In the first month of acquisition, WhiteHat Jr's revenue run rate was $220M: Karan Bajaj
Karan Bajaj, Founder & CEO of WhiteHat Jr, shares his thoughts on the company’s revenue run rate doubling month-on-month after acquisition by BYJU'S and teaching math along with coding to students
When news broke that Think and Learn – the parent company that owns and operates education technology platform BYJU'S — The Learning App — acquired WhiteHat Jr for $300 million, it marked just another milestone for the founder of the startup, Karan Bajaj. Founded in 2018, WhiteHat Jr is an ed-tech platform that teaches students coding through one-on-one video classes with instructors. Commenting on the acquisition Bajaj says, “At the time of the acquisition, we were at a $150 million revenue run rate, with very little funding. The product was loved by the kids and their parents and purely on the basis of word-of-mouth, we were able to scale the business. Similarly, on the teacher’s side again we spent almost nothing acquiring teachers. The growth has been significant without spending too much on user acquisition and the renewal rates are high.”
Revenue Run Rate: From $75 million in June to $220 million in August
The implementation of the lockdown saw significant growth in adoption of a digital platform with ed-tech platforms seeing an uptick in traffic and it was no different for WhiteHat Jr which saw its revenue run rate doubling month-on-month. Bajaj states, “We were doubling month-on-month before the lock-down. We went from Rs 1 crore in revenue to Rs 10 crore in revenue before the lockdown and since the lockdown, we continued doubling. When BYJU'S approached us in June our revenue run rate was at $75 million, when the acquisition was completed in July we were at $150 million and in the first month of acquisition, in August the revenue run rate was $220 million.”He continues, “I don't know if I can attribute the revenue growth to the lockdown. More people are interested in free trials than before, but converting the customers at the end of the free trial becomes a little more challenging given the economic uncertainty.”
Before Bajaj turned entrepreneur, he helmed Discovery Networks in India. Starting his career as a marketing professional, Bajaj also worked as a consultant at Boston Consulting Group. In the midst of his professional journey, he also took time out to train to become a yoga instructor and author three novels. For someone whose world view is shaped by Buddhist philosophy, Bajaj says his innate curiosity had him pursue diverse interests, starting each journey as a beginner, learning new things, and reaching his potential with a complete single-mindedness. And it was not different with WhiteHat Jr for Bajaj, as with no tech experience he had to go back to learning about this space.
A mantra Bajaj believes in is the Machiavelli quote, 'Make mistakes of ambition and not mistakes of sloth’. Adapting this to his journey, he says, “Action is the code of the entrepreneurial life. You make the product, launch it quickly, you get an iteration then launch the product again and keep scaling it up. Once you figure out a good product then be very relentless in scaling very fast.”
While this thought process could explain the scaling up of WhiteHat Jr, a challenge scaling up has been maintaining the quality of delivery of the product and the post-sale service experience. Bajaj says that a strong team, particularly in the middle management has helped the company absorb the pressure of scaling without the customer quality dipping. In fact, he says that in many cases the quality actually improved when WhiteHat Jr scaled because the robust systems were set up to scale. Currently, WhiteHat Jr has over 4 million subscribers globally, of whom around 100,000 students are paid subscribers, with the maximum traction being seen from Grade 1 -9 and focus on building Grade 10-12. As a company, WhiteHat Jr scaled up significantly from a seven-member team to 4500 employees with 9,500 teachers signed up. In terms of revenues, 50% comes from India - with non-metros contributing about 65% and 35% from metros – and 50% from the international markets of USA, UK and Australia. WhiteHat Jr also recently expanded to Singapore and New Zealand.
WhiteHat Jr recently released its first TVC which was done by Taproot Dentsu. The tonality adopted for the TVC is fun and exciting to reflect and build the premise to children that the brand and product on offer was fun to build stuff. Asked about the marketing spends Bajaj says, “I see cost as a percentage of revenue and the marketing cost has actually gone down. The increase in spending is disproportionate to the increase in revenue.”
Synergies with BYJU'S
Bajaj states that while WhiteHat Jr strength lies in live, one-on-one, one to two, and small group classes, BYJU'S expertise lies in explaining concepts in subjects such as math and science. He adds, “I would be the first to admit that I am new to the education industry while Byju (Raveendran) is an educational expert. We will learn from his educational background and I am looking forward to learning from him personally.”
Moving beyond coding, WhiteHat Jr next focus area is math which ties in with BYJU'S strength. The ed-tech platform’s expansion plans into new markets also get accelerated due to BYJU'S international presence. Bajaj says, “We are cash-flow positive in India and USA. In addition to BYJU'S investing in the business, we are using the acquisition money for three things - entry in new markets which takes some time to stabilize; new subjects like Math and new channels like exploring B2B. All this takes time to set up and that is where the investment is being used but the core business is well run, profitable and cash-flow positive.” He adds, “We focused on coding as a category and have barely scratched the surface globally. For the next three years, we will focus only two categories worldwide where we are bringing a completely new thesis. We don’t want to enter into a frenzy of trying to do too many things. Focus is the biggest weapon of a start-up.”
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