Today we announce our seed investment in Dux Education, an education technology company that is making afterschool tuitions online, accessible, and affordable. This is our fourth investment in the education space after Bibox Labs, Multibhashi and Habit Strong (formerly Concept Owl).
Education is a space that is very close to our hearts. Dr. Aniruddha Malpani, the principal and founder of Malpani Ventures believes education is the starting point of a better tomorrow. We actively support numerous social impact initiatives in education by providing non-equity, non-dilutive grants and continue to support the capital requirements of multiple initiatives.
Over the past few years, as education caught the mainstream attention of many investors, we saw rampant mis-selling, exorbitant pricing, and a general lack of empathy towards parents and students making us stay away from this sector. But when we met Rohit, Udit & Manika, we believed in their vision to bring education back in edtech.
Market opportunity & thesis
Education is of utmost importance
This report suggests India has over 260 million students enrolled in over 1.5 million schools. Education is the most critical aspect of a child’s success with almost 9 out of 10 Indian parents prepared to make financial and personal sacrifices to ensure their child receives a quality education.
Key drivers growing online education
The four key drivers of online education in India according to Omidyar & RedSeer are:
1) Digital adoption among families and individuals: ~160 MN households with active internet access
2) Awareness of EdTech: ~80% of students in K12 aware of EdTech
3) Willingness to pay for EdTech solutions: ~60% of aware users willing to pay for EdTech products
4) Funding in EdTech companies: $4.7 billion+ private investments flowing during CY21
Thereby causing the startup boom..
The broader edtech market in India as categorized by Blume Ventures
..combined with the funding explosion
The perils of rapid growth are a cause of concern
In a race to grab the most market share, we have seen many edtech companies try to optimize the pace of growth over the quality of growth. We see issues like mis-selling, forced selling, intimidation and fear techniques used by sales teams, false claims via advertisements, exorbitant pricing, the inability of parents to back out of a purchase, and many more.
All of this takes the education out of edtech and fails to fulfill the one purpose the industry has - to educate students and make them future-ready.
Why Dux Education stands out
In an industry where incumbents want to grow at any cost, and lock in customers for as long as possible, using any means they can, we were pleasantly surprised to know that Dux remains one of the only online education platforms to offer a very affordable INR 750/month subscription with an option to unsubscribe at will. Parents and students are not locked in and can stop their payments at will.
Although having subscriptions at will can be a double-edged sword, having churn as low as 2% shows the confidence the founders have in themselves and their product to keep continuing this way.
And not just the above, after 3500 hours of conversations with 2000+ parents, the founders started solving for the key issues in afterschool education:
Personalized learning – Solving for mentorship
Limiting classes to a maximum of 10 students makes classes interactive, encouraging peer-to-peer learning, and personalized focus of tutors on students for real-time doubt solving.
Focus on the student – Solves for exam performance
Students are enrolled in batches where a majority of the syllabus matches with their unit tests and mid-term exams to ensure they are prepared for their tests.
Transparency & PT meetings – Solves for feedback
Regular updates on child’s absenteeism, homework submissions to parents via WhatsApp first communication engine with the option for Parents or teachers to request PT meetings monthly to get face-to-face feedback on top of structured system generated feedbacks.
Content – Scope for improvement
We believe the problem of quality education has been solved by existing edtech players with content no longer being the differentiator. Today the differentiator for K12 is not content, but how the student learns. Having said that, there is always room for improvement and creativity when it comes to content.
Pocket friendly – Solving for affordability
Commitment-free and pocket-friendly options of INR 750/month/subject with students being enrolled for up to 3 subjects on an average do not put a dent into the parents’ pockets. This ensures parents can pay monthly, and are under no obligation to subscribe for multi-year courses, can pause subscriptions at will.
Dux Education founding team (L-R): Udit, Rohit, Manika
We believe that founders who have a deep commitment towards a cause can build category-defining businesses. We were amazed by the passion, commitment, and clarity that Rohit, Udit & Manika brought to our early conversations.
Rohit brings with himself 10+ years of leadership experience across growth, operations, & Finance. He was formerly the Country Head, Marketplace at Zoomcar, and part of New Business Initiatives at Ola. He is an SRCC & Symbiosis alumni. Udit has 14+ years of leadership experience across finance & business development. He was formerly the Head of Finance & Legal at MFine, Director of Finance at Zoomcar, with prior stint at EY. He is a Chartered Accountant. He is a Chartered Accountant. Manika has an MBA from Symbiosis and brings with herself 6+ years of experience across business finance & management consulting across McKinsey, Accenture, and PhonePe.
Progress so far and what lies ahead
Dux Education started in the middle of the pandemic and was in closed beta until March 2021. The company today has nearly a thousand students and a healthy supply of quality tutors. The demand is strong with 50% of its students from Tier I & II towns, 40% students from Tier III & IV towns, and 10% foreign students from Australia, the Middle East, Thailand, UK, US, and Qatar. The company is also in the process of securing partnerships to expand its international markets.
We believe Dux Education’s longer-term goals have a purpose, impact, and precision. If the company delivers on its vision, it will become a major player in the K12 education industry globally. We are thrilled to be a part of the company’s seed round, assist them in executing their vision, and watch how they change the world from front-row seats.