Idea to Series A: GoStudent
Felix Ohswald is the founder and CEO of GoStudent, Europe’s leading online tutoring platform. As of writing, GoStudent delivers over 200k tutoring sessions per month, with a monthly growth of 20–40%. In 2020, GoStudent raised their €13.3mn Series A led by Left Lane Capital and DN Capital. Whether you’re building a marketplace, selling to parents, or figuring out the pricing for your edtech product, this article is for you.
What’s the story behind founding GoStudent?
At school, having a few great teachers can fundamentally change your life outcomes. But the problem is that kids often don’t have great teachers when they’re learning something. Through GoStudent, I want to fix this problem by connecting students with world-class teachers in an affordable way.
How did you ensure high-quality learning for students, even from day 1?
We started out by connecting students and teachers over WhatsApp. Even then, we had a rigorous multi-step process to evaluate teachers before bringing them onboard. Unlike other tutoring platforms, we also offer a lot of value-add services for students and parents. This includes personalised lesson plans, substitute teachers, and a customer success manager who will pay close attention to their needs at all times.
Disintermediation is one of the biggest challenges for tutoring businesses — how do you overcome this?
There are a number of ways that we do this:
- Long-term subscriptions — we sell subscriptions to parents for 6, 12 and 24 months
- Great technology infrastructure — we provide an end-to-end technology solution that makes it seamless for tutors to serve and bill their clients
- Value-add services — for parents, this includes the customer success manager and ongoing support, so that they benefit from more than just the teacher
How do you effectively sell to parents?
Selling education services to parents is hard because you have to build a relationship. We do this through our sales teams that call parents, and connect with them in a meaningful way. The key to this is listening to the parents, as they are deeply emotionally invested in the education of their kids. The salesperson needs to carefully listen to the needs of the parent, identify the most important development areas, and then match them with the ideal teachers accordingly. As a data-point, Byju’s does this with a team of 10,000 salespeople.
How do you win in a highly competitive tutoring market?
There is a common misbelief that the tutoring market is competitive, and so your CAC will be very high. The reality is that ‘competition’ comes from two sides:
- Traditional marketplaces — examples here include MyTutor and Superprof, but as pureplay marketplaces, these players have low LTV and so can’t afford to spend a lot of money on marketing
- Individual tutors — there is a large ‘shadow market’ made up of thousands of individual tutors. They have an even smaller budget, and so can only spend very little locally on customer acquisition
At GoStudent, we can afford to spend more as we have a much higher LTV. Our CAC varies across different channels, and blended CAC can come out as high as 300–400 euros.
What has been your biggest learning as a CEO?
The importance of hiring and retaining the right talent cannot be understated. I don’t believe that you necessarily need to hire people into roles where they have done this before. What’s more important for me is to hire individuals who are super-motivated, hungry, smart and self-confident. As you quickly bring in larger numbers of new employees, it’s really important but hard to show visibility as a CEO. What’s essential here is to clearly communicate and embody the values of the company.
What led you to raising the Series A?
To be honest, I wanted to raise money even earlier as we were consistently showing strong growth and unit economics. For the Series A, fundraising took a couple of months as many VCs gave feedback that they don’t really understand the education market. They often kicked the ball into the long grass as there was limited conviction in the market opportunity. When someone leads your Series A, you want to have a gut feeling that these are the right people you want to work with. This is why I chose DN Capital and Left Lane Capital, as they really believe in the vision.
What are the biggest upcoming opportunities for GoStudent?
Although families in Germany spend EU30bn per year on tutoring, we are already growing internationally to make the most of our first-mover advantage. We expect international expansion to be the biggest immediate driver for growth. Beyond that, we have considered expanding from live teaching to content. However, given the heterogeneous nature of the European education market, this is unlikely to be a focus for the near term.
To access more practical insights from founders like Felix, sign-up to our newsletter, here.
