Varsha worked as an investment banking analyst at Goldman Sachs before switching to journalism. She started off at Business India and later moved to Forbes India where she writes across industries and companies but has a bias towards startups, technology and the FMCG sector. She was a national level athlete and now enjoys running half marathons.
Khan sir still charges Rs 200 for six-month courses that help students clear competitive exams such as UPSC, NDA, and Airforce entrance test, among several others. Image: Manish Sinha for Forbes India
Khan Sir, as he is known by his students, animatedly talks of a time when bullets were pelted, and bombs exploded at his coaching centre in Patna.
“One bomb landed near my foot, but it didn’t burst,” he recalls.
Rivals from other coaching centres were responsible, he says, because of his record low tuition fees: Rs 200 for a six-month course to prep for a government job versus the offline industry standard of roughly Rs 15,000. Naturally, students from all over Patna—and beyond—flocked to Khan’s classes, who never reveals his full name to anyone.
If anything, the attacks made Khan more of a hero. Classes resumed that same evening as hundreds of students took turns at guarding the centre while their peers were being coached. “I did not need any police protection. For one month my students stood by me like NSG guards giving me Z+ level security,” he beams.
This was in mid-2019. Fast-forward to today and Khan still charges Rs 200 for six-month courses that help students clear competitive exams such as UPSC, NDA, and Airforce entrance test, among several others. The only difference is that he now teaches on YouTube—a shift he had to make due to the coronavirus pandemic.
Since starting out on YouTube in April 2020, Khan has become a sensation with a whopping 20 million subscribers. It is the largest and fastest growing edtech channel in the world, he claims. PhysicsWallah, which Alakh Pandey also started out as a YouTube channel before taking on venture funding and hitting a valuation of $1 billion, has nine million subscribers by comparison.
Khan isn’t alone in offering quality teaching at record low prices over YouTube. ‘Vivek Sir’ of Exampur—which is in talks with UpGrad for a potential acquisition; ‘VT Sir’ of StudyBharat fame; ‘Rohit Sir’ of Scoreplus; and ‘Ashu Sir’ of Science and Fun, all run hugely popular YouTube channels with millions of subscribers. Students see them as larger-than-life personalities, heroes from their hometowns of Patna, Modinagar, Ghaziabad, and Noida, respectively. “They are leading a revolution, providing quality education at such low rates,” says one student who studied under Vivek Kumar of Exampur.
But can these homegrown heroes separate their cult from their businesses to give edtech giants, like Byju’s and Unacademy, a run for their money?
*************** (left) Vivek Kumar and Vardaan Gandhi, co-founders, Exampur
Image: Amit Verma
India's edtech industry is growing tremendously. It’s estimated to reach $10.4 billion by 2025 with 37 million paid edtech users, up from $2.8 billion in 2020, according to Statista.
But these heavyweights have grown by spending millions of dollars on marketing. Byju’s, for example, earned Rs 2,428 crore ($297 million) in revenue in FY21, according to data provider Venture Intelligence. But that came on the back of Rs 944 crore ($116 million) spent on marketing, as per the company’s financials. Ditto for Unacademy: It earned Rs 845 crore ($103 million) in revenue in FY22, as per Venture Intelligence, while shelling out Rs 520 crore ($63 million) on marketing, as per the company.
On the other hand, teacher-led-businesses like PhysicsWallah (PW), Khan’s Khan GS Research, or Exampur and the like, have grown organically. Students are drawn to the teachers on YouTube and then opt for a paid course on their apps. “I’ve spent nothing on marketing,” claims Khan, who charged students Rs 11 for the Rs 200 courses on his app during the pandemic.
“Education is more of a pull market than a push market,” says Vardaan Gandhi, co-founder of Exampur.
“You need to first build a large audience who is willing to be taught by you and then you can monetise that audience because they are willing to pay for your services,” he continues.
Exampur was formed after Gandhi joined forces with Ghaziabad-based Kumar in 2019, who was already teaching test-prep courses to crack government job exams on YouTube. He had around 500,000 subscribers at the time and notched 1-2 lakh daily views, says Gandhi. The duo has since grown the outfit to 10 million subscribers and 25 lakh daily views. They also built an app where they launched a six-month course for as little as Rs 800. More than five lakh students will enrol in their paid courses this year, says Gandhi.
“We target 25,000 students in a batch on our app, not less than that. Economies of scale kick in and that’s how the maths works for us,” he explains. Exampur earned Rs 26 crore ($3.2 million) in revenue in FY22 and is on track to hit Rs 60 crore ($7.3 million) in revenue in FY23.
“Pull,” he continues, “comes from first showing students that you are a good teacher. For that you need to teach them for free. It’s basically what we call a demo class in the offline world. YouTube is that demo for them. When you teach every day for free, then suddenly on the 25th day, the student will realise, “It’ll be easier for me to study in a more structured way on the app, plus the fees are so low, so why not pay up and study properly?””
Khan also understands “pull” all too well. His lectures are laced with jokes. “Students like my mode of expression,” he says modestly. He has 20 million subscribers on YouTube and 5.2 million paying students on the app.
The pull factor keeps marketing costs muted, customer acquisition costs (CAC) low and fees affordable, allowing entities to focus on volumes and turn a profit.
“We don’t think of profits. We just look to cover our costs,” says Khan. He chose not to reveal his revenues but says his outfit is profitable.
Ashu Ghai teaches science in a fun way focusing on experiments, has five million subscribers on his YouTube channel, which he calls Science and Fun. Image: Amit Verma
Ashu Ghai, another star teacher from Noida, who teaches science in a fun way focusing on experiments, has five million subscribers on his YouTube channel, which he calls Science and Fun. He launched an app in early December on which science and math courses for 10th and 12th class students are currently offered free of charge. His offline centres in Delhi charge students Rs 9,000 per year for all subjects, compared to other centres that charge Rs 25,000 per year for one subject. “I use experiments and jokes to make science concepts come alive. Yes, this means we cover the syllabus slowly, but we do extra classes on Sundays for 3+ hours. Students fight with their parents to come attend our classes,” he says.
Similarly, Vishal Tiwari, a former Unacademy teacher, started StudyBharat as a YouTube channel and app six months ago to help students crack the JEE and NEET exams. He speaks their lingo and focuses on average students from Tier 2 and Tier 3 cities. “I understand their struggles, because I too come from a modest background, and I too was a backbencher. Everyone focuses on the star students, but I believe in Abdul Kalam’s vision that the future of the country lies in the backbenchers,” he says. He has already crossed 150,000 downloads on his app where he charges Rs 7,500 per annum compared to Rs 75,000 to Rs 2 lakh charged by bigger players and offline institutes. He says the StudyBharat app has 30,000 monthly active users, of which 20,000 are paying users.
“One has to appreciate that the price point of these one-celebrity teacher-led channels that scaled during Covid and later graduated to apps, was significantly lower (70–75 percent) than popular large digital or offline education course providers, hence adoption was quick,” says Manish Kheterpal, managing partner at WaterBridge Ventures—the first institutional investor in edtech companies like Unacademy and Doubtnut.
Star teachers have also developed a unique business model to keep costs low: Prior to Unacademy Tiwari used to post videos on YouTube and also teach offline. So when he started StudyBharat and he needed help to solve students’ doubts, he roped in his former students who have been placed in various medical and engineering colleges. A present student posts his query on the app by clicking a picture or recording an audio note; within 2-3 minutes one of his 1,000 former students solves the problem for the student. “They do this for me all for free,” says Tiwari. Also read: Salman Khan and his zero-profit blockbuster- Khan Academy
So “pull” also brings with it goodwill.
But with it also comes the “key man” risk. That is, will students flock to these platforms if Khan or Kumar or Tiwari or Ghai aren’t teaching?
“Teacher quality dilution due to other teachers coming on board aside from the main celebrity teacher / key-man is something most of these channels / platforms will struggle with over the long term,” notes Kheterpal.
Vishal Tiwari, a former Unacademy teacher, started StudyBharat as a YouTube channel and app six months ago to help students crack the JEE and NEET exams
Image: Amit Verma
Gandhi is aware of the risk. Kumar, for example, was teaching individually before Gandhi came on board. Now Exampur has a team of 125 teachers, teaching over 100 courses. “When a teacher joins, he goes on a 15-day training period in which he is taught basics like how to talk to students while in front of a camera,” he says. “They should feel as though the teacher is in front of them – that’s what made Vivek stand out in the market, so that’s what we try to replicate.” Khan, too, individually picks teachers who are not only good at simplifying concepts for students but share his same “mindset”, he says. “They have to be enthusiastic about changing our education system and doing so at a low cost,” he says. He has a team of 600 teachers.
Importantly, as these entities scale or get snapped up by bigger edtech players can they continue to keep their fees at rock-bottom levels? Take the case of PhysicsWallah. Since raising $100 million in its Series A round, they have set up physical coaching centres that charge Rs 30,000 to Rs 60,000 per course--a far cry from its Rs 3,500 online course fees. A focus on vanity metrics may also creep in forcing such entities to go down the route of aggressive sales tactics like Byju’s.
Exampur’s Gandhi chose not to comment on anything related to the UpGrad acquisition as the talks are underway. Will they keep their focus on quality education at low prices?
Khan, who regularly gets offers “in hundreds of crores” from larger edtech players to join forces, is quick to respond: “Where did Dronacharya take fees from his students? It’s just not in our culture.”