Austrian startup GoStudent turns into Europe’s first edtech unicorn
School children in the Netherlands are doing homework at home during the coronavirus crisis.
Robin Utrecht | SOPA pictures | LightRocket via Getty Images
LONDON – SoftBank, Tencent and other leading investors are betting that the next big online education company will come from Europe.
Vienna-based online tutoring start-up GoStudent said Tuesday it had raised 205 million euros ($ 244 million) in a record round of investments that raised the five-year-old company to 1.4 billion euros, or about 1.67 Estimated billions of dollars.
According to data from CB Insights, that means GoStudent is Europe’s first educational technology or edtech unicorn, a start-up valued at at least $ 1 billion. Although Norwegian rival Kahoot hit a billion dollar valuation last year, it doesn’t technically count as it has been listed on the stock exchange since October 2019.
GoStudent was founded in 2016 by the Austrian entrepreneur Felix Ohswald, who was inspired by his grandfather’s practical math classes even before he went to school.
“He had the ability to teach you this stuff in a very applicable way,” Ohswald told CNBC, referring to his grandfather.
“One of the biggest problems in education is lack of access to great teachers,” he added.
What is GoStudent?
GoStudent is an online service that connects students between the ages of six and 19 with private tutors. The company sells monthly tutoring subscriptions to parents and takes a portion of the tutor’s income as commission. The prices for GoStudent sessions range from 17.50 euros to 26.90 euros – between 20 and 32 US dollars – per month.
Ohswald, who completed his bachelor’s degree in math at the age of 18, said his company now sells 400,000 sessions per month and sales have increased 700% in the past 12 months. GoStudent plans to double the number of monthly sessions on its platform to 800,000 by the end of 2021.
The overall attitude towards online teaching has changed completely.
Edtech companies like Coursera, 2U, and Chegg boomed during the coronavirus pandemic when lockdown restrictions forced 1.5 billion children around the world to learn remotely. However, Ohswalt said the closure of Covid-19 schools had actually reduced the demand for “complementary” teaching services like GoStudent.
“On the flip side, the overall mindset for online teaching has changed completely,” he added. “Suddenly, parents who were extremely skeptical of online learning before the pandemic are now at least giving it a chance and trying it out.”
GoStudent says it reviews all of the tutors on its website, with Ohswalt describing the application process as “pretty tough”. Only 8% of math teacher applicants manage to get admitted to classes on GoStudent, he said.
But GoStudent was embroiled in controversy earlier this year when it was discovered that a 60-year-old who was banned from teaching for selling naked pictures of himself to a teenager was teaching on the platform. GoStudent said the teacher gave a false name and was removed from service after the company became aware of it.
The fresh injection of money from GoStudent was led by DST Global, an investor including retail app Robinhood and fintech firm Revolut. Vision Fund 2 from SoftBank, Tencent, Dragoneer and existing investors such as Coatue also supported the round.
After GoStudent has raised a total of 291 million euros so far, it plans to expand beyond Europe – where it is represented in 15 countries – into other markets such as Mexico and Canada by the summer.
Asia is another potential geographic expansion destination for the company, Ohswald said, highlighting the Philippines, Indonesia and Malaysia as “interesting” opportunities. However, he ruled out an expansion into countries such as China and India, which are already home to established e-learning players such as Yuanfudao and Byju.
GoStudent announced that it would increase its hiring and aim to almost double the global workforce from 600 to 1,000 employees by the end of the year. Some of the funding can also be used for acquisitions, the company said.