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The Missed $30 Billion Opportunity

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When I posted Study, but with a Difference two years back, my friends and I had an incredible idea that was going to change the way students think of education in India. We wanted to create a platform where students and teachers can find each other. We soon moved to a platform where students can access good-quality study material for free.

I am about to take my 12th grade board examinations next week, so over the past few weeks, I have been re-thinking the Class Rebels business model.

Coming from a Science stream, I took tuitions for Physics, Chemistry, and Mathematics throughout the year. For Mathematics, I got a great teacher who charged ₹ 500 per hour, roughly ₹ 6,000 per month, about ₹ 72,000 for the year. In Physics and Chemistry, it was an ₹ 80,000 per year each. That means my parents spent ₹ 2,32,000 on my tuition fees.

Most of my friends were taking extra coaching for entrance exams at Aakash or VMC or something which made their total a little more of about ₹ 3,00,000. Considering that I’m talking about the most privileged students in Delhi, it would be safe to assume an average of a conservative ₹ 1,00,000 per student. There are some parents who are spending tens of lakhs of rupees, and there are parents spending no money on extra tuitions, so I think ₹ 1,00,000 is a fair estimate.

According to Zee News, there were 10,00,000 students who appeared for the 12th grade board exams last year, and 13,00,000 for 10th grade.

Parents of twelfth-graders are therefore spending 10,00,000 students * ₹ 1,00,000 per student = ₹ 1,00,00,00,00,000 (that’s 1 kharab!), which is approximately USD 1.5 Billion. Considering that the families of tenth and eleventh graders do not spend this much, we’ll double this number for the cumulative total of expenditure for grade 6 to grade 12 tuition fees.

That’s it. Indian parents are spending USD 3 Billion every year. And this is the most conservative figure I could come up with.

Now, if we were to start a company that helps students and their parents find the best tuition teachers online, connect with them and share study material, perhaps an online classroom that goes beyond the classroom, we’re talking about a $30 Billion opportunity in ten years.

That’s more than HDFC Bank’s market cap! There are actually just 3 companies in India with more market cap than $30B. That’s how much we’re talking about.

So, when my boards are over, Class Rebels will switch to a new business model revolving around finding the best teachers for students. Students will still be able to access high-quality study material for free, watch videos explaining concepts, but when they’re stuck, they will be able to discover and book classes with tuition centers and professors.