How ed-tech firm Careers360 plans to open new revenue streams, boost profitability
Education-technology platform Careers360 is creating new revenue streams and adding more business verticals to bolster its profitability and reach out to a larger pool of students in the country.
"We want to be in every space where a student aspirant in the age group of 16-24 years is sitting, and that remains our strategy," Maheshwar Peri, founder and chairman, Careers360, told TechCircle.
Launched in 2009, Careers360 is operated by Pathfinder Publishing India Pvt. Ltd. The New Delhi-based company—which is one of the few profitable ed-tech firms in the country—caters to students looking to pursue education in engineering, management, medicine and law streams. It is now working on bringing colleges that offer other graduation courses under its platform and also wants to get into distance learning in coming months.
"In India, there are people who cover MBA education, medical education, engineering education, but there's hardly anyone who covers the graduation college—which 80% of us go through. Careers360 has started working on that," Peri added.
In May, the company launched a new vertical called 'Study Abroad'. Through this, Careers360 is creating a pool of students who want to study abroad and passing that information to universities who seek such information. It recently hosted its first virtual fair, called G-Lap (Global Live Application Platform) where 45 colleges and about 6,000 students came in and discussed over a period of three days. It did not charge students for the fair, but colleges and universities had to pay for the event.
Careers360 has been running the 'Degree Colleges' vertical as a pilot project since the first week of July, and hopes to formally launch the vertical soon. According to Peri, the company has been working on this vertical for seven years, and is finally ready to go live with about 17,000 colleges.
The new vertical will provide information on the players in the market (zone and city wise), the kinds of courses they offer, the opening and closing cut-off rank, fees, infrastructure, placement and end results such as what students do after graduating.
Business model, new revenue streams
Careers360 counts Ranjan Pai, chief executive and managing director, Manipal Education and Medical Group (MEMG), venture capitalist Mahesh Murthy and Satya Narayanan R, founder of education firm Career Launcher, as its investors. In January, it sold around 10% stake to education assessment firm MeritTrac for an undisclosed amount. Peri, Laxmi Peri and Naveen Goyal, all promoter directors, together own about 75% of the company. Other investors hold the remaining stake.
For students, Careers360 has a few research-based premium products ranging between Rs 499-999. Last year, almost 60,000 students paid for its products. With more new products in the pipeline, it expects 4-5 lakh students paying for the offerings in years to come.
"A total of 15 million students are visiting Careers360 and our 100% subsidiary Entrancecorner every month. There are about 300 clients advertising on our platform," Peri said.
The company posted revenue of Rs 24 crore in 2015-16 with earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 30%. Nearly 85% of its revenue comes through advertisements and 15% from students.
Though advertising contributes a lion's share to the company's top line, Peri expects Study Abroad and Nopaperforms—the Mumbai-based online enrollment startup which it acquired last year—to open new revenue streams for the company.
Nopaperforms is a SaaS-based offering that will enable colleges to go online and sell their application forms. It will help colleges manage the entire systemâ€“right from application to the admission stageâ€“online by collecting the money, creating a payment gateway, passing on the money back to them, and more. "Colleges will get the centralised data, and they can actually slice and dice the data as per their requirements."
By the end of this year, the company expects to have 150 colleges on the Nopaperforms platform, and at least 1,000 colleges in next three years.
"The moment we achieve 1,000, and on average each college has about 4,000 applications. This means we are talking about 4 million application forms. Revenue per form is between Rs 60 and Rs 120. The day we achieve that, Nopaperforms is going to be a big revenue stream for us," Peri believes.
By 2019, Pathfinder Publishing expects to do about Rs 150-200 crore in revenue and maintain a healthy EBITDA margin of 30%.
Industry observers say growth is possible in this segment as companies can afford to differentiate themselves on the back of content and create customer stickiness.
"The beauty of ed-tech is that once you have the content and you get a customer to hook on it, then it becomes recurring income only with minor changes," said Anil Joshi, managing partner, Unicorn India Ventures. "Everyone is fighting for that same set of students so that is a challenge in India. I think Careers360 has been able to create a differentiation for them and achieving that critical mass have led them to be a cash-positive and a profitable company."
Like this report? Sign up for our daily newsletter to get our top reports.