Jairaj Bhattacharya and Shashank Pandey (sitting), Cofounders, ConveGenius
Image: Amit Verma
“Nobody ever pushed us saying ‘uthao, uthao, uthao (raise, raise, raise),” says Jairaj Bhattacharya, alluding to an absence of investor pressure to raise more money even during the ‘eccentric’ year of 2021 when India’s edtech sector saw an inflow of a record $4.1 billion funding. “We never had this sense of missing out,” says the co-founder and managing director of ConveGenius, an edtech social enterprise. “Was it ‘sense of missing out’ or fear of missing out (FOMO),” I ask. “Sense,” comes a terse one-word reply. “We always had a sense of who were, and what we were doing,” underlines Bhattacharya.
Back in 2014, when Bhattacharya ventured into the social enterprise and impact segment of edtech with Shashank Pandey, the duo had a fair sense of the ground reality. The engineering graduates from International Institute of Information Technology, Hyderabad, knew they were not ‘conventional’ edtech founders when they started ConveGenius. With their social enterprise, the founders wanted to provide high-quality educational content to children in 100 million middle-and low-income households in the country.
The duo decide to do it for free. The trigger was common sense. Large enterprises like Google and Facebook had kept their products—Google search and Google maps, and WhatsApp respectively—free in order to achieve massive scale. The rookie founders in India too wanted scale and impact. “We knew our consumers didn’t have the paying capacity,” says Bhattacharya. The sense of being the ‘odd one out’ in an emerging but feverishly growing edtech world always played on the minds of the rookie founders, who remained bootstrapped for two years, didn’t have a fairy-tale story to woo venture capitalists (VCs), and knew that only a bunch of impact investors would be able to understand their story.
For such a kind of edtech, there were not many takers in 2014. Just a year ago, in September 2013, Byju’s had raised a Series-A round of $9 million, and there were other founders who were trying to cater to students in K-12 and test prep segments. There was money on the table for all kinds of edtech founders except the social impact ones.
The struggle can be imagined from the fact ConveGenius managed to get just one angel in 2015 who cut a small cheque of Rs25 lakh. With some fuel in the tank, the venture progressed, and in 2016, it raised its seed round of $1 million. The same year, Byju’s scooped $50 million in a round co-led by the Chan Zuckerberg Initiative (CZI), an impact investing vehicle started by Facebook CEO Mark Zuckerberg and his wife Priscilla Chan. By then, Byju’s had emerged as darling of investors, including Sequoia Capital (now Peak XV), Belgian investment firm Sofina and Lightspeed Ventures. “We knew investors were not making a queue to back us,” smiles Bhattacharya, who credits his awareness to his common sense. ConveGenius couldn’t raise more, so it didn’t burn more. “It helped,” he says.
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There was another aspect of common sense that helped in a big way. Bhattacharya and his gang knew that thousands or millions of users are not equivalent to crores of revenue. Doing business in the social impact segment can never have a hockey-stick growth. “Look at ShareChat, which has a massive user base,” says Bhattacharya. Started in 2015, the Google-backed social media platform had a staggering 400 million monthly active users and a valuation of over $5 billion in December 2022. The operating revenue of ShareChat jumped from Rs9.4 crore in FY20 to Rs347 crore in FY22, according to Entrackr. Interestingly, over 60 percent of its revenue in FY23 came via advertisement services on the platform, and not from users. The losses, meanwhile, ballooned from Rs642 crore to Rs2,988 crore during the same period. “We knew having a large user base is not directly proportional to revenue,” says Bhattacharya, who saw a heady uptick in users after the onset of the Covid-19 pandemic: From 23 million in FY21 to 86 million in FY23.
The growth of ConveGenius, though, has been more than sedate. Revenue from operations have increased from Rs13.5 crore in FY21 to Rs46.7 crore in FY23. The losses, during the same period, have inched from Rs6.87 crore to Rs7.8 crore. “We are heading towards profitability in FY24,” claims Pandey. The report card is more impressive than it looks, if one contrasts the performance with its peers.
Take, for instance, FrontRow that reportedly shut down operations in July this year. An edtech platform for non-academic skills, FrontRow raised $3.2 million in seed money from Lightspeed, Elevation Capital and Deepika Padukone’s family office in November 2020, and scooped another $14 million in its Series-A round in September 2021. In contrast, ConveGenius just has $6.9 million to show in terms of overall fund raised. Then there is Ronnie-Screwvala-backed Lido Learning, which shuttered last year, and had reportedly raised over $12 million. “The edtech world by and large saw an absence of fiscal discipline,” reckons Bhattacharya. “Nobody was looking at unit economics,” he says.
So far, ConveGenius has bucked the trend of massive fund raise, meteoric rise and dramatic fall. The reasons, Pandey explains, are not hard to find. First, the B2B business model kept it insulated from high cash burn. ConveGenius still doesn’t charge directly from its users. It has its consumers in government organisations, non-profits, philanthropic foundations and a chain of low-budget private schools. Second, the edtech startup never built its sales and marketing team. “We never advertised, never spent marketing dollars, and never had high CAC (customer acquisition cost),” he says. ‘We stayed frugal,” he underlines. Also read: ConveGenius Provides Free Education To Rural Kids. Can It Make Money?
Third, the co-founders have taken a long-term approach in building the venture. Look at the best educational institutions in India, chips in Bhattacharya. “They were not built overnight,” he says. Education, he adds, is not fast-food like Maggi. “Learning and earning both take time,” says the co-founder whose venture is backed by Michael and Susan Dell Foundation, Gray Matters Capital, Heritas Capital, 3Lines Venture Capital and BAce Capital.
Along the way, they have made mistakes as well, the co-founders say, but only when they tried to look like geniuses. “We too chased a lot of vanity metrics,” says Bhattacharya. The metric of chasing and racking engagement time of users on a monthly basis was a flawed approach. “The real metric was retention of the users. High retention means high engagement,” he adds. The real metric for every edtech founder, he underlines, are three: Operating revenue, Ebitda (earnings before interest, taxes, depreciation, and amortisation), and retention and stickiness of users. “This is what businesses are all about,” he says, adding that rest are mere optics. One just needs to keep things simple, and not buckle under the pressure, he lets on.
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Back in 2022, when the edtech venture funding had tumbled to $2.5 billion from a high of $4.1 billion in 2021, Bhattacharya too was under pressure of a different kind. The edtech world was crashing around, and there were suggestions and temptations to explore the world beyond edtech. “People told us the market has crashed, funding winter has set in, so do more to survive,” Bhattacharya recalls.
The co-founder, though, gave a different spin to the same set of arguments. Just because the market has crashed, he reasoned, there is a larger opportunity to be more aggressive. “I believe in doing less and achieving more,” he says, adding that a lean team, and absence of heavy operational and administrative machinery came handy for ConveGenius. “It’s important to take control of the narrative,” he says, alluding to handling pressure from all quarters and not giving in to temptations of plucking the low-hanging fruit. The edtech market, he underscores, is here to stay. The fittest will survive, the fattest will die.
But is ‘survival of the fittest’ not common sense? It’s the law of nature. So, why did other edtech startups miss noticing the writing on the wall and shaping up? Bhattacharya smiles, politely declines to answer, and sums up his journey as a social impact edtech founder. “It’s not easy. But nothing in life comes easy,” he adds, underlining that he doesn’t consider himself to be a genius. “I have an average IQ,” he says. Well, this is what genius is. It’s not having a high IQ, but generously dipping into and using one’s sense and common sense.