Competing with BYJU's, test prep startup GoodEd scaled to Rs 10 Cr revenue per annum in four years
While working with Chief Minister of Bihar, Nitish Kumar — GoodEd's Co-founder Ghanshyam Tiwari, saw the weakness of the state’s public high school system at scale. The tipping point, for Ghanshyam, came when in 2015, images of mass copying during board exams in Bihar went viral, showing relatives climbing buildings and trees to help the students cheat. Ghanshyam began discussing the problem with several friends including Kapil Gupta, Jay Prakash, and Anis Bari who all had a strong sense of purpose and value for education.
Founders of GoodEd
By the end of 2015, Kapil, Jay, Anis and Ghanshyam founded GoodEd Technologies Pvt Ltd with the idea of building a network of good high school teachers who can teach students online in vernacular languages.
"GoodEd is solving for providing affordable access to aspirational programmes online in vernacular languages to high school students. GoodEd provides direct, video-based coaching to high school students in vernacular languages. The company aspires to offer best-in-class learning from good teachers to high school students using recorded and live video lectures, quizzes, tests, counselling, and more," Ghanshyam tells YourStory.
Starting in January 2016, GoodEd built a network of outstanding teachers through references from peers and students at IITs. By April 2016, the startup had created a strong network of more than 100 teachers who used to teach for IIT-JEE, as well as medical entrances.
The GoodEd journey began with an instant pivot in May 2016 when the Supreme Court announced a combined entrance examination named National Entrance and Eligibility Test (NEET) for students in all states who aspire to join the MBBS and BDS courses. With a ready teacher network, GoodEd team decided to immediately build NEETprep.com with a goal to set new benchmarks in a largely uncrowded market for aspirants prepping for the NEET exam. The NEET 2020 exam will be taken by 15 lakh aspirants, nearly 114 percent more than the seven lakh students who wrote the NEET exam in 2016.
"Right after the Supreme Court declared that NEET exam will be the combined entrance across the country for admission to MBBS and BDS, GoodEd went live in 24 hours, announcing an online video course for NEET 2016 which was to be held 12 weeks later. The company created the learning model, content, learning management system, and sales support on the go as students began buying the subscription to the course," says Ghanshyam.
Over the next three months, the startup was able to offer the course to more than 1,000 students across the country in a B2C format.
"The first year at GoodEd became the foundation for creating NEETPrep online programmes– videos, quizzes, technology, and the system for online marketing and sales. NEETPrep, now a leader in the K12 testprep space, has more than nearly 500,000 subscribers learning free on YouTube, 25,000 paying students enrolled in online programmes, and 60000 daily active users who attempt more than 1.2 million questions everyday on the website," says Ghanshyam.
GoodEd says students and parents discover NEETprep.com typically on YouTube, by word of mouth, as well as through digital marketing campaigns run by the startup. Students signup on the website for a discussion with an educational counsellor, who advises the students to go through a free trial course, and when convinced, the student is advised to buy the 1st Year or 2nd Year course for NEET. Once the student is enrolled, they get a full schedule-, chapter-, and topic-wise recorded video lectures, live lectures, quizzes, online tests, doubt service, and continuous counselling. For students without access to quality internet, the videos are also sent in an encrypted pen drive.
Schools who signup on Learner.in, which is a B2B2C online high school extension, get a full course set for direct-to-student learning through recorded and live lectures. Students can enrol in different courses, get access to learning materials, quizzes, tests, and online doubt clearing services.
The business model
The founders have not invested personal capital into the startup. It was able to secure an angel investment of Rs 2.4 crore from seasoned investors led by Tracxn and other angels comprising Anand Chandrasekaran, Kunal Shah, Aditya Berlia, Mekin Maheshwari, and others. GoodEd has raised Rs 3.3 crore in angel rounds in 2016 and 2017.
GoodEd runs two different products. NEETprep.com, a B2C offering which leads the online K-12 testprep in NEET in India. The products include two-year, one-year, and short-term video coaching on NEET, ranging from Rs 35,000 to Rs 7,000, and learning materials such as test-series and masterclass ranging from Rs 500 to Rs 3,000.
"A lot of videos, quizzes and tests are also made available for free on YouTube and over the website," Ghanshyam adds.
Learner.in is the other platform product offered by GoodEd, and now runs an online school with live lectures for 150 schools across the country with nearly 15,000 students in classes IX to XII.
The challenge for the founders was to build a B2C business in a market surrounded by cash-rich incumbents and heavily invested competing startups.
"We asked several questions. How do you raise institutional capital when the founding team is not one that fits the conventional frame? What happens when you face the reality of sink or swim every time the cash reserve becomes thin? How do you attract top talent when cash reserve is thin, competitors have high publicity and backing from top investors, and ESOPs run out of favour as incentives?" says Ghanshyam.
The most difficult time for the startup was in September 2017. GoodEd was running out of cash, the investment was not on the anvil, and the business was yet to become cash positive. However, as student signups increased over the next six months, it became unit economics positive by April 2018. In this phase, GoodEd was able to increase the average revenue per user as well as the number of paid and free students for NEETprep. These successful steps are now the backbone of the business model at GoodEd.
The startup has scaled and remained profitable starting in 2018, with a CAGR of over 200 percent over the last three years.
Plans for the future
Over the next 18 months, NEETprep aspires to enrol 100,000 students into its various long-term and short-term paid programmes. The goal at Learner.in is to become the online extension school to more than 10,200 private high schools across the country serving more than 5,00,000 students. To support this expansion, the startup also plans to raise Series A of $8 million on the back of $3 million to $4 million FY20-21 revenues, expected to be up 200 percent from FY19-20.
"There is no doubt that a mix of online and offline education would trump pure classroom-based learning in the next two-to-three years. We do not think that any of the incumbent, large or small, has figured out the complete replacement of classroom coaching and the one that figures out will win in this huge market. We believe that the opportunity trick in K-12 space lies in developing the requisite motivation in the student to consume the content offered. Significant efforts of GoodEd Technologies currently are going into developing delivery mechanisms that build the requisite motivation in the student to consistently study and test their learning levels," says Ghanshyam.
Currently, NEETprep has 25,000 students enrolled in the paid programmes and another 500,000 students who study from limited access free content on YouTube channel.
For NEET prep, the value proposition is a full-stack course with a strong brand, very influential and popular brand ambassador in Kapil Gupta, and a product that strives to be better than offline coaching.
Learner.in is a work in progress. The USP at Learner.in is to become a plug-and-play expandable online extension school for every high school across India.
The startup’s revenues in FY19-20 were Rs 10 crore, and they expect to do anywhere between Rs 18-25 crore in FY 20-21.
The COVID-19 impact
As per SimilarWeb, NEETprep.com has become a top 1,600 most visited site. With schools closed and students staying indoors due to the coronavirus pandemic, they do not have the option of going to classroom coaching. So, online for the time being has become a default option. "Over the next two-to-three months, when students universally would be studying online, we strongly believe that a lot of these students would reconsider going to physical coaching again. A lot of preconceived notions about online education would get broken. So, that aspect is good for us as well as all incumbents in online education. Traffic on NEETprep.com is up 500 percent post the lockdown," details Ghanshyam.
While NEETprep quickly moved all its faculty, counsellors, technology and operations team to work from home, the most important part was to provide students with a clear path to motivation and getting back to studies again. Kapil conducted the first live session on March 25, on which students were asked to make themselves busy with non-educational tasks.
The startup competes with BYJU’s. However, the founders believe edtech is a large opportunity with India having 150 million students in school and 35 million graduate students.