How Did It Happen?
In 2021, the Austrian company “Go Student” became the world’s very first European EdTech Unicorn, meaning that the startup reached a valuation of over $1 billion. Currently valued at €3 billion, GoStudent, a startup focusing on private tutoring for K12 students, is clearly a force to be reckoned with. But, how did their valuation increase so rapidly? Why did GoStudent become the mighty EdTech giant it is today? And, most importantly, what can we learn from their success?
GoStudent is a private tutoring company which provides online tutoring for K12 students. Tutors are always vetted by the company before they join the platform to ensure a high quality service. Students are then offered a practice lesson and parents are able to interview individual tutors to ensure a successful match between tutor and student. Currently, the company offers classes in about 30 different subjects and has over 15,000 tutors, with more than 1.5 million tutoring sessions booked per month.
The company was founded in 2016 in Vienna by CEO Felix Ohswald and his chief operating officer, Gregor Müller. The company started as a platform where students could find answers to difficult questions, as it was a free homework-chat via WhatsApp. However, after the first angel investment, this concept was then scaled up into a company app which included a homework chat, which by 2017 had 100,000 users, leading to a €500,000 investment in the startup. The concept at this point was very different from the one the brand is tied to today, as it was a a “chat app” rather than a private tutoring platform.
In 2018, the business model was altered, as paid tutoring sessions became available online through the platform. At this point, the company had established a user base of over half a million students, as well as receiving a seed fund of €1.4 million. Yet, the company drastically changed their business model once again in 2019, introducing the notion of a paid membership to their tutoring platform, memberships that could last between 6 and 36 months, a smart way of strengthening the company’s relationship with its customers and driving growth.
However, the company’s truly rapid growth began in 2020, with €13.3 million received in investment, leading them to hire 75% more employees and ending the year with over 150,000 booked tutoring sessions per month. By 2021, GoStudent became the world’s very first European EdTech unicorn, having raised a Series C round of €205 million and reached €1.4 billion in valuation, establishing its place as the world’s very first European EdTech unicorn.
However, this milestone may have been facilitated by the fact that, in 2021, European EdTech VC investment tripled, increasing from about $785 million in 2020 to $2.50 billion in 2021. It is quite likely that this explosive increase was triggered by the pandemic, as Covid 19 shone a light on the vital importance of the EdTech industry. Interestingly, Ohswald claimed that the pandemic was not the main factor causing the company’s substantial growth, stating to TechCrunch that the pandemic meant that “with schools closed, there was less pressure, less exams, less demand for after-school study.”
Whether or not the pandemic did help the company, what is clear is that GoStudent changed their business model substantially since the startup launched, showing that they were able to adapt to what they saw was successful, rather than insisting upon their initial concept.
The company’s dynamic approach to their business model, which arguably could be labelled as trial and error, is clearly one that put them at the forefront of the EdTech industry.
For more information on the EdTech industry, visit the SuperCharger LinkedIn page.
Article by Sofia Daley Sevilla