Outschool Funding
Outschool an online education platform, has announced on 18th September 2020, that it has received USD 45 million funding from Light Venture Partners.
Other participants include Union Square Ventures, Reach Capital, SV Angel, FundersClub, Y Combinator and others. The latest funding brings the total capital to USD 55 million.
The company claims that its customer base has dramatically widened since the coronavirus pandemic and resulting lockdowns. They say that the platform saw its addressable market increase because the students left the school campus to abide by COVID-19 rules & regulations instituted by the CDC.
“When the CDC warned that school closures may be required, they talked about ‘internet-based tele-schooling,’” co-founder Amir Nathoo said. “We realized they meant classes over video chat, which is exactly what we offer.”
Suddenly, an online small group of live Outschool classes became an essential for students. Outschool classes are now high in demand and it ranges from engineering lessons through Lego Challenges to Spanish teaching by celebrity Taylor Swift songs.
From August 2019 to August 2020, the online educational class service noticed a more than 2,000% increase in bookings. But the surge isn’t just a crop of free users piling atop the platform. Outschool’s sales this year are around USD 54 million, compared to USD 6.5 million the year prior. It turned its first profit as a result of the COVID-19 crisis, and is making more than USD 100 million in annual run rate.
The new capital inclusion gives a chance to grow its 60-person staff, which started at 25 people this year.
Discovery of Outschool
The company was incorporated in the year 2015 by founder Amir Nathoo, who was programming computer games from the age of 5yrs. So when it came to starting his own company, developing a platform that helped other kids to do the same felt right.
In 2015, Nathoo grabbed Mikhail Seregine, who helped build Amazon Mechanical Turk and Google Consumer Surveys, and Nick Grandy, a product manager of an another edtech company, Clever and YC alum. The trio drummed up a way to help students access experiences they don’t get in school.
Amir Nathoo explained, “Homeschooling was interesting to us because we believed that if some new approach is going to change our education system radically for the better, it was likely that it would start outside the existing system.”
He further explained that he observed that the homeschooling community had more flexibility around self-directed extracurricular activities. Plus, those families had a bigger stake in finding live, small-group instruction, to embed in days. The idea landed them a spot in Y Combinator in 2016, and, upon graduation, a USD 1.4 million seed funding from Collab+Sesame.
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