Gostudent Online Learning
Gostudent Online Learning (the online tutoring market is now valued at $3.2 billion) has become one of the largest and most popular businesses in Vienna, Austria, with a platform of 11 million families and 23,000 teachers. Now one more feature has been added to the list: Profitable. CEO Felix Ohswald told TechCrunch that the company is now gaining global recognition. ”
-not just EBITDA,” said Ohswald, the company’s co-founder in 2016, working with Chief Operating Officer Gregor Müller. The company’s EBITDA is now positive and both GoStudent and the Gostudent Online Learning Group have good financial performance.
Along with online trading platform Bitpanda and fitness tracker Runtastic, which was acquired by Adidas, eight-year-old Gostudent Online Learning is one of the few internationally renowned Austrian startups in the field machine.
But the journey to success was not a quick one.
As online education (and other technologies that support distance and virtual learning) grow, their businesses and many tech companies are disrupted. After years of volume expansion, hot money has become a big problem, as well as demand for many customers has begun to decrease, creating a bad situation . GoStudent’s company lost €89 million in 2021; This figure will increase to 220 million Euros in 2022. This led to many layoffs and significant cost reductions.
Back from the Beginning
GoStudent’s changes come after what Ohswald himself calls the “crazy” hyperscaling phase. “We measured over €100 million in revenue from our core business model from 2019 to 2022, essentially achieving negative growth from zero in two years.” However, he said that the company’s “money burned in 2022 alone will exceed 150 million euros.”
As the market changes, the company knows that it cannot continue on this path despite raising hundreds of dollars. millions of dollars in funding. It reduced gold production by 70 percent in 2023, but this is still not enough. Just a few months ago, in January of this year, Ohswald confirmed in a LinkedIn post that the company was facing another layoff; This is the third time since 2022.
These are tough times for innovation, Mueller said, but the company must know how to grow without spending more. —— At least we’ve learned a lot now. We clearly understand how and where to measure and the important issues we need to address and be more careful about.
GoStudent’s rapid growth is about more than arrogance. If the digital revolution brought about by Covid-19 has been very beneficial, this is especially true for education technology and even Gostudent Online Learning. The company has grown from convincing parents of the benefits of online education to becoming a solution for students needing educational assistance.
But even if this idea continues to bring business to the company, it is still burning money and the cycle needs to be broken. It was easy for the company to move beyond its core business. No more generosity. The purchase will be postponed. There are no attempts to expand into markets where online teaching is not yet available (such as Sweden) or where prices must be lowered to compete (such as Latin America).
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Other business is more serious, such as GoStudent’s successful entry into the United States just a few months after launch; It captures a huge, quiet but highly competitive business environment.
The Gostudent Online Learning brand no longer operates in 20 countries. Instead it focuses on Europe. Except for German-speaking countries, “it will receive a more advanced development strategy.” Reportedly, when chief growth officer and early employee Laura Warnier left the company, she was replaced by marketing director and former employee Dan Zbijowski. Goodbye profitable growth, hello profitable growth.
A long road to the top
Spending less money while dreaming big is a good measure for Gostudent Online Learning, the company still has a clear goal for us Brand Mission is “to create the number one school in the world” This is through self-education unleashes the potential of every student.” The spread of low prices will lead to engagement with the personal approach that customers want.
GoStudent is not yet a school: its services are geared towards teaching, not teaching. However, its acquisition of Studienkreis in 2022 will shows how to develop it. Founded in 1974, the Studienkreis has 1,000 physical education centres, mostly in Germany, which Gostudent Online Learning now uses dually for blended learning.
—We believe the future of education is hybrid, — said Oswald. Another keyword he uses is “glocal”; when courses are national or even regional, GoStudent can add value by using technology to ensure every child finds the right teacher without location restrictions.
Müller said that most of Gostudent Online Learning teachers are university students, and this young group allows them to establish a close relationship with students while also serving as role models. .
According to Ohswald, this is the support many kids need today because they have to live with social media that didn’t exist when we were growing up. – You can build some confidence this time alone, and that’s often more valuable than improving your grades. –
In GoStudent’s 2024 Future of Education Report, based on responses from more than 5,000 parents, the company found that families are looking for more ways to help their children learn. – Frankly, improving performance is one of the main things parents are looking for; If they don’t see this, they won’t be satisfied. But they also want their children to be good at problem solving and other life skills.
Gostudent Online Learning helps schools fill the gap, but the overall goal requires good teachers. For example, pay that keeps up with inflation will help attract and retain these people. Especially considering that some of the 23,000 teachers recently filed a petition complaining that they “receive less than 50% of parent fees while handling almost 100% of the planning and administrative work.” However, GoStudent’s design is different from this.
When asked about progress, Ohswald explained that teachers’ goal is to gain the satisfaction of seeing their students succeed. But perhaps most importantly, Gostudent Online Learning is working to use artificial intelligence to improve the performance of “things that take a lot of time so that teachers can focus on teaching rather than grading,” Müller said.
A positive policy
Ohswald told TechCrunch that Gostudent Online Learning has three priorities in 2024: maintaining good cash flow, maintaining its goal of letting students do it first, and how intelligence will help GoStudent expand its business show that you can help capital – the right way.
The important thing here, Ohswald said, is to show how we can use AI for GoStudent so we can scale the business 100x without adding hundreds of people. . AI allows us to recruit teachers more automatically, help teachers teach them [students] better, and help our staff support and work in hyperscale Land where they don’t need to spend money. –
M&A is another thing Gostudent Online Learning won’t be spending on anytime soon, but the developers are happy with what they did. “I truly believe that being able to obtain these products quickly in a business environment where it is easier to invest will be very helpful to us,” Müller said.
GoStudent found value not only as a company but also as a team. Teacher marketing network Medias has proven to be a reliable channel and alternative that teachers and parents can turn to when they are dissatisfied with GoStudent’s service.
There are many complaints from parents that Gostudent Online Learning forces them to make multi-year commitments, making it difficult to cancel. GoStudent believes that learning should be interactive and not a one-time solution. Of course, contracts can also provide GoStudent with a stable income. To be fair, this also makes teachers more likely to get the same job; and they will do more if they have to find customers themselves.
However, disgruntled parents often report problems with GoStudent to the media. There was a case reported in 2021 in the UK where a father found out that his daughter’s Gostudent Online Learning teacher was banned from teaching. The company apologized and said it had changed its hiring practices, which include background checks (required by DBAs in the UK) and practices that prevent teachers from using WhatsApp to contact students under 16 in any circumstances.
Children’s safety is one of the reasons why the company invested in creating its own tools like GoChat. Of course, it can continue to use external solutions. After all, WhatsApp spent its first three years as a homework chat tool. But the in-house solution makes it easy to prevent teachers from taking students’ phones and monitoring what’s happening in the classroom.
GoStudent also eventually introduced Zoom and switched to GoClass, their online classes based on Tus Media’s previous development. There may be mistakes this time, but it’s also a reminder that Gostudent Online Learning doesn’t want to use off-the-shelf tools: it wants to find innovative technologies to teach well again. For example, one recent addition is GoVR, a virtual reality platform for language learning. All the talk about AI, VR, and blended learning could help support GoStudent’s new financing, a $95 million combination of equity and debt.
But more importantly, it opens up the profitability checkbook and gives the company more options. It gives Gostudent Online Learning the option to increase the debt, choose a different model, or not increase the investment to avoid further disruption. It’s up to us to find the right idea. Ohswald said. This is true in finance, but it is also true in other ways.
