How does Outschool work and how does it make money?

Outschool, a newfangled education platform, offers various engaging group classes online for online education. It does not work like traditional classes, instead gives students a unique opportunity to explore their interests in-depth using an interactive live session held by various experienced educators on the platform. Today, in this article we’ll explore the Outschool Business Model in detail and get answers to our customary questions- “How does Outschool work?” and “How does Outschool make money?”.Understanding a company’s business model, investors’ details, revenue model, and growth rate gives a lot of insights into the in-depth working process of the company. To get in-depth answers, keep reading the article till the end and stay connected with our blog to enhance your knowledge on more such business models. So, let’s get started.

Outschool- The Beginning

Outschool was founded by Amir Nathoo in 2015. Homeschoolers were the first to discover Outschool classes but soon the students from conventional schools began augmenting their classing studies with online fun and unique online education that are completely based on their interests.

Talking about the founder, Amir Nathoo, he always wanted to start his own business and then he eventually found inspiration for a startup in 2007. He, along with James Brady, and Patrick Buckley, teamed up to start a business. For early investment, they approached Y Combinator, a seed investment fund that just started at that time in Silicon Valley. However, the three of them didn’t stay together for long. Amir started Trigger.io- a mobile app development platform, with Kirsty and then started up with Square in 2013.

In 2015, Amir founded Outschool with Nick Grandy and Mikhail Seregine after leaving Square that year.

Outschool- The Global Reach

Outschool works on its mission of inspiring kids to love learning. They do this by providing them with innovative learning opportunities outside their traditional classrooms from the comfort of home.

With this strong vision and seed capital from Y Combinator and others in 2016, Nathoo and his team built this platform and launched it in 2017. Since then, more than 60 thousand students/ learners have attended classes on this platform.

As per the Forbes information of 2019, Outschool continues to expand and raised $8.5 million in Series A funding from Union Square Ventures and Reach Capital. From 2019 to 2020, there has been an incredible surge in online education platforms and is the result of the widespread COVID-19 pandemic. During this time interval, Outschool saw a more than 2000% increase in their class bookings. In 2020, the company’s sales were around $54 million as compared to $6.5 million in 2018. The pandemic has turned out to be a profitable one for the platform as it has started making more than $100 million in annual run rate.

Outschool Business Model

Since the arrival of the internet, our lives have changed tremendously. It has transformed the way we communicate, to an extent that it is itself the basic medium of our everyday communication with people living away from us. In almost everything we do, we are using the internet e.g., ordering a pizza, buying any product, sharing pictures or text messages with friends over instant messaging everything is based on the internet. So is education transforming these days. However, many classrooms still rely on their traditional ways of teaching which are largely tech independent even though there are various ways of new technology that could help in improving the education of children.

Let’s consider the example of various K12 companies entering into the tech world ( here, K12 is an American expression that represents the range from kindergarten to 12th grade), and then left the space because it failed to disrupt the classic education system. However, there are many platforms offering MOOCs (Massive Open Online Courses) which are still surviving and not just surviving but also growing tremendously because of the quality of courses they have to offer to students and professionals. Yet, there has been a demand for one-on-one interactions between students and teachers, and the ones that provide these features are surviving and the rest have left the road.

To provide solutions to such problems for students, some companies have again entered the K12 space with a new marketplace-based approach. One of the best examples of such a company is “Outschool”. By many people, Outschool has been described as the “Netflix of Learning”.This platform gives students/ learners a new learning experience based on their (students’) interests where they have an opportunity to work with an expert teacher of the subject.

There is an incredible number of courses available in Outschool. Almost 10,000 live classes are available for the young ones in the age range of three to eighteen. Talking about the courses, then courses are available for all subjects- from kindergarten learning to chemistry and from language learning to cooking classes also. The course of architecture is made so engaging by adding a playful tone of Minecraft, a sandbox video game developed by Mojang.

There are many such platforms such as Udacity, that develops its special courses-nanodegree programs- on its own but Outschool is doing a different task. It is basically a marketplace of learning where teachers from all around the world, willing to upload their own course and teach at the platform, can reach out to the company and work at Outschool. To join the platform as a teacher, he/she has to apply for the post in the company and then submit a lesson plan to be reviewed by the Outschool team. Then the team decides whether the course is valuable or not and as per the course analysis the person is approved for the post. As a result of this business model, the platform is able to showcase thousands of courses. Over 1000+ teachers are registered on the platform and each offers a unique course structure.

Outschool allows students to pay an average of $18 to participate in a course. Also, the classes on this platform start from as low as $5 per week which is significantly cheaper than any other tutoring payment.

Teachers at Outschool earn up to $7000 per month and even more. Many have turned their Outschool work into a full-time job. The learning opportunities have always attracted people to keep teaching classes Teachers with unique ideas have turned their unique ideas of creating courses into a job that helps them in making a good amount of money. To become a successful teacher on the platform, one has to devote at least 5-10 hours per week to implement unique ideas. Once a teacher forms an initial student base, he/she can possibly grow their teaching business and turn this part-time job into a full-time venture. However, the teachers that have already worked on the platform say that if a person is looking for a guaranteed income through Outschool then this place is not for them. The most strenuous task here is to navigate the platform’s seasonability. There are times in a year like the summers where the students’ enrollment growth is usually slow so it is important to make the course stand out in order to attract enrollment.

How does Outschool work?

We have discussed the Outschool Business Model in detail, so let’s move on to answer the question- “How does Outschool work?”. To answer this, we must understand the major features of the business model. Down below are the two major features of the Outschool Business Model.

Passion-based learning

Every student has at least one weak subject in school and some others might have more than one. It’s absolutely normal to have a weak subject in school days. So, Outschool has a solution for this. The platform has adopted a passion-based learning approach by engaging students in the study material through an innovative, fun, and supportive environment.

Outschool helps learners to understand the concept in a fun way by making them learn their weak subject through Minecraft or any other such game which is likely to be a more engaging and fun way to make the student learn the concepts. These playful classes at Outschool can help engage students who may otherwise not be interested in attending their traditional school classes.

This model has turned out amazing for parents who are concerned about students not engaging with an important subject at school, they can easily sign up on Outschool and buy a course to make them learn the subject from a different and engaging perspective. Also, if the student is deeply interested in any particular subject then he/she may go for that particular subject’s courses on the platform to learn about the subject more deeply and enhance their knowledge to follow their passion. The platform is being used by students all around the world. Students from countries like UK, New Zealand, India, and Canada are signing up on the platform and participating in the courses actively.

One-to-one interaction classes

Lack of human interaction is the most important feature lacking in most other edtech platforms. Although the quality of MOOC courses has allowed them to survive in this tough competition. Today, the edtech companies are focused more on enhancing the technology of their platform using Artificial intelligence, machine learning, data science, and all but they are forgetting the most valuable feature that the students are looking for i.e., one-to-one human interaction classes. Students grab more knowledge when they have constant interaction with their teachers.

This is where the Outschool platform outperforms. Here, the teachers take classes through teleconferencing tools such as Zoom, Skype, Meet, etc. The video conferencing tools allows students to engage directly with teachers and share their doubts with them. Also, the presence of the rest of the class creates a social environment and creates relationships with kids who they may otherwise not have met. This platform has a different approach towards learning, they encourage students to interact and grow with people.

Who are Outschool’s investors?

According to Crunchbase information, Outschool is being funded by 13 investors. Out of these 13 investors, 8 are leading investors. The company has been successful in raising a total amount of $130 million in funding in over 5 rounds. Their latest funding was received on April 14, 2021, from a Series C round.

Just a year back, the total investment funding in the company was $57 million and now it is $130 million. The gap between these numbers clearly signifies the growth of the company during the pandemic. It has turned out to be a good opportunity for Outschool’s profit-making.

Union Square Ventures and Reach Capital are the most recent investors of the company. Here are the two most common reasons that motivate investors to invest in Outschool:

1. Outschool is driven by interest
2. Outschool is social

How does Outschool make money?

Outschool, an education marketplace for teachers, to share quality courses and, students to access these courses. It provides a virtual classroom in small groups for after-school activities of children. As the popularity of the platform is increasing, the company is growing subsequently. It has grown from 10% of its business to 50% which implies that the startup is generating more reliable and valuable revenue over time. Also, the company has turned out to be popular just also because it has little competition for K-12 students. Not many companies offer such real-time classes so Outschool occupies a unique niche in providing K-12 live courses.

The COVID19 pandemic has helped many online businesses to grow and one of these businesses includes Outschool. In 2020, the company’s liquid assets increased massively, enabling them to cover obligations, reinvest in the business, return the money to their shareholders, pay expenses, and they got many more advantages.

Now, the CEO of the company, Amir Nathoo is planning to grow his staff of 110 people to 200 by the end of 2021. In 2020, the company was launched in Canada, New Zealand, Australia, and the UK, so hiring continues to increase in these places. Before the pandemic, the platform had 1000 teachers but then within months, the number increased to approximately 10,000 teachers.

Outschool makes money by collaborating with teachers and allowing them to join the platform. Out of the price set by the teachers for their classes, 70% goes to the teacher itself and 30% of the total fees is received by Outschool as a fee. This means it makes its earning when the teacher makes one. Both the platform are teachers are completely dependent on the enrollment to course by students or learners. All the fees are paid through the platform only to preserve the spirit of the arrangement. The payment is given to teachers through PayPal. The payout amount for each section is: [0.7* price* no. of students]

In this article above, we have already discussed that, “How does Outschool work?”. So the readers might be very clear about the ambitions of the company. One of the boldest missions of the platform is to get in the schools as to be a part of the school curriculum as it would help low-income families access the platform easily. The company’s CEO says that enterprise sales are just a small part of their business but the main strategy came up as a response to the COVID19 pandemic. It is currently planning to offer B2B subscription models with various schools. It might use its presently growing consumer business as an engine to get into schools.

Busines model magic of Outschool

The Outschool Business Model has turned out to be very successful because of the unique idea and features that it provides. It grabs hold of the weakness that most of the online courses have, i.e., one-to-one interaction and passion-based learning feature, and then toiled hard on its model. Instead of offering generic online courses that most other platforms offer, Outschool (along with its teachers) focused on creating an immersive learning experience where students can follow their passion and have fun while learning. As already mentioned, the marketplace-based model made it capable of hosting so many courses on its platform and increased the chance that a student will be able to find something relatable and fruitful to enhance his/her passion for learning on the platform.

This platform is a life savior for the parents who cannot afford to send their children to schools. Students with wealthy parents can easily afford the studies along with extracurricular learning support. But these are inaccessible to poor ones. The ultimate mission of Outschool, according to Amir Nathoo, is to inspire kids to love learning. They are working to supplement local schooling with the taste of fun and social learning opportunities. These classes can effectively be used for after-school enrichment or for extra help in any particular subject.

If you are willing to launch an edtech platform similar to Outschool. Ncrypted Technologies has the right solutions developed by our capable and innovative workforce. We offer customized and innovative features as per your requirement to let you launch a successful edtech learning platform.