Startup Street: Another Edtech Startup Gets In On The Fundraising Spree
This week on Startup Street, a pay-as-you-get-placed edtech startup joins the blitz of fundraising seen in online education this year. More consolidation was seen in the housing startup space. And a parliamentary panel calls for a strong system to support startup financing. Here’s what went on...
Newton School Raises Seed Funding
Bengaluru-based Newton School, which provides full-stack coding courses online, has become the latest in a long line of edtech startups that are reaping the benefits of increased investor appetite in the sector.
The startup has raised $650,000 in early-stage funding led by venture capital firm Nexus Venture Partners. The round also saw participation from Unacademy founders Gaurav Munjal, Roman Saini and Hemesh Singh, U.S.-based startup platform Angel List, Upwork founder Srinivas Anumolu, veteran educationists Ajay Gupta and Sahil Aggarwal and Growth Story founder K Ganesh.
Newton School, which is a little over one year old, is providing software development training and helping their graduates get placed at a guaranteed minimum salary package. To attract students, it’s using an increasingly popular strategy of edtech firms to charge no fee until the candidate is placed with a salary of at least Rs 6 lakh per annum.
“Selected students are put through a power-packed six-month programme,” Nishant Chandra, co-founder of Newton School, told BloombergQuint in an interaction. “This full-stack development programme includes 1,000-plus hours of coding, 50-plus hours of soft skills training, live projects, and mentorship oversight—all part of a course designed with latest standards and taught by industry professionals.”
But the startup itself stems from another entrepreneurial adventure of Chandra and his fellow co-founder Siddharth. The two had earlier co-founder a video-based consultation platform called Bolo. During development, the duo noticed huge demand and enthusiasm for software engineering roles. Some students, according to Chandra, even felt like the education system failed to equip them with coding skills that would make them employable.
Smelling an opportunity, the two started Newton School, running a batch every two months. “Right now there are four batches going on simultaneously. In total, we already have 500 students studying on the platform,” Chandra said. He claimed that the first batch recently graduated with a 90% placement rate in companies like Unacademy, Rapido and Toppr.
The Covid-19 pandemic, too, brought behavioural changes and helped push people towards online education. “This behavioural change will ensure that liquidity inflow sustains but only in startups that are able to show growth patterns,” Chandra said.
The startup expects to break even and become profitable in the next couple of months. It is currently charging students 15% of their annual package whenever they are placed at over Rs 6 lakh per annum.
In the coming months, Newton School will use the fresh funds to increase user capacity and implement artificial intelligence to personalise courses based on a student’s needs. “The company plans an intake of 10,000 students in 2021 thus having larger intake than all IITs combined. Courses around android development, iOS development and analytics are also in the pipeline,” Chandra said.
Newton School’s funding is yet another story of how the edtech sector is grabbing investor attention this year. At a time when 40% of Indian startups are struggling to keep operations running, edtech startups have are flush with funds. Venture capital firms had invested almost $1 billion in edtech firms till July this year—over double of what the sector in all of 2019.
Stanza Living Acquires Student Housing Startup YourShell
Co-living operator Stanza Living has acquired student housing startup YourShell that has 600 beds across 19 centres, a statement said.
Founded in 2017, YourShell started its operation with 145 beds to provide easy-to-book, serviced, and affordable rental homes to students within the coveted North campus area of Delhi University. Currently, they have over 600 beds in 18 properties.
Stanza Living has an inventory of 55,000 plus beds across 14 cities. It is backed by marquee global investors like Equity International, Falcon Edge Capital, Sequoia India, Matrix Partners, Accel Partners, and Alteria Capital.
Parliamentary Panel Suggests Developing Support System For Startup Financing
A parliamentary panel on Tuesday made a case for a strong support system for financing the startup ecosystem in a bid to drive economic revival post Covid-19.
The Standing Committee on Finance, chaired by BJP lawmaker Jayant Sinha, also suggested that more sources of capital should be made available for startup financing and companies and limited liability partnerships should be allowed to invest in startups.
It said with adequate risk capital backing startups, they can provide innovative new services that can have a multiplier effect on the economy.
“The Committee believes and would urge that a strong support system to finance the startup ecosystem should be put in place to drive a sharp post-pandemic revival and sustainably high economic growth thereafter,” it said.
The committee further said under the current environment, given that the businesses are stressed for liquidity and valuations of companies have softened, there is a need to adopt a more pragmatic approach on applying fair market value principles in transactions between independent parties.
With PTI inputs