhiteHat Jr. WhiteHat Jr. Founder Karan Bajaj will continue
to lead and scale the business in India and the US.

According to me, this was a win-win for both the parties as the deal amount was
considered looking forward to future market. For BYJU’s it is a high risk high return
model of acquisition while for WhitehatJr. They have eliminated the risk factor and
got a huge amount for the deal. By this, BYJU’s who was already a market leader in
its segment got a chance to expand its services and increase its customer base.
References-

1. https://yourstory.com/2020/08/byjus-acquires-coding-startup-
whitehat-jr-300-mn
2. https://www.dcadvisory.com/news-deals-insights/deal-
announcements/dc-advisory-acts-as-exclusive-financial-
advisor-to-whitehat-jr-on-its-sale-to-byju-s/#:~:text=DC
%20Advisory%20(DC)%2C%20led,to%20Byju's%20for%20USD
%20300m.&text=The%20transaction%20is%20expected
%20to,instructor%2Dled%20live%20teaching%20platform.
3. https://www.techcircle.in/2020/08/12/whitehat-jr-s-18-month-
sprint-from-a-valuation-of-6-mn-to-300-mn
4. https://inc42.com/buzz/how-byjus-is-leveraging-acquisitions-
to-build-an-edtech-empire/