Online Teaching Platforms Like Vedantu Seeing Surge Amidst Lockdown
"We are witnessing the highest growth numbers for Vednatu, Vamsi Krishna, CEO and Co-Founder, Vedantu tells BW Businessworld. Vedantu an Indian Interactive Online tutoring platform where teachers provide school tuition to students over the internet. Vedantu recently raised funding of about $24 million from GGV Capital, a US-based VC firm
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Amidst the ongoing lock-down, startups in ed-tech space are seeing an exponential surge in their user-base as more students are joining various online education platforms to meet their essential education needs. According to experts, online learning has seen a surge of 10x during the March-April period. Startups like Vedantu are providing free learning through their platforms. It has seen unprecedented growth in the recent days, says Vamsi Krishna, CEO & Co-founder of Vedantu, an Indian Interactive Online tutoring platform where teachers provide school tuition to students over the internet.
Talking to BW Businessworld, Krishna informed about the startup’s low period during early-March. Krishna said, “Last month was a little troublesome because we had to make some changes in the business strategy due to the lockdown and that took some time to come around. So, within 10 odd days, we changed the offline business model into online wherein now offline counselling can now be done online. At Vedantu, we have around 700-800 people spread across India who do home counselling. Now the team is doing it in a much better way wherein it is more efficient than our prior model. This is one of the big innovations that happened during the period.”
“We clocked 15 per cent growth in numbers on a month-on-month comparison in March despite the lockdown. In April, it would be around 50 per cent jump compared to March, the highest growth rates for Vedantu in the last two years,” said Krishna. The ed-tech startup has added 3 lakh students in the last 25 days and everyday sees around 10,000- 15,000 students using their platform.
In terms of business strategy, the startup had tried to convert their few free users into the paid model. However, the upside of the revenue from the free users hasn’t happened, for now, stated Krishna. “We expect that to happen once the lock-down closes down. We have made the platform free for the students so that they have some option to go to and our users understand this,” stated Krishna.
As Vedantu had recently raised funding of about $24 million in the month of February led by GGV Capital, a US-based VC firm, so, Krishna informed that the startup is well capitalized and along with business growth, it is going ahead with its appraisal cycles. “Unlike other startups which are facing a slump of 10-30%, they are taking tough decisions. We don’t want to do something for the sake of doing something. For us everything is business-as-usual,” added Krishna. However, he also added that the startup is churning out some 5-8% people, as part of its normal function of laying people off on the basis of their performance every month.
While startups are going through tough times, there will be a dearth of investors investing in a business with low growth numbers. Krishna said, “In the public market, many people will scramble to find a lot of companies that will put value because the prices have fallen. So investors could find the right kind of companies. For startups, it will be getting tougher as 85-90% of the sectors in the ecosystem will go through a tough situation wherein business will be low.” He pointed out that when businesses are low, investors are skeptical to invest. "Considering the current situation, VCs would want to preserve their capital for their existing portfolio companies which might need funds during the current times to survive. The flow of deals for the new companies will fall", said Krishna.
He also highlighted the logistical challenge for any deal to get fulfilled during the lock-down period. “With recent revised FDI norms, Chinese investors are now out of the game. However, for any other investor to invest in any company, they would want to meet the founder or its key team at first hand before going ahead. Due to the lock-down, international investors travel to India and a one-to-one meeting will be difficult for the next three-six months, which will play a huge role in slowing down the investment,” said Krishna.