(Bloomberg) — In India’s cutthroat online-education market, one contender is going for market share with a price point that’s a fraction of the industry norm: about 13 U.S. cents per 1-hour live interactive class.
Tutoring unicorn Vedantu Innovations Pvt. is betting the move will make its lessons accessible to millions of students outside the more affluent Indian cities, shaking up the booming industry. The startup, backed by Tiger Global, Coatue Management and GGV Capital, will start classes at the new price point of about 10 rupees on average this week. Its users thus far have paid upward of 60 rupees.
The Bangalore-based company is trying to race ahead of rivals such as market leader Byju’s in the country of nearly 1.4 billion, where the popularity of online classes is soaring after schools and tutoring centers were forced to shutter their doors during the pandemic. Vedantu is seeking to add users as it works toward a potential initial public offering planned for 2024, Vamsi Krishna, co-founder and chief executive officer, said on a video call.
To get the new lower price, Vedantu customers will need to commit to an annual subscription that costs about 5,000 rupees for tuition on everything from math to English. India’s online learners currently pay about six times more, with Byju’s charging 30,000 rupees annually for some of its programs.
“For the last year, we’ve been trying to crack the price barrier to reach students in smaller cities and towns,” Krishna said. “Affordability is as vital as reach.”
Vedantu wants to hit 1 million paid users by mid-2023, up from about 250,000 currently, he said. The classes will combine expert teachers’ pre-created content videos with live tutoring, and students will be able to interact with teachers also after the lessons.
The company pioneered live-tutoring services in India eight years ago, when the country didn’t yet have speedy 4G mobile services. Krishna, 38, and three fellow founders started Vedantu after shutting an earlier offline teaching venture because scaling it up was difficult. The founders are childhood friends and all graduates of Indian Institute of Technology.
Vedantu offers tutoring for K-12 students in yearlong programs and helps customers prepare for entrance exams for coveted engineering and medical schools. It also offers classes in public speaking, entrepreneurship and other subjects. In addition to paid customers, more than 35 million users from over 10,000 cities in India and other countries access its free content.
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