“Did not remote-control the business”
Edtech start-up Eruditus was launched in 2010 as an offline venture offering executive education courses in collaboration with global universities. But, till 2015, its reach remained limited to just one physical classroom offering with INSEAD, the only partner. It was then that founders Ashwin Damera and Chaitanya Kalipatnapu took the leap of faith to move to an online model. Since then, there has been no looking back. Over the last decade, Damera and Kalipatnapu have built an enviable roster of 55 university partners, including Columbia, Harvard, Cambridge, INSEAD, Wharton, UC Berkeley, IIT and IIM, offering courses across 80-plus countries in multiple languages such as Spanish, Portuguese and Mandarin. After the latest funding round of $650 million in August, Eruditus is now valued at $3.2 billion.
The Idea!
Ashwin Damera (A.D.): As soon as I sold my previous company Travelguru, I was looking to get into something that would have a bigger, lasting value for society. After some research I short-listed healthcare and education, leaning more on the latter. A former Travelguru colleague introduced me to Chaitanya Kalipatnapu, an INSEAD product and employee. His focus was on delivering quality education to Indians and mine was on scaling it further. The idea was to bring the faculty to India to teach executive professionals. When we were ready with our first module in strategic marketing, Harvard was doing in-class teaching and ISB had faculties from LBS and Kellogg. We were motivated to put together the best of faculties and practitioners, and offer the courses at one-third of the market cost. But our efforts for a product market-fit bombed with only 12 sign-ups and we had to trouble-shoot from there. We then decided to approach top universities from abroad.
Early Struggle
A.D.: From 2010 to 2016 we remained bootstrapped. We approached top universities and they declined to come on board. Finally, thanks to Chaitanya’s reputation, INSEAD agreed to do a programme with us for one year. We fired up the marketing, tele-sales and programme advisory channels with ourselves multi-tasking and our spouses pitching in to help.
Our first success was with 55 participants. After INSEAD, Wharton School approached us and with each year we kept tying up with more schools. In 2020 and 2021 we have signed more schools than in the last nine years. But we were clear we didn’t want to scale up until we saw the learning outcomes.
In 2015 we decided to go online. At that time we had MIT, Columbia and Dartmouth with online courses. To partner with them, we needed to create a course in the U.S, hire teams there, update on marketing and learning statistics. At that point we were worth $7 million. We decided to raise $4 million. All Series A guys we met declined to put in money. We were made to understand that as long as we were classroom-based, we can’t scale. We also needed to sign long-term contracts with universities.
Make Or Break Moment
A.D.: Our first programme with INSEAD. If we hadn’t got 55 enrolments then, we wouldn’t have been around. Happy customers brought traction. We believed in the product and continued talking to companies, improving it continuously.
The Business Model
A.D.: The business model is a simple, two-sided platform. We have 55 universities. We sit with the faculty, design the course with them, film their content and video lectures; we write our own simulation and assessments, thereby customising it. All courses have live interactions with the faculty and certification is given by the university. We enroll students from 80 countries — 65% from outside the U.S. Around 20% are taking courses in languages other than English, including Spanish, Arabic, Portuguese, Mandarin etc. This year we will introduce French and German. We collect tuition fees from students. There is some commercial agreement with the school — it is different for different universities.
Tech Challenge
Chaitanya Kalipatnapu (C.K.): Though our roots are in India, we are a global company with 1,553 members. We have a stable tech stack to run these programmes seamlessly. Our global presence makes it easier to curate content and there are practitioners in local languages to give support. We have a sturdy distribution model.
HR Challenge
C.K.: Initially, our virtual presence made it difficult to hire people. In 2014 we were less than 30. Back then we were running five programmes. But, 2015-16 was a critical time because we were trying to take the product from the classroom and deliver it online without losing the quality. Our investors also helped us in finding global talent and our recruits have been with us through the last eight years.
Marketing & Sales Lessons
A.D.: Everything is digital and based on data. We market in 80-plus countries, with students across Google, Facebook and LinkedIn. At any point we will be running two-billion ad sets and optimising on the same. Learnings from different markets are different. In the U.S., students read the brochure and there is very little interaction with the programme advisor. In India if we don’t speak to students, they don’t enroll. They discuss the cost promptly and ask for a discount. So, marketing technology varies with countries. Latin America is predominantly on Whatsapp; the U.S uses FB Messenger widely.
C.K.: The presence of local teams in Shanghai, LatAm, West Asia and the U.S works well. They understand the context and provide required support. We don’t remote-control the business from a single destination.
Managing Investors
A.D.: After Series A bombed, I travelled to New York and met one of my MBA classmates there. After discussion, he was ready to fund us with $1 million, purely trusting our credibility — our valuation was at $30 million then, but the business was transforming from classroom to online with 50% in India and 50% from across the world. We could achieve that with digital marketing and programme advisory from Mumbai. Soon we were able to sell that to some investors. Bertelsmann & Co. took a bet in early 2017 in our Series B. We look for balance sheet participants who can be with us long term. Many university partners are investors; so they get the idea.
When Did You Think You Had Arrived?
A.D.: Never. ‘Arriving’ means reaching a destination. We don’t know our destination. We are continuing to build. It is a large market.
Riding Through Toughest Times
A.D.: The apprehension comes when investors differ from our point of view. At one point, 20% of our programmes were classroom based. We pondered on cutting back, waiting. But soon Chan Zuckerberg Initiative, Leeds and Sequoia Capital came into the picture. No massive disaster yet.
C.K.: Challenges are relative. During Covid we had to shut down. Once back, we had to build business continuity. There were challenges that have managed to shape the company — of course team members, investors and luck have been with us.
What Next?
A.D.: We have acquired iD tech and entered the K12 space, teaching skills such as game design, e-sports etc. We are looking at learning analytics — adaptive learnings based on individual strengths etc. Online degrees across different subject areas like journalism, medicine, real estate are also on the cards. Getting to Tier-III cities is on the roadmap as well.