Mumbai-based online tutoring startup WhiteHat Jr (WHJ) which teaches coding to young children has come to be known for many things in a short period of time.
For being one of the few startups to touch USD 150 million in annual recurring revenue within 18 months through meteoric growth since its inception. For making coding learning a new, niche edtech category in India. For getting acquired by the world’s most valuable edtech startup Byju’s for a whopping USD 300 million.
It’s also the only company that made tall promises of kids getting plush jobs in big tech companies in its controversial marketing campaigns that attracted a truckload of negative publicity. The startup is also famous for its notorious online reputation management team that allegedly takes down people’s social media posts talking bad about the company. And probably WHJ is only one among the new breed of startups to slap a multi-million dollar lawsuit against two of its critics.
Founded in December 2018 by Karan Bajaj, former South Asia head of US entertainment major Discovery, Inc. and a novelist with three books to his name, WHJ was acquired by Byju’s last August. Five months down the road, WHJ is facing flak from social media users over the past marketing blunder, allegedly censoring negative comments, and suing software developer Pradeep Poonia, who spoke against the company and posted the company’s internal chats on social media.
Despite all the ups and downs, the company has been able to maintain its growth trajectory and expand to the overseas markets, which now contribute to half of its almost 200,000 paid subscriber base. In an interview with KrASIA, Bajaj spoke at length about the company’s journey, merger with Byju’s, the controversies it faced, and its growth plans.
KrASIA (Kr): Did your literary background help you in your entrepreneurial journey in any way?
Karan Bajaj (KB): When you write a novel, you have to have a very high level of conviction in your idea, so that you will turn a blank page into a 300-page novel that publishers will respond to and readers will buy eventually. Months and years go into an endeavor, for which there is no guaranteed outcome. I have gone through that exercise three times. I wrote my first novel in 2008, then in 2010, and then again in 2015. A startup, in a way, is the same thing. When you start, it’s a very formidable undertaking. You really have to have the conviction that eventually the idea that’s in your mind will turn into an organization that will deliver impact over a very large scale. Since I had taken upon a journey of creating something out of nothing before during my writing days, I was a little bit confident about it this time.
As a novelist, you are also used to a lot of rejections and ups and downs. My third novel, for example, got rejected 60 times before Penguin Random House picked it up. I was kind of prepared for that when I entered entrepreneurship because by nature creating something from scratch is very hard. And then once you create it, almost every day, there are obstacles that come in your way.
Read this: Coding, campaign, and controversies: WhiteHat Jr’s journey from highflyer to the eye of storm
Kr: How did you manage to grow at a break-neck speed?
KB: I believe startups should have extreme patience in the beginning till they get a product that users like. For the first seven months of the company, we were under the radar. We spent very little money, had less than 10 people in the company, and did a lot of experiments to get the product right.
I started the company in December 2018, launched the first version of the product in one month, got a lot of feedback from the users, and made the product better and better over the subsequent months. By then, more users were coming into the funnel, and more users were staying.
After that, you have to be very impatient in how you scale. At that time in edtech, there were tens of players already, who had raised a lot more capital than I had –USD 1.3 million in the first round and 10 million dollars after.
And anybody could have done this (WHJ’s) model if they had (focused on it). So once I launched the product, I scaled it exponentially. And it happened because of word of mouth. The customer acquisition costs were also low. So as a result, we reached INR 1 crore (USD 136,000) of monthly revenues in June 2019, and then we kept at that pace for a while before we went into the scaling phase, hitting INR 100 crore (USD 13.6 million) a month in May 2020.
During that period, the organization went through a significant transformation, because we went from 100 people-team to almost a 5,000 people team. We focused on curriculum, hired excellent teachers, ensured both sales and support teams were very good, created seamless refunds, and renewals, and the fact that everything should be really tightly knit.
Kr: Why did you go ahead with the merger with Byju’s?
KB: The acquisition was not a part of my plan at all. I was raising USD 50 million Series B in April last year. And then Byju (Raveendran) contacted me via WhatsApp himself in June, and then we had a conversation on a Zoom call. At that time, I was about to sign the term sheet. So I had a compressed amount of time to make a decision. And we closed the acquisition in six to eight weeks’ time.
I felt like anything that I want to accomplish, I would be able to do faster with Byju’s versus going alone. They had the same vision of taking the product globally and a similar bias towards execution. We were not core-edtech experts, while Byju’s had been in education the whole lifetime. So we felt that there was a lot to learn from them. We’ve been acquired barely five months in, and already, our maths curriculum teams have merged.
We were doing a maths curriculum anyway (before the acquisition), after coding, and Byju’s team helped us create it faster. We did an in-market launch two weeks ago. And now we’re doing it for other subjects (across grades).
Byju’s has good, high-quality content recorded on its app for self-consumption, while we are very good at live interaction with a teacher. And there are roles for both. We are leveraging Byju’s content creation expertise to power the live component for it.
Kr: What are your growth plans for this year?
KB: We will go into other subjects beyond coding and maths. And we are still working on what the subject should be. We are launching new initiatives in India before taking them to other markets. For instance, for the first time, we are doing classes with one teacher and six students. So far, there were only one-on-one classes between a teacher and a student.
We entered the US, UK, Australia, and New Zealand last year, and are now scaling in these markets after the early success. We’re doing our first local language pilot right now in Brazil and Mexico, wherein local Spanish teachers are teaching Spanish kids and Mexican teachers teaching Mexican kids. So far, Indian teachers were teaching kids in the US, UK, Australia.
We adapt the curriculum for every market, depending on the unique requirements of the market. For coding, there is no curriculum anywhere in the world, we created everything from scratch. For maths, we use the US core curriculum as a starting point and customized it depending on the market.
Right now, we need to just do enough to not distract the organization too much. So we are focusing on our top seven markets right now. We will go after the next seven markets after we successfully establish these markets. Southeast Asia is not in the top seven markets as of now, but there is a high possibility that we would look at the region.
Kr: You have also gotten into the B2B segment with partnership with schools. What are you aiming for?
KB: We had a lot of inbound responses with schools because the new education policy mandates coding for kids. So we decided to give them our curriculum and train the teachers. We’ve partnered with 100 schools right now and capped it at that because we first want to get the product completely right with these schools. The schools are paying for it, grade-wise. We are running it as a controlled experiment, under which we currently have probably 10,000 school kids.
Kr: WHJ has witnessed a lot of criticism for the controversial marketing campaign. Is there anything that you think maybe you could have done differently?
KB: I think, as an entrepreneur, every day you reflect on how you could do things differently on everything. So yeah, absolutely.
Since the company was hyper-focused on product quality we made mistakes about some social media posts. I think the equal emphasis should have been on building strong compliances in house and reviewing everything in marketing versus just people posting things.
Some interns thought it was funny (the Wolf Gupta moniker), and they put it on some creatives for social media. I don’t want to justify why we did it. But I also feel like, when you’re scaling so fast, eight or 10 pieces of creative out of 1,000 (can go wrong). But we’ve learned. I wish we could have done that better. But the funny thing here is that all of the marketing stuff that’s been pointed out was fixed in June. But all of these things happened after Byju’s acquisition, so it always makes me feel that what is the motivation behind it.
Kr: WHJ has also been criticized for alleged fake reviews, deleting negative comments from social media, and suing Pradeep Poonia who spoke against the company. How have you been navigating through all these things?
KB: These things (controversies) are temporary. Even this legal case is not about responding to any criticism. It is about an illegal breach into our system and putting information about our women teachers, their names and faces, in the public domain. As long as that doesn’t happen again, our stance would be to respond to anything which is helpful by making our systems better internally and to ignore things that are not helpful.
So I believe we should just get stronger internally. It’s all inside out, not outside in. I am not focusing on how to change the media narrative. I am more focused on how to use it to make ourselves stronger. I have used that time to articulate the values of the company very deeply for our employees.
And our product is kept getting stronger. I think the ability of the company to stand strong through all of these ups and downs is because parents and kids love us and the teachers are deeply impacted. So as long as the people who are actually using the product are happy, we can go through a lot. The company that grows fast will always attract commentary.
People like us who are thrust so fast into the limelight have to be perfect in every way. So we are making all systems like marketing, legal, and compliance as strong as our product quality systems. Over the next three years, we are aiming to reach one in three kids in the world and create 100,000 teaching jobs from the current 11,000.