Outschool is an innovative education platform that offers a variety of engaging, small-group classes online for kids from 3 to 18 years old. The platform offers to learn about science, arts, IT, languages, and many more via interactive, live video by experienced, independent educators. Outschool attracting a high number of qualified teachers
around the globe. During the COVID-19 pandemic, the platform became vital to families who wanted to keep kids learning, social, and pursuing their passions.
Outschool core product is after-school classes for entertainment or supplemental studies, on an ongoing or one-off basis. As the company has grown, ongoing classes have increased from 10% of its business to 50%, implying that the startup is generating more reliable revenue over time. The company was founded in 2015 and headquartered in
San Francisco, California.
- Outschool offers more than 140,000 live online classes to more than 1,000,000 learners in 183 countries worldwide.
- The company was named Top-10 most innovative education companies in 2021 by FastCompany In 2020, the company has opened offices in Canada, New Zealand, Australia and the U.K.
- Currently, the company has over 1300 employees worldwide.
- The overall number of educators has increased in 10 times since the beginning of Covid-19 and equals to 10,000+.
- Currently, total educators earnings amounts to $139 million.
- Total funding: $287 million
- Last funding round: $110 million — Series D
- Last round valuation: $2.98 billion
- Last round date: October 2021
- Lead investors: Tiger Global Management, Coatue, Y Combinator, Lightspeed Ventures, Union Square Ventures, Reach Capital
Amid the COVID-19 crisis, the global market for E-Learning estimated at US$250.8 Billion in the year 2020, is projected to reach a revised size of US$457.8 Billion by 2026, growing at a CAGR of 10.3% over the analysis period.
The E-Learning market in the U.S. is estimated at US$90 Billion in the year 2021. China, the world’s second-largest economy, is forecast to reach a projected market size of US$105.7 Billion by the year 2026 trailing a CAGR of 12.2% over the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 7.6% and 8.6% respectively over the analysis period.
The market already has global leaders like Coursera, Udemy, GoGuardian, and the biggest EdTech start-up – Indian ByJu. However, with greater intensity of competition EdTech companies start to focus on a particular segment of online education like corporate, learning for kids, university courses education, and others.
A lot of Big Tech companies entered the market as well and started to educate future talent to join their corporations. Google started its own online university ‘Grow Google’ and Microsoft launched its own education center.
Venture capital also showing great interest in the market. 2020 was a record year in terms of funding, totaling $16.1 billion, while 2021 is showing an even greater pace with $10 billion of funding solely in the first six months of the year.
The toughest competition faced by Outschool is coming from the kids-focused online academy – Age of Learning. Both companies have a $3 billion valuation and offer a similar list of courses. However, Outschool was able to attract users by introducing small groups classes with more personalized education programs. Also, Outschool has a more flexible and efficient system for attracting educators, while Age of Learning is relying on its own large network of educators.
• Changing revenue profile helped Outschool generate more than $100 million in class bookings in 2020, compared to $6 million in 2019 and just $500,000 in 2017.
- The latest funding is going to be spent on international expansion and adding new product lines, like the recent pilot project of B2B learning with a number of schools.
- Some part of the capital will be directed to acquiring early-stage startups focused on direct-to-consumer learning in international markets.
- Platform makes receives higher revenue share if educators join the platform full time: educators receive 70% of the price, while Outschool gets the rest 30%.
- Outschool has dedicated 2% of its stock to reward educators on its platform in the event of liquidity.
We expect Outschool revenue for 2021 is going to be from $150 to $170 million.
In case the company will be able to maintain the growth pace, it may reach an estimate of $5.9 billion as early as 2023. Given the Series D funding stage and the time horizon of the analyzed period, we can expect a public offering in 2-3 years, with potential growth of investment from 70% to 100%.
Founders and management
- Amir Nathoo – Outschool c-founder and CEO – worked at IBM and later at mobile payments company Square before launching Trigger io- startup that helps developers create mobile apps. Graduated from Cambridge University with MS in Electrical and Information Science.
- Mikhail Seregine – the second co-founder of Outschool. Previously had experience by working at Google as a software engineer. Received computer science degree at Stanford.
- Nick Grnady – co-founder and currently a Head of Product at Outschool. Had experience as lead engineer and product manager at Airbnb and Clever, respectively. Received Computer science degree at Oxford University.
- In case Covid-19 and lockdowns will take less place in our life, online education would struggle to compete with real life learning activities. However, Outschool founders target to become a supplementary education.
- Regulation. China ban for private tuition is a great example of how regulation can harm the international expansion for both copy and industry.