WATCH: How Simplilearn went from a 75pc fall in revenue in 2015 to closing FY18 with Rs 150 Cr
Edtech startup Simplilearn started as a blog in 2009 by IIT-K alumnus Krishna Kumar, who had just sold off his startup, TechUnified. The blog became an online learning company because of feedback from readers who requested him to help them formally learn something that will help their career growth.
As an online learning platform, the startup began with a project management certification called PMP (Project Management Professional certification). At the time, people began thinking of upskilling on their own. But four to five years later, the trend has seeped across sectors, with students and working professionals upskilling in IT, management, business analysis, banking, data analytics, etc. Simplilearn focusses on working professionals looking to upgrade themselves.
Krishna Kumar believes that it is a question of survival.
In this video interview with YourStory, the CEO of Simplilearn says upskilling will become default behaviour soon – like taking life insurance: even if you never need it, you don’t regret it.
With a paying customer base of over three lakh, Simplilearn’s most popular courses are in artificial intelligence (AI), data science, digital marketing, project management, cloud, and DevOps.
“In a few years, every white-collar professional will think seriously about how to learn something new and have an edge over others. Some will learn on their own – from YouTube, blogs, Stack Overflow, and places where you can go interact with other people like you. They don’t need any help. But there are also some who require very curated content. They would want some guidance and prefer video classes,” he says.
Yet, some people may not find video content very engaging as they take long hours in front of the computer but can still use them if they have the right content. This is the pool of users that Simplilearn is targeting. They want to understand what they need to learn to grow their career, and how to learn it.
Krishna Kumar explains, “They require somebody to teach them. We serve this category – maybe you want to learn machine learning but we will help you identify if that’s the right fit for you. Maybe there's something else that is most relevant for you. And once you've decided, our instructors will teach you. And while you're learning that topic, you can interact with the fellow students and the instructor, and do a lot of practice. Our teaching assistants are available 24/7.”
‘No’ to artificial growth
Backed by investors including Innoven Capital, Helion Venture Partners, and Kalaari Capital, Simplilearn has raised $31 million so far. Their last funding was in 2015, and the company has been profitable for the past three years. The Bengaluru-based startup is looking at a global market now: 60 percent of their businesses comes from outside India (mostly Singapore and the US).
“We are not trying to get artificial growth with marketing campaigns. We use our resources to keep growing at a good rate and not get bogged down by what is happening in the market. Earlier, less than 20 percent were repeat users (who consume content repeatedly and/or who refer us to others); now it is above 40 percent,” Krishna adds.
Simplilearn also plans to strengthen its domestic operations from cities like Chennai, Hyderabad, Pune, and Kolkata, apart from Bengaluru, Mumbai, and Delhi.
In March 2019, the company has signed a Memorandum of Understanding (MoU) with National Skill Development Corporation (NSDC) to upskill learners in digital skills. As a part of the MoU, 33 of Simplilearn's courses are accredited by NSDC.
The team was 400-strong two years ago, and it grew to 900 in 2018. At present, Simplilearn is a team of 1,200, with half of them in sales and the rest in video production, marketing, finance, HR, etc.
Krishna Kumar lauds his team for an amazing turn around in 2015.
“We had to shut down our classroom programmes in 100 cities to reduce cash burn – which cut down 75 percent of our revenue. At one point, we had cash left for running the company for only six more months. But we focussed on the online classes, and managed to break even the same fiscal.”
More of less
The company closed FY 2018 with Rs 150 crore and expects to close FY 2020 with the current annual run rate of Rs 300 crore. In FY 2021, it wants to hit Rs 500 crore. Their strategy is to reduce the number of courses offered on the platform from the current 400 to 200. “We want to do less, but become a global leader in those,” says Krishna Kumar.
Also, while 70 percent of its customer base is under the B2C model, Simplilearn also has B2B tie-ups with corporates.
Krishna explains, “Most of our consumers work in Fortune 500 companies. We started mining that data, and reached out to those companies for corporate arrangement: more value at a lower price! We could also contextualise our content for their needs, although we don’t customise courses for specific roles. We also report to them on each of their candidates – who is doing what course, and who finished the course (or not).”
Simplilearn is working with more than 200 enterprises across the globe. On a cumulative basis, the company has around 1,000 enterprise customers, including Fortune 100 organisations.
In addition, Simplilearn’s Job Assist programme helps their customers get a job through their tie-up with iimjobs, where the company pays for career counselling for their users.
According to estimates, the edtech industry in India will be worth $2 billion by 2020. The sector has given rise to different models too – for test preparation, for K-12 students, and higher education certificate courses. Krishna Kumar says that more players – like Great Learning, Udacity, Coursera, etc - coming in have helped the market grow, as has media attention on the sector over the past two years.
“It’s not a winner-takes-all market. We are not crazily funded like a lot of consumer startups. But our competition has turned us around. If only one player gets funded, the market cannot be built. In the last two years, many other players have been funded well, and they are all spending on marketing. It has created more awareness of the possibilities of online education,” he signs off.