Byju's buys US-based educational games maker Osmo for $120 million

Less than a month after online education startup Byju's raised $540 million in a new funding round, the firm has reportedly snapped up its largest acquisition to date. The Bengaluru-based startup, which is the world's most valued education technology firm, has acquired US-based Osmo for $120 million. This is also Byju's first ever purchase of a US company.

Osmo is an award-winning playful learning system that brings physical toys into the digital world through augmented reality and its proprietary reflective artificial intelligence - thereby fusing physical play with digital engagement.

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In other words, it allows any object like pen & paper, blocks or toys to interact with an iPad, iPhone or Amazon Fire camera. Tangible Play Inc. - the business behind the Osmo brand - was founded in 2013 by Pramod Sharma and Jerome Scholler.

Byju's said in a statement that it intends to tap Osmo's physical-to-digital technology and content to expand and enhance its current offering. "With this acquisition, we are expanding into a new age demographic and entering the world of younger kids (age group 3-8)," said the company's founder and CEO Byju Raveendran.

The company is already India's preferred learning solution for grades K4 to K12. "Our partnership with Osmo will help kids acquire love for learning at an early age by introducing 'play-based learning'. Osmo's world-class product capabilities teamed with our expertise & scale, will help build strong learning products for younger students," he added.

The secret to Byju's success - it has been growing at 100% for the last 3 years and is on target to triple its revenue to $250 million this year - is its focus on engaging content and how the app adapts to student performance to make learning enjoyable and effective.

The company believes with Osmo on board it has the "critical elements needed to build out an unprecedented library of engaging and entertaining educational content for a global pre-K-12 student audience". Sharma, Osmo's CEO, and his core team will continue to remain at Osmo's helm.

With this deal Byju's kicks off its aggressive international market expansion plans and the company says that it will continue to make big investments in technology that will help to further personalise learning for students. Incidentally, it is the most well-funded edu-tech player in the country, counting Tencent, Verlinvest, Sequoia Capital, Lightspeed Venture Partners, General Atlantic, Chan-Zuckerberg Initiative and Aarin Capital (Manipal Group) among its investors. The latest funding round is expected to value the startup at around $3.6 billion - up from $1 billion earlier last year.

The investor interest is understandable given the potential of the sector. According to a recent Research and Markets' report, the online education market in India is predicted to grow at a CAGR of 20.03% during the period 2018-2022.

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