Today, it’s announced that BYJU’S, one of the most-funded education technology companies in the world, is acquiring Osmo for $120 million, according to executives from both companies. This comes roughly a month after BYJU’S raised $540 million in a technology growth deal led by private equity firm Naspers, which valued the edtech company at about $3.64 billion, post-money.
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Osmo develops and launched its app and a suite of educational toys that interact with its software platform through the camera of an iPad or Kindle Fire tablet. Kids can learn basic problem solving and spatial reasoning with these toys and through the game-like interface of the application.
Prior to its acquisition, Osmo had raised $32.5 million in outside funding, the last of which arrived in a $18 million Series B round. Mattel, Accel, and Upfront Ventures, among others, are investors in Osmo. The company will continue operating as a separate brand of hardware and software products after the transaction is complete, according to a statement from the company. Osmo is Palo Alto-based and has about 60 employees.
Pramod Sharma, co-founder and CEO of Osmo, told Crunchbase News in a phone interview that the deal made strategic sense for both companies and kind of came by surprise.
Three months ago, Sharma said, Osmo had almost closed a new round of funding (for what would have been its Series C), when he met Byju Raveendran, co-founder and CEO of BYJU’S. Realizing they had similar backgrounds—both working in educational technology, both hailing from small villages in India—and complementary businesses, acquisition talks proceeded quickly. “We made the decision within a week,” according to Sharma.
“Platform-thinking is in our DNA,” said Sharma, who, alongside his co-founder Jerome Scholler, quit software engineering jobs at Google to start Osmo. According to Raveendran, BYJU’S had been focused on “building a content-driven platform” built around what he referred to as “the DNA of learning.” Add to that that Osmo already had traction in a market segment and geography BYJU’S wanted to expand, and you’ve got a corporate genetic match.
Raveendran said he’s known about Osmo’s product for awhile. BYJU’S had been working to develop and roll out content for a younger audience, aimed at kids between the ages of three and eight. Accordingly, Raveendran had a professional interest in tracking the market for young kids’ educational products, but he also had a personal reason: “I have a five year-old son, and he’s been playing with Osmo for the past eight months.”
Raveendran said that BYJU’S currently has “over 1,000 people” working on video content and game development.
“This makes us one of the biggest studios in India,” he said. Raveendran said his company is growing revenues by ten percent month-over-month. The application has 30 million registered students, two million of which pay for a subscription.
Osmo is the first U.S.-based company that BYJU’S has acquired, but it has made three acquisitions in the past. Prior investors in the education technology company include Sequoia Capital, Lightspeed Venture Partners, Tencent Holdings, and the Chan-Zuckerberg Initiative.
Illustration: Li-Anne Dias