Outschool, newly profitable, raises a $45M Series B for virtual small group classes

Outschool, which started in 2015 as a platform for homeschooled students to bolster their extracurricular activities, has dramatically widened its customer base since the coronavirus pandemic began.The platform saw its total addressable market increase dramatically as students left campus to abide by COVID regulations instituted by the CDC.

Suddenly, live, small-group online learning classes became a necessity for students. Outschool’s services, which range from engineering lessons through Lego challenges to Spanish teaching by Taylor Swift songs, are now high in demand.

“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.”

From August 2019 to August 2020, the online educational class service saw 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 $ 54 million, compared to $ 6.5 million the year prior. It turned its first profit as a result of the COVID-19 crisis, and is making more than $ 100 million in annual run rate.

While the profitability and growth could be a signal of the COVID-19 era, today Outschool got a vote of confidence that it isn’t just a pandemic-era boom. Today, Jennifer Carolan of Reach Capital announced at TechCrunch Disrupt that Outschool has raised a $ 45 million Series B round, bringing its total known capital to $ 55 million (see the full panel on Extra Crunch below).

The round was led by Lightspeed Venture Partners, with participation from Reach Capital, Union Square Ventures, SV Angel, FundersClub, Y Combinator and others.

The cash gives Outschool the chance to grow its 60-person staff, which started at 25 people this year.

Founder Amir Nathoo was programming computer games from the age of five. So when it came to starting his own company, creating a platform that helped other kids 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 at Clever, another edtech company and YC alum. The trio drummed up a way to help students access experiences they don’t get in school.

To gauge interest, the company tried in-person classes in the SF Bay area, online content and tested across hundreds of families. Finally, they started working with homeschoolers as an early adopter audience, all to see if people would pay for non-traditional educational experiences.

“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,” Nathoo said.

He added 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 $ 1.4 million seed round led by Collab+Sesame.

“We’d all been on group video calls with work, but we hadn’t seen this format of learning in K12 before,” he said. Outschool began rolling out live, interactive classes in small groups. It took off quickly. Sales grew from $ 500,000 in 2017 to over $ 6 million in 2019.

The strategy gave Outschool an opportunity to raise a Series A from Reach Capital, an edtech-focused venture capital fund, in May 2019. They began thinking outwards, past homeschooling families: what if a family with a kid in school wants extra activities, snuck in afterschool, on weekends or on holidays?

Today feels remarkably different for the startup, and edtech more broadly. Nathoo says that 87% of parents who purchase classes on Outschool have kids in school. The growth of Outschool’s total addressable market comes with a new set of challenges and goals.

When the pandemic started, Outschool had 1,000 teachers on its platform. Now, its marketplace hosts 10,000 teachers, all of whom have to get screened.

“That has been a big challenge,” he said. “We aren’t an open marketplace, so we had to rapidly scale our supply and quality team within our organization.” While that back-end work is time-consuming and challenging, the NPS score from students has remained high, Nathoo noted.

Outschool has a number of competitors in the live learning space. Juni Learning, for example, sells live small-group classes on coding and science. The company raised $ 7.5 million, led by Forerunner Ventures, and has around $ 10 million in ARR. Note earlier that Outschool is at $ 100 million in ARR.

“We provide a much broader range of learning options than Juni, which is focused just on coding classes,” Nathoo said. Outschool currently lists more than 50,000 classes on its website.

Varsity Tutors is another Outschool competitor, which is more similar to Outschool. Varsity Tutors sells online tutoring and large-group classes in core subjects such as Math and English. Nathoo says that Outschool’s differentiation remains in its focus of small-group teaching and a variety of topics.

As for what’s ahead for Outschool, Nathoo flirts with the idea of contradiction: what if the platform goes in schools?

“When I think about our strategy going forward, I think of new types of classes, international embedding and embedding ourselves back into school,” he said.

Outschool might use its growing consumer business as an engine to get into school districts, which are notoriously difficult to land deals with due to small budgets. But, to Nathoo, it’s important to get into schools to increase access to learning.

“Our vision is to build a global education community that supplements local school,” he said.

Startups – TechCrunch

Munich-based Holidu turns profitable amid pandemic; raises funding from former Booking.com CEO Kees Koolen

The COVD-19 pandemic has severely impacted the global travel and tourism industry. According to the United Nations World Tourism Organisation (UNWTO), the COVID-19 pandemic has caused a 22% fall in international tourist arrivals during the first quarter of 2020. It also predicts that the crisis could lead to an annual decline of between 60% and 80% when compared with 2019 figures. In spite of this devastating effect of the pandemic, Holidu turned profitable in May and since then generated seven-digit positive EBIT figures. It just raised funding from Kees Koolen – former CEO of Booking.com. 

Profitable Amid Pandemic

Holidu has announced that Koolen has invested more than €4M into the company from his personal fund, as part of a €5M extension to the €40M Series C round of the previous year.

Headquartered in Munich, Holidu is a global price comparison platform that lets people find, compare, and book vacation rentals all over the world. According to the company, the funding follows a period of accelerated growth for Holidu, despite the raging pandemic’s impact on the global travel market. 

The company claims that in July alone, more than 27 million users visited the Holidu website. This resulted in a 2.6x growth in year-on-year bookings and more than €130M of newly generated bookings that month.

Kees Koolen is a Dutch businessman and investor. He was the COO, CEO, and chairman of Booking.com from 2002-2014. Booking.com was acquired in 2005 by a US-based travel booking company called Priceline Group – later changed its name to Booking Holdings Inc. in 2018. 

He was an early Uber investor and helped Uber roll out internationally. Moreover, he was a founding partner at EQT ventures, and now he is active in driving the transition towards clean energy with his clean energy conglomerate Koolen Industries.

Koolen has been an active board member in Holidu since 2016, both during his time as a partner at EQT Ventures and later in his role as advisor to EQT Ventures.

“The COVID-19 pandemic is reshuffling the cards in the travel industry and Holidu is clearly one of the winners of the accelerated trend towards alternative accommodation”, says Koolen.

Pandemic pushes domestic

The company believes that this pandemic has caused a shift in users’ travel behaviour, with many preferring domestic travel. According to Holidu’s internal data comparing July 2020 with the same month of the previous year, users chose domestic travels, made more last-minute bookings, and preferred more premium accommodation choices.

“People had been locked in their apartments due to COVID-19 for a long time and we saw that once it was allowed again, people just wanted to travel. Many of them looked for safer nearby travel options, for which vacation rentals are ideal. We have focused on this segment of the travel market since our foundation and it makes us beyond happy that we have been able to help millions of travelers to have a great summer vacation this year.” explains Johannes Siebers, Co-founder and CEO at Holidu.

“At one point, we almost got overwhelmed by the large demand. Fortunately, we were able to react quickly thanks to the strong work of our team and the internal technology tools,” he adds.

Hoildu was founded in 2014 brothers Johannes and Michael Siebers. It was founded by the duo following a frustrating experience while booking a vacation rental for a surfing trip to Portugal. According to the company, they spent hours browsing through dozens of websites to find the right accommodation and realised that some of the rentals were offered on multiple sites for different prices. 

Holidu, currently, has a team of more than 200 people and closed its €40M Series C round led by Prime Ventures in 2019.

Image credits: Holidu

The post Munich-based Holidu turns profitable amid pandemic; raises funding from former Booking.com CEO Kees Koolen appeared first on Silicon Canals .

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Advertising is failing, thanks to Adblockers. Here’s how you can sell successfully to an audience without trying to shove an ad down their throat. https://medium.com/@manishmshiva/building-your-own-audience-is-profitable-than-advertising-heres-why-88bfc3aaf8c0

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How to sell our profitable subscription box business?

Hi everyone! Similar to the person a few hours ago looking for how to go after investment, we're looking to go after selling the whole kit and caboodle.

We're a CBD Subscription Box and have been profitable every month so far in 2020. We've listed on a site called MicroAcquire and received some decent interest on there but are looking to also list the business on other platforms. I'm also curious what multiplier we should be going after, even though I know that's an impossibly difficult question to answer. Our past 3 months of profit look better than YTD average profit and wondering if potential buyers will only look at the YTD average profit and not the last 6 months.

Finally, curious if anyone has actually sold (not just listed) a business on a site like Flippa and Empire Flippers. What was that experience like? Were you able to secure a high multiple there?

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Startups – Rapid Growth and Innovation is in Our Very Nature!