It’s rare that funded startups attain profitability during their early years of inception as they are notorious for burning capital without caring about profitability. Nevertheless, some startups are the exception who manage to become profitable in quick time. One such startup is education tech platform NeoStencil.
The Gurugram-based company has claimed to have revenue of Rs 10 crore since its inception in July 2015. Interestingly, it also claims profitability from the beginning. “We are profitable overall and on the unit-economics basis as well,” says Kush Beejal, founder, and CEO of NeoStencil.
NeoStencil is a brainchild of AIIMS, IIT and IIM alumni — Love, Kush Beejal, Anish Passi, Rajendra Uppal and Rajveer. It claims to be the only edtech platform that provides live online classes from renowned teachers for civil services, IES, GATE aspirants.
“We all had relocated to different ‘coaching capitals’ including Kota and Delhi to prepare for exams. We realized that the core problem was never lack of quality teachers. Rather, the lack of access to existing quality teachers,” explains Kush.
Presently, 99 per cent successful students take coaching. Choosing quality teacher is the biggest decision for aspirants. About 50 per cent aspirants spend about 2.5 years and Rs 10 lakh on an average as they have to move from the native city.
As many as 40 per cent aspirants can’t afford to relocate for coaching and join sub-par local teachers. Affordability and the lack of quality teachers in most of the cities have triggered the quintet to float a comprehensive, one-stop test preparation platform.
How is NeoStencil different from Byju’s and Unacademy?
Traditionally ed-tech companies fall on two ends of the spectrum. One set proclaims that their content is the best. The other extreme is an open marketplace with a fundamental that anyone can teach, and students should be free to choose from that wide range.
The poster child of Indian ed-tech space Byju falls in the first category while the Sequoia-backed Unacademy leads the marketplace model.
“We realized most successful students still study from result oriented teachers. So, we created NeoStencil as a managed and a curated marketplace. All the teachers on the platform are selected through very stringent criteria including past results and experience,” adds Kush.
The company does live streaming of the offline classes, thereby, making sure that the student gets a high-quality learning experience – identical to what they’d get if they went to the classroom. Byju’s and Unacademy don’t have live streaming feature.
Why NeoStencil focuses on IAS aspirants?
IAS has the highest aspirational value in minds of people who want to enter government jobs in India. “We were clear – if we were able to establish ourselves in the biggest, toughest exam, our credibility would flow to other synergistic exams. That is why we started with UPSC,” explains Love.
NeoStencil claims to have a big pool of aspirants seeking success in exams such as civil services, GATE, and state PCS. “We also cater to those who are aspiring for exams like SSC-CGL, SSC-JE, Railways etc. by connecting them with the teachers who are experts,” says Love.
Amassing 4,500 paid subscription in two years
Well-renowned teachers including Majid Husain, Pavan Kumar, Mitra Pal, S. Ansari, Alok Ranjan, Praveen Kishore, Kailash Mishra, Venkat Mohan and many others are teaching on the platform.
So far, the company has been able to rake in close to 4,500 students who have joined paid courses. Traditionally NeoStencil’s dominance has been in the optional subjects for UPSC – such as public administration, history, geography, and philosophy.
Delhi, Maharashtra, Karnataka, Andhra Pradesh, Uttar Pradesh contribute maximum subscription for the company. Interestingly, 55 per cent students are from 20 cities, followed by 45 per cent hail from 280 tier III and tier IV cities.
Size of opportunity and so far funding
Currently, the market size of government jobs segment is about $6 billion. Close to 11 million aspirants write such exams every year. NeoStencil eyes to capture 20 per cent of the online test prep marketshare by 2020.
It has raised a seed round of $1 million from the likes of Hiro Mashita (M&S partners), Paragon Trust, founders of Jabong and Unicommerce. While 30 per cent of the above amount was cash, rest was cloud and advertising credits (from Times of India Group).
Subscription-based edtech startups, and the future
Almost a year ago, a joint study by Google and KPMG had mentioned that online education space was worth $247 million. The projected growth will largely be driven by a healthy rise in paid users. Currently, about 2 million students spend the aforementioned amount on subscription-based courses.
Given that paid format in online education would be slated to touch 9.5 million by 2021, emerging edtech platforms such as Unacademy, Byju’s, NeoStencil, Meritnation, and OnlineTyari have the great prospect.