Building a European EdTech Unicorn from Vienna, Austria: Felix Ohswald, CEO of GoStudent (Part 5)

Sramana Mitra: Talk about financing. Before the pivot, you raised $3 million. What happens after the pivot?

Felix Ohswald: We raised $600 million in all.

Sramana Mitra: What was the next round immediately after the pivot?

Felix Ohswald: We pivoted in 2019. We had 12 months where we tested out a couple of things. At the beginning of 2020, we raised our Series A round of €8 million from a VC firm in New York and London. With that money, we pushed in our international expansion.

The international expansion allowed us to increase our addressable market. Then after we raised the Series A, we had the next round of €70 million by Coatue. Then we had one round that was led by DST. That was €200 million. Then at the beginning of this year, we raised €300 million from Prosus.

Sramana Mitra: Can you discuss what kind of revenue numbers you’ve been able to hit to justify this level of financing?

Felix Ohswald: It’s a combination. The market environment changed and the cost of capital got much more expensive in the last months than it was in the last 10 years. To give you a sense of magnitude, between January 2021 and April 2022, we grew the business by 800%. We grew super fast. As mentioned, we are booking about 1.5 million lessons per month. One lesson is about €20 on average. It’s a significant amount. We raised at the valuation of €3 billion.

Sramana Mitra: What is the backend when you’re bringing up a new market? What do you need to have in place?

Felix Ohswald: If you have teachers that are not doing a good job, it reflects badly on us. The kids don’t like the service. The parents don’t like the service. Teachers are very important. In the long run, we want to make it as attractive as possible for our teachers to teach the kids and keep these tutors for as long as possible.

Sramana Mitra: How much money do they make?

Felix Ohswald: Most of the tutors do eight sessions per week. For each individual lesson, the pay differs widely in the markets. If we take a market like Germany, it’s an attractive side job for them. If you compare the learnings of €15 that they make per lesson, it’s an attractive side income.

Sramana Mitra: That was actually my question. Are these tutors doing this full-time or as a side job.

Felix Ohswald: Side job. We only have 2% who do it as a full-time job.

Sramana Mitra: How many tutors do you have?

Felix Ohswald: About 30,000.

Sramana Mitra: Very interesting. How big is the company in terms of employees and how is the company structured?

Felix Ohswald: When we did this aggressive scaling over the last two years, we managed it centrally. We built local operations that report to central headquarters. This allowed us to set up the processes in a very similar fashion.

What we also realized is once we reached a certain maturity in a market and also localized, we have to empower the local teams more. You have to shift more responsibility away from the headquarters to the local markets. We’re in the middle of doing that. Our type of business is very people-heavy. 70% of our employees work in operations, which is a lot. We have close to 2,000 employees.

Sramana Mitra: You are doing this high-touch parent management relationship. That’s very people-heavy.

Felix Ohswald: Yes. You need to manage that carefully and optimize that.

Sramana Mitra: Very interesting. Thank you for your time.

This segment is part 5 in the series : Building a European EdTech Unicorn from Vienna, Austria: Felix Ohswald, CEO of GoStudent
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