Europe’s biggest ed-tech unicorn reaches unicorn status and tests sector traditions
Published: 13 Aug 2021 10:30
An Austrian ed-tech company is offering a glimpse of the future of education in emphatic fashion, having become Europe’s first sector unicorn with a value of $1.4bn.
GoStudent reached the milestone in late June, less than two-and-a-half years after finding its business model and five years after inception. Its Series C funding round of $205m came just months after the completion of its $70m Series B round back in March, making it the highest valued K12 ed-tech company in Europe.
At first glance, the trajectory almost makes sense, despite the almost unbelievable speed of growth. The Vienna-based company matches students of all ages with stringently vetted tutors to enable one-to-one lessons online. And, of course, during an 18-month period where schooling has been forced into these digital realms, it may seem like the perfect solution at the perfect time.
“On the teacher side, in particular, we have received a four to five times increase in the number of applications, as the appeal of remote working became stronger. That’s understandable. Similarly, convincing parents to give online tutorship a chance for their children also became easier as they’ve become more exposed to the general model.
“However, completing the final link of actually setting up lessons for children in this way became more difficult. Imagine spending six hours in front of a Zoom screen, and then trying to get that child to immediately jump on to a different online class out of school hours. That would have been tough, and demand actually went down a little as a result.”
What the past 18 months have, more significantly, done for Felix and GoStudent, is change the narrative around digital learning. Once traditional classroom settings are back in full flow, post-pandemic, then teachers, parents and students alike now know that education can be digitised effectively. And this Austrian trailblazer is front of the class waiting to fulfil that demand.
The model seems relatively simple. You have skilled and experienced teachers on one side, and students wanting to excel in specific subjects on the other. And the online setting means there are no barriers in the middle.
Bridging different countries, specialisms, capability levels and interests, GoStudent strives to find the perfect match in each instance from across its ever-expanding network.
“At the moment, we’re already booking more than 400,000 lessons a month,” said Ohswald. “We are active in 19 countries, having just expanded to Canada, Mexico, Chile and Colombia, and by the end of the year we plan to grow even more. On average, each kid is taking around eight sessions a month, so two each week. We have more than 6,000 teachers delivering these sessions around the world.”
Remarkably, every one of these 6,000 teachers have gone through a stringent, three-stage interview process; accounting for their subject acumen, their presentation skills, and their sociability. In the UK, GoStudent is part of the Tutors’ Association, and enhanced DBS checks are carried out on all tutors.
The end result is a more tailored and personable route to learning, that parents have especially come around to after a sceptical start.
Transcending the sector
Ohswald recalls that the idea of learning via a digital platform wasn’t overly appealing to many at the company’s outset. But as trust was instilled and success stories prevailed, a snowball effect gathered momentum, word of mouth kicked in, and the business began to scale rapidly.
He also notes, however, that this same injection of enthusiasm hasn’t necessarily transcended the education sector as a whole yet.
“Generally, there’s a stigma around education that hasn’t changed over decades, where anything that threatens the status quo is a crazy idea,” he said. “We’ve seen the same in many other sectors, like with healthcare and the idea of digital intervention to plug gaps in medical care.
“In that case, the solutions on offer aren’t trying to say that the institutions are bad, but are recognising that it’s simply impossible to provide optimum care for so many people just in those traditional ways. There will always be gaps in the service. It’s the same with education – we’re not trying to replace traditional learning, but to complement and bring value-add to it.”
Ohswald added that even among investors in the early days, there was doubt over whether you could make money through innovating the education sector.
“We would say, ‘But the market is so big’. In Europe, you have about 17 million kids aged six to 19 and their parents want to give them the best start in life possible. Meanwhile, you have so many amazing teachers realising they can tutor without leaving their homes, all at a time when online meetings and communication is becoming a norm. ‘How can this idea not make money?’”
Recognised and celebrated
And of course, GoStudent has made money. Both from sales of its service, and from almost $300m through raised financing, its new unicorn status is testament to timing, to interest, and to a proposed new future of education.
Growing approximately 30% month on month, and already looking to double the number of employees to more than 1,000 people by the end of the year; being first to the punch in this niche sector is paying off.
“We really want to channel this success into international growth, doubling down on market share in each of these new markets, before also expanding the actual offerings as well,” Ohswald said.
“It’s funny looking back, it all started when my brother and I discussed the natural limitations you experience in school as a child. You’ll perhaps have one or two teachers you connect with, but I’m sure everyone also had classes they didn’t necessarily engage with, where they’d have benefited from filling that gap outside of the institution.
“Our response was to use WhatsApp to connect kids to tutors for free – it seemed a really basic idea for something that was so beneficial. And we’ve since gone on to show that it’s not just a helpful idea, but a marketable one.
“I’d love to imagine a time where schools and the traditional education sector realise the benefits as well, to a point where they could almost refer students who needed help to digital players such as us. We’re all working towards the same goal, and I hope the role of digital becomes more recognised and celebrated as we come out of this Covid-19 period.”
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