GoStudent Raises $340 Million To Bring Online Tutoring To U.S.
Austrian education startup GoStudent has raised a $340 million Series D round ahead of expanding its math, languages and science tutoring to the United States. The marketplace which already has signed up 15,000 tutors in 20 countries also plans to expand further in Europe and into Asia.
The Vienna-based startup was valued at $3.4 billion in the round which was led by Prosus along with Deutsche Telekom, SoftBank Vision Fund 2, Tencent, Dragoneer, Left Lane Capital and Coatue. GoStudent raised $244 million from investors in June and claims to have grown the number of tutoring sessions it runs monthly tenfold to 1.5 million over the last year.
GoStudent cofounder and CEO Felix Ohswald says that its main competition, and recruiting base, was a “shadow economy” of tutors recruited by parent referrals or classifieds. “I think there is a huge opportunity to bring online one-on-one teaching and group classes to American households for an affordable price,” says Ohswald. “Our aim is to break up that shadow market by giving you the same, or similar cost, but giving you higher quality assurance.”
Coaching for SAT, and other standardized tests, made up a large slice of the after-school tutoring market in the United States but Ohswald says there was an opportunity for tuition in English, maths and science but also elective subjects like coding.
GoStudent’s plans to expand internationally won’t extend to India, says Ohswald, 26, where the startup would face entrenched competition from players like Byju, India’s most valuable startup, and Unacademy. China was also off the table after a Beijing crackdown on for-profit tutoring in July wiped billions of dollars from the share price of education companies Gaotu, TAL Education and New Oriental Education & Technology.
The education unicorn also plans further acquisitions of K12-focused education services and content companies after buying Fox Education, which runs an app connecting parents and schools, in September. Ohswald says that the education market was fragmented but GoStudent saw the potential to scale internationally products like Fox Education’s SchoolFox app, which is already used by a million parents in Germany, and connect them with its own tutoring services.
GoStudent will have a strong balance sheet if it plans a deal-making spree with Ohswald adding most of the $244 million round was still on the startup’s balance sheet. “So the reason [for the raise] is not so much we have a high burn rate it’s more like the momentum, and the environment was in shape where we said ‘let’s do this’ and it allows us on the acquisitions side much more flexibility,” says Ohswald.