MUMBAI (NewsRise) -- Byju's, the Indian online tutorial provider, raised $540 million from South Africa's Naspers and Canadian state pension fund, as venture capitalists continue to bet on the nation's fast-growing startups.
"The company has aggressive plans for international market expansion and will make bold investments in technology that will help to further personalize learning for students," Byju's said in a statement.
The latest funding values the Bengaluru-based company at $3.8 billion, making it the most-valuable education technology company in the world. Investor interest in the sector has been surging over the past three years as more companies exploit the opportunities arising from the uneven quality of education in India, as well as the willingness of parents to spend heavily on their children's studies.
Byju's has in the past drawn interest from other investors such as China's Tencent Holdings, Chan Zuckerberg Initiative, which is Facebook founder Mark Zuckerberg's multi-billion-dollar philanthropy venture, and the World Bank's International Finance Corp., among others, who invested close to $800 million in various rounds of funding.
"India has the largest school-age population in the world and Indian households are willing to invest a lot in their children's education," said the company's Founder and Chief Executive Byju Raveendran, himself an engineer with a passion for teaching. "The importance of quality education amongst the entire population in India fueled our ability to create an engaging and high-impact learning app."
Launched in 2015, Byju's tutorials for school students and programs for those preparing for competitive exams that are accessed through a multimedia smartphone app have so far attracted 30 million users and more than two million annual paid subscribers.
"Most education companies are targeting students aiming to crack competitive exams, while Byju's offerings straddle the entire K-12 learning curriculum," said Satish Meena, an analyst at Forrester Research.
The latest investment also highlights investor interest in India's startups that have been able to create revenue-generating business models. Byju's, which has been doubling its revenue over the past three years, expects to triple it to 15 billion rupees ($209 million) this fiscal year.
"While near-term profitability is important for us, as a company, our main focus continues to be on long-term sustainable growth," Raveendran said.
The latest funding also underscores investors' focus on mature industry leaders amid hopes of extraordinary returns. In September, online lodging firm Oyo Hotels raised as much as $1 billion from a host of investors led by SoftBank Group at a reported $5 billion valuation.
Naspers made $2.2 billion from the sale of its stake in Flipkart Internet, when Walmart took over the Indian online retailer in May.
Earlier this year, billionaire Warren Buffett's Berkshire Hathaway made its first investment in India through a fund infusion into One97 Communications, which owns Paytm mobile payments app. In June, Swiggy raised $210 million from Naspers and Hong Kong-based fund DST Global in a deal that valued the food delivery company at $1 billion.
According to researcher CB Insights, the surge in funding in India over the past few years has been driven by companies valued at more than $1 billion.
The number of the so-called unicorns - start-ups valued at more than $1 billion --has steadily increased so far this year to 13 from nine in 2017, CB Insights said in a report last month. That number has more than tripled since 2014, it added.
--Dhanya Ann Thoppil