After Unacademy, BYJU’S Takes Plunge Into Celeb-Led Courses

India’s most-valued edtech startup BYJU’S is piloting celebrity-focused masterclasses through a new programme – BYJU’S XCEL – for class 4-10 students. The edtech decacorn, last valued at $23 Bn, started the pilot in May this year.

According to the startup, BYJU’S XCEL will be a year-long programme featuring topics related to science, technology, creativity, and life. The hour-long sessions will be live streamed where celebrities will converse with BYJU’S ‘star teacher’. 

The startup claims that some selected students will also be allowed to ask questions to the celebrity during the live session. Besides, there will also be live quizzes with prizes, fun do-it-yourself experiments that students can do at home, and exciting post-class contests. 

Though students will receive a summary document for their reference, they will not be provided with video recording of the session. BYJU’S has already held nine sessions, starting with former Indian cricketer VVS Laxman in May. Laxman, actress Parineeti Chopra, and cricketer Mithali Raj held masterclasses on topics such as winning mindset, becoming an all-rounder, and breaking boundaries. The edtech giant has lined up chess grandmaster Viswanathan Anand. 

Currently, these sessions are free for students. However, it is likely that the startups will charge a fee for them in the future. 

In an official statement to Inc42, BYJU’S said, “BYJU’S Xcel is a series of free live masterclasses focused on holistic learning to help students understand science and technology better and develop life skills. Xcel sessions are led by experts and notable achievers in their respective fields with the aim to equip students with practical knowledge.” 

It added that it has already covered topics like drones, animatronics, rocket science, sensors, and photography; and life-skill sessions on topics like developing an all-rounder attitude, breaking boundaries, and having a winning mindset in the sessions so far. 

However, the edtech giant declined to disclose who is leading BYJU’S XCEL team or its monetising plans. 

Tried & Tested

While this is a new programme for BYJU’S, the concept of celebrities giving lessons has been there for a long time. It was first popularised by San Francisco-based edtech startup MasterClass. Eponymous with its name, the startup provided lessons from celebrities such as Serena Williams, Gordon Ramsay, Natalie Portman, Lewis Hamilton, and Neil deGrasse Tyson, among others. 

MasterClass raised back-to-back funding harping on the offerings by these celebrities. It last raised $225 Mn in funding at a valuation of $2.75 Bn in 2021. Despite having raised over $400 Mn in total funding and being backed by marquee investors such as Fidelity Management and Research Company, Baillie Gifford, Balyasny Asset Management and Eldridge, the startup laid off around 120 or 20% of its employees this year, indicating that expenses were much higher than the revenue. 

Mumbai-based CelebritySchool brought the concept of celebrity-led classes to India first. However, post its Pre-Series A of funding in early 2021, the startup is yet to raise funds. As per Linkedin, the startup has only three employees working. 

Then there is LightSpeed-backed FrontRow in this space. After heavy cash burn and failing to secure a fresh round of funding, it had to undergo layoffs, which impacted 30% or 145 employees. 

Earlier this year, SoftBank-backed Unacademy also launched celebrity-taught classes through Unacademy Icons, and brought cricketer Sachin Tendulkar as the first celebrity. However, the startup since February has not held any other celebrity session after its maiden session with Tendulkar, indicating that it might have or plans to drop its plan to continue Unacademy Icons. 

Why Celebrity-Run Courses Failed To Pick Up Pace? 

While the concept of getting celebrities to host live lessons has been there for some time, the platforms have not been able to crack the code to make profit from it. It goes without saying that roping celebrities for a 20-minutes to 1-hour-long course requires heavy cash flow. 

For instance, MasterClass’ instructors (celebrities) receive somewhere close to $100K (INR 82 Lakh) upfront when they start working for the platform. Besides, they also receive 30% of the revenue generated from the session. 

While the details of the amount charged by celebrities in India are not known, it is likely to be a hefty amount. This begs the question if these programmes can generate revenue for the platforms or just add to their expenses. One of the major issues that these celebrities-focused startups face is selling the users other courses, after the users complete their respective sessions. 

Indian edtech startups are already witnessing a decline in usage. Extracurricular learning has also taken a back seat with the reopening of schools on the back of increasing vaccination coverage. Extracurricular activities startups such as Crejo.Fun, Udayy, and SuperLearn have already shut their operations in the past few months. 

Many startups offering celebrity classes are in trouble due to the high fees of celebrities and low subscription numbers.

Can BYJU’S Make A Mark?

While BYJU’S is offering the celebrity sessions for free, it is also distributing goodies to a few students attending the courses. While this can be brushed off as a typical marketing practice to pull in users, the fact is that the loss-making startup has not made a single penny from the nine sessions held so far and would have spent crores on them.

The edtech startup’s loss soared 20X to INR 4,588 Cr in FY21, led by a 144.5% rise in l expenses to INR 7,027.4 Cr, on the back of high marketing and acquisition costs. In an earlier interview, founder Byju Raveendran had put the blame for high expenses on WhiteHat Jr. 

The startup also spent INR 2,250 Cr on business promotions, almost a 150% jump from INR 899.3 Cr spent in FY20. This was almost 3X of the combined marketing expenses of three Indian edtech unicorns – upGrad, Unacademy, and Vedantu. 

At a time when the edtech decacorn is under heavy losses due to the businesses acquired by it and has no clear answers as to when the group would become profitable, the launch of this new programme, which is likely to increase cash burn, raises questions.

As such, it remains to be seen if BYJU’S XCEL can help the startup generate more revenue or end up becoming another cash-guzzling initiative.