How two CA's & a tech guy founded an EdTech startup training thousands of students for CA exams
- Hi there! I am Sriram Somayajula a Chartered Accountant and Entrepreneur from India.
- In 2017, I along with my co-founders Suraj Lakhotia, a fellow CA, and Sarat Velumuri, an engineer launched an EdTech startup IndigoLearn.com - India's best CA prep destination which focuses on teaching finance and accounting.
- Here we combine animation with advanced teaching tactics on a digital platform that is accessible to everyone aspiring to crack what’s considered one of the toughest competitive examinations: chartered accountancy.
- Today we are a team of 15 with 80,000 plus registered users in 300 plus cities & towns.
- Here is my journey.
When most of my peers were exploring the science and engineering field, my father who is also a CA inspired me to be different and pursue a qualification in commerce.
After thorough research and evaluation of Commerce-related qualifications, I decided that I also wanted to be a CA, and there started my CA journey!
After completing CA, I got placed from the campus as a Management Trainee in Agro-Tech Foods Limited.
I soon realized that I did not want to be stuck in accounting and wanted to expand my horizons. So, after a year I quit my job and prepared for the MBA entrance exams. I got through a few good B schools and I chose ISB.
Post-MBA, some clarity emerged, and after my first post-MBA job (in my late 20s) a lot more clarity emerged.
Big idea but family responsibilities held me back
Fast forward to 2013, while working at Coromandel International Limited (a US$ 2 billion fertilizer company), I had the big idea of online learning and was actively looking at the space.
By now I had also met one of my co-founders who is also a CA.
Over the course of our careers, we had interacted with several young professionals and we discovered their lack of readiness for the job market. This was because a lot of them had gone through assembly line kind of coaching institutes.
I almost started off in 2015, but my family was concerned by my lack of experience in business and of course, forgoing a steady income.
Taking an entrepreneurial leap
To maintain truce in the family; I decided to gain some start-up experience before starting out on my own.
In 2015, I joined a furniture startup Furlenco as Vice President in Finance.
By now, I had met both my co-founders; Suraj Lakhotia, a fellow CA and Sarat Velumuri, an engineer.
We tested multiple hypotheses with various student groups for over 3 months and interacted with several entrepreneurs in Ed-tech and related spaces over this period.
While we did some initial research, we all believe that one can make things happen only when one is neck-deep into it; otherwise, it will always remain a side business/hobby and will never scale.
We felt that it was a ‘Now or Never’ moment and in early 2017, we finally quit our jobs and launched IndigoLearn with the aim of changing the way Finance & Accounting students (starting with CA students) study and prepare for their careers.
Bootstrapping the business & starting out
We started off in early 2017 with zero outside funding and for the first year, we bootstrapped by putting together US$ 50,000.
Of course, we all did some basic financial planning to ensure we had enough savings to last a few years without compromising on basic requirements/lifestyle needs.
Being accountants, we were very keen to start monetizing from day zero. Irrespective of the amount of revenue, we were very clear that the path must be revenue-driven and not vanity-metrics-driven.
We built a very basic website and had a basic 3rd party SAAS-based tech when we launched our course in April 2017.
Technology is a very important component in a startup; but in Ed-tech, Ed comes before tech. If your teaching is proper tech will help you scale but without quality teaching, tech cannot do anything.
Initially, we invested in content and also understanding our student requirements very deeply, and by the time we were ready to build tech, we knew exactly what we had to build, and the order in which the features had to be launched.
Raising funds and scaling the venture
Just when we thought our business idea would automatically be a success, we faced more problems.
We already had an alliance with an animation studio that helped us animate content. But we needed faculty to teach and they were not willing to join us without basic remuneration.
Same way, tech is also not easy to build – we needed people and resources to build the tech stack.
After taking all aspects into consideration; we decided to raise funds to meet two objectives – to create content and to build technology.
We raised $ 150000 in our first seed round and $135000 in our second seed round.
Whatever we have done in the last 3 years, we could not have achieved it without the fundraising – every business needs seed capital. Some more and some less. If you wish to grow fast, you need capital in the beginning stages, else it will be a tough journey.
As of date, we provide e-learning courses to students of CA. The courses have unlimited views and are usually valid till the exam dates for which they are purchased.
We are fully online from day zero and our classes are streamed online like Netflix / Amazon.
Our byte-sized modules' price points start at Rs.99 (this has been the case for the last 3 years). These byte size modules allow students to enroll in single chapters or one SA or one AS so that they can try us out and of course revise only what they need.
Our uniqueness is our story-based pedagogy and usage of visual effects to teach complex, boring, and theoretical topics in an extremely engaging manner.
We are incredibly student-friendly and have tried to imbibe the culture of #StudentFirst throughout the organization.
Once we add tech & data analytics layers (currently under development) to our product, we should start seeing students perform even better.
Very shortly, we shall be launching e-learning modules for other international professional courses.
Challenges on the way
The Indian former international cricketer, Sachin Tendulkar often says: “Cricket is more of a mind game than anything else.”
My belief is that start-ups are also the same – more of mind games.
Our biggest challenges were internal (thoughts and actions) and not external (competition, students, investors, etc.,)
For the first full year after starting up, none of the Co-founders got any salary.
In years 2 & 3, our salary levels went back to what we were earning in our first jobs almost a decade ago, this was a cut of over 90% from the salaries. That shift was not easy at all especially in Indian middle-class families, where employment and steady income are more preferred more than risk-taking ability.
Also, peer / societal / family pressure to not forego earnings, especially when one is in mid-thirties is very high.
I addressed it by constantly keeping my family abreast of what we were doing and involving them on the journey.
The second biggest challenge was to keep going forward despite many investor rejections or negative feedback. Our skin had now become very thick to investor feedback.
We continued to be super sensitive about student feedback – we go to great lengths to ensure that our product meets student needs and we address every single complaint of theirs.
Timeline of our journey
- This year where we were trying to come to grips with entrepreneurship – there was a sense of excitement but very little actual work. Instead, a lot of thinking and discussions.
- We built a very basic website & did not have an app to start off with.
- We started by selling modules of Standards on Auditing - each SA at Rs.49 ($1).
- Every paying customer gave us real and genuine feedback on what they wanted or what they did not like, and we latched on to that feedback and made product changes like crazy.
- In 2018, things were looking great. We raised our first seed round and got ourselves an office....we began to feel like finally, things were moving.
- We launched several subjects and started interacting a lot more with students, faculty & parents.
- This year we saw great traction and had students from over 300 non-metro locations, given their lack of access to high-quality content.
- We started to get a whole different picture than what we had imagined when we started out - we ended the year with a team size of 15 people.
- This is the year when we started seeing traction in our revenue and achieved cash breakeven status.
- We garnered a lot more investor interest and also raised $135k in our second seed round.
- Launched CA Foundation & Inter fully this year – we ended the year with a team size of 20.
- The year that could have been so different but with COVID-19 lockdowns & exams getting postponed, all the coaching players (specifically CA and related fields) got hit badly.
- Even though we are still breaking even every month, revenues have not met the lofty expectations that we set at the beginning of the year.
Entrepreneurs are not defined by qualifications, but by their clear idea and zeal to serve their target market.
All you need is a clear idea of your target market. Once you know your market well, you should be ready to chase the market with your product with enough doses of passion and determination.
CAs must specifically be willing to place customers, growth & tech at the forefront as they start out.
Growth is more important in the initial stages than Accounting. CAs with no entrepreneurship background should shed their auditor/accountant skin and think like a businessperson.
Even if the books of accounts are a mess, it does not matter as long as one has a business that is scaling.