The Challenge of Scaling Up

The term ‘startup’ is known the world over, however the term ‘scaleup’ is still a relatively new one. With many startups failing for one reason or another, the term serves to differentiate businesses who are still in their experimentation phase from those that have achieved proof of concept, enjoyed a degree of success and are ready to move on to the next phase of growth.

While there are a variety of definitions available that can be used to determine whether a business is regarded as having moved onto the next phase of its lifecycle — mainly referring to growth rates, employee count and revenue — scaleups can essentially be seen as successful startups.

They have a roadmap to profitability, experiment less and are better able to manage risk. They also tend to have a more defined organisational structure, as generalist founders begin handing over select responsibilities to more experienced specialists who have been brought in to help the company fulfil its potential.

Regardless of industry, it is often challenging for startups to graduate from their nascent life phase and become scaleups. This is particularly true in EdTech, which has seen a proliferation of startups entering the market in recent years. In EdTech, the product is arguably the most important determinant of whether a company can scale. While this may sound obvious, creating a product that is the right mix of intuitive, engaging and problem-solving is a tall order and one that many startups do not get quite right.

An example of a company that has successfully navigated the transition from startup to scaleup is the 2020 EdTechXGlobal Awards winner OpenClassrooms. Founded in 2007, OpenClassrooms is a French online programme manager that offers diploma training programmes and free-access courses in various fields including web development, project management, human resources and user experience. Since 2012, the company has raised $150m over five funding rounds, including an $80m Series C round in April of this year. Over this time, the company has grown their team to over 2,000 people, moved offices numerous times to accommodate this growth and added services offerings to cater to corporate clients.

Turning an idea into a profitable, scalable business is a challenge. Thousands of startups have set their sights on EdTech in recent times. For these companies, the coming years and their ability to create a product that excites consumers and can adapt to meet changing market needs will be decisive in determining whether they will be successful in mirroring the likes of OpenClassrooms in graduating and making the jump from startup to scaleup.

To find out more and apply for the 2021 EdTechX Scale-Up Awards, visit the EdTechX Awards page.