 "Ajitabh Banerji")
Zishaan Hayath and Hemanth Goteti have been there and done that: Floated a start-up, sold it successfully and made their millions.
But it was the entrepreneurial streak that struck Hayath and Goteti again and the Indian Institute of Technology Bombay graduates decided to venture into the education segment with Toppr.com.
Toppr is a start-up using technology and content to disrupt the online test prep market. It is a subject learning platform for middle school and high school, the fifth to 12th grade.
Covering subjects including mathematics, physics, chemistry, biology and mental ability. There are no language subjects. The platform offers courses in IIT-JEE, pre-medical and foundation.
"India has the largest student population but in terms of delivery, a lot more needs to be done. One cannot wait for a generation of teachers to get skilled. The only way delivery can be made better is through technology. That is when we thought about Toppr.com," says Hayath, 33.
Toppr began with test preparation for 11th and 12th grades and integrated other standards: 10th, 9th, 8th, 7th, 6th and 5th.
Features offered include adaptive assessments, question banks, goal-based learning, all-India test series, concise sheet of all concepts and formulae, study material, reports to measure one's progress and allowing students to clarify doubts.
With a higher number of cell phones powered with better processors and cheaper data, Hayath says how students learn and prepare for exams is changing. A key segment Toppr could address is the private tuitions that students take. How one chooses a tuition teacher is largely by word-of-mouth. There is no data on how to select or find an efficient one.
Currently, the test preparation market size is around 18 million students, with an annual growth rate of 20-25 per cent and market value of Rs 18,000 crore. Sectoral players see the numbers climbing, with more and more students taking up the numerous entrance tests engineering, medical, accounting, Indian Administrative Service, banking, et al.
"Parents don't have any data on how their kids are doing. How much time is he spending on each subject, each question? How are the kids doing in the classroom? How much effort is the teacher putting in? With a technology platform, everything becomes data and measureable. You can see everything in order," says Hayath.
Business model
Toppr's is a subscription-based model. Students can subscribe to courses for one, two or three years. The prices vary depending on the course one selects and on an average, a course is Rs 4,000 per year for unlimited usage.
This, says Hayath, is far cheaper given that students spend between Rs 50,000 and Rs 2,00,000 a year for tuitions ,over and above what they pay in colleges or boards. Toppr has around 1,000 IITians on the platform helping students solve their problems and clarify doubts, as it is built around a self-study model.
Toppr has seen a lot of consumption with over two-thirds of students accessing courses on mobile, a much more personal device and easily accessible.
More than 50 per cent of Toppr's activity comes from tier I, II and III towns, as they might have not have access to good coaching classes.
"Toppr is addressing a massive opportunity in the online test prep. The company has developed a rapidly growing community that benefits from its deep content and best-in-class user experience," says Kabir Narang, managing director, Fidelity Growth Partners India. Fidelity Growth Partners is an investor in Toppr.com.
The road ahead
Toppr has been live only for a year. The start-up is planning some digital marketing and also relying on organic and word-of-mouth publicity.
It plans to grow 25 times in 24-30 months. Currently enrolments are 1,80,000. In a year, it is looking at enrolling 1,000,000 students and by the end of 2017 plans to have 5,000,000 students using Toppr.
"We will need more than digital and organic advertising. More people need to discover there is an application called Toppr.com and more people need to know and download the app," says Hayath. With around 120 now, the start-up is adding 20 people every month and plans to take its employee base to 350 in a year.
Investments & acquisitions
This April, the start-up raised $10 million in a fresh funding round led by Fidelity Growth Partners India and existing investors SAIF Partners India and Helion Ventures. Most of the funding, Hayath said, is going to be invested in improving the product and building the technology. A year ago, Toppr had raised $2 million( from SAIF Partners and Helion Ventures.
"The company has exceptional founders in Zishaan and Hemanth, who have built a fantastic team around them. They bring an incredible mix of vision, leadership, technology and execution capabilities that will help scale this business," Narang of Fidelity Growth Partners India adds.
The start-up acquired EasyPrep early this year for an undisclosed amount. "EasyPrep was a very young team and trying to do exactly what Toppr was trying to do but on a much smaller scale. We felt it makes sense for us to do the same together because essentially we are competing for the same customer base," says Hayath. Toppr has absorbed the EasyPrep team and product. Hayath does not rule out future acquisitions in this space. "There are many teams that are building exciting products in education. We are evaluating some ventures and there are a lot of cool things being done," says Hayath.
FACT BOX
Area of business: Test-prep
Founded in: April 2013
Revenue: Rs 5 crore (2014-15)
Funding: Two rounds - $2 million from Saif Partners & Helion Ventures in April 2013; and $10 million from Saif Partners, Helion & Fidelity Growth Partners in May 2015
EXPERT TAKE
With increased focus on online companies, it was a matter of time before focus shifted to the online education space. Toppr is among a large number of players to have successfully managed to convert exam question databases online so as to make it accessible to everyone - not only those having access to coaching classes. With a large number of national examinations in India moving online, the simple 'question-answer' format followed by them is expected to evolve into a more adaptive concept, like those followed by GRE, GMAT, etc. This will give students access to intelligent platforms that support adaptive testing models. If Toppr does manage to consistently expand and refresh its database of questions, it will be in a position to create a differentiated online testing portal.
The scalability in this model will be derived from the ability of the team to expand the menu of subjects being offered as well - to move beyond IIT-JEE, PMT, etc and cover the large section of state level entrance examinations as well.
Ajitabh Banerji, Principal, ASK Pravi Capital Advisors
