Ukrainian startup Preply has closed a new $10 million round of funding. The startup has exceeded $15 million in investments. The editor of AIN.UA asked Kirill Bigai, founder and CEO of Preply, how the business has changed over the past few years, how the project will develop in the future, whether it felt the impact of coronavirus.
You raised your previous $4 million round in 2018. How has the service changed since then? Tell us what has changed, improved.
After the last round, the company’s revenue increased by more than five times. The number of students and tutors on the platform is growing at a similar pace. Preply has strengthened in the main markets of North America and Western Europe.
We also greatly improved the quality of the product at all its stages and launched such important parts of the user experience as a video-chat platform for lessons and a mobile application.
In 2019, we opened a new office in Barcelona, where we are actively recruiting employees. The team has grown, and today Preply has a team of more than 30 nationalities from all over the world.
What are Preply’s key metrics now?
We continue to look at the company’s key financial metrics (turnover, income, expenses, marginality), platform usage (number of active students, tutors, hours of tutoring on the platform), engagement (number of lessons per student or tutor per week). And, of course, we take into account unit economics metrics: cost of attracting a student or tutor, total income per student or tutor.
What markets are major for Preply now? Where do you make the most money?
The U.S. and Western Europe are the major markets, but we are also active in Asian and Latin American markets.
How big is your team?
We have a multicultural product that brings together tutors and students from around the world. The same goes for the team – currently, Preply employs 125 people in Kyiv and Barcelona. The team of top management is unchanged: I am as CEO of the company, CTO Dmytro Voloshyn, and Head of Design Sergey Lukyanov.
How are you going to use the funds raised?
We will use $10 million to achieve several objectives. Firstly, to develop a mobile application on Android and iOS. It will allow students to find teachers more quickly, communicate effectively, and consequently – to learn.
Secondly, in terms of product development, Preply is moving from an exclusively market model to a multifunctional platform with a curriculum, homework checking, and productivity assessment tools. Additional funding will strengthen these functions. Our tutors and students will get the most out of interactive online lessons.
A part of the funding will also be used to open a new office and hire staff.
You have two offices in Kyiv and Barcelona. Do you plan to expand to new locations?
Yes, we plan to open an office in the United States by the end of 2020. Our goal is to expand our presence in the online education market, mainly in North America, France, Germany, Spain, Italy, and the UK. At the same time, we will be expanding into Central Asia and Africa. In this region, we rely on a mobile application.
With the advent of the crisis, everyone is talking about education, courses, etc. How did it affect Preply’s metrics? Is the influx of new users large, or is it a myth and everyone is just watching Netflix?
Due to this situation, hundreds of new tutors and students have joined our platform. In some regions, the website traffic has tripled compared to the statistics of January 2020. The flow of requests for online training continues to grow. We are working with tutors whose language schools have temporarily closed due to quarantine. Professionals who previously preferred the remote job also contact us.
Currently, the main incentive for professionals is to keep regular employment, not to lose income, and to motivate the audience to learn. And Preply’s strategy is to develop and grow with clients under any circumstances.
