According to the start-up Knowunity, it completed its last round of financing within three weeks. In mid-February, existing investors put another nine million euros into the learning app, an extension of the nine-month-old Series A.
"We didn't want to make a big round of financing," says co-founder and CEO Benedict Kurz in an interview with "Gründerszene". Rather, the old shareholders would have pushed for a new investment.
"Following our initial investment, Knowunity has developed extraordinarily on all levels," says Sebastian Becker, partner at Knowunity investor Redalpine. The app, which offers tutoring in TikTok format, grew by two million users in the last quarter alone, according to founder Kurz. Since the start in September 2020, around six million students have registered with Knowunity.
Learning influencers, i.e. mainly tutors of the same age with thousands of followers, provide tuition in short video formats on a wide variety of subjects such as English, mathematics or biology and provide notes, mind maps or even audio recordings.
Knowunity is set up like a social network where users can follow multiple influencers and connect with other students. The idea behind it is that everyone can share their materials and thus help others to learn.
Particularly active influencers receive a monthly allowance of up to 100 euros from the start-up. According to CEO Kurz, this type of remuneration costs the tech company a “small four-digit amount per month”. However, he emphasizes that the money should not be an incentive.
So far, the start-up has been financed purely from VC funds. "The strategy has always been to focus on growth for a year or two and then take care of monetization." Knowunity has been testing various sources of income since the end of last year.
For example, companies can place ads on the app in which they advertise their training areas or job entry. The teenagers would keep asking on the platform what they could do after graduation. Knowunity wants to offer them an opportunity for orientation.
A second, much more relevant source of revenue is premium profiles, explains the 21-year-old. It is important to the start-up to offer its learning content to all students free of charge. For three to six euros a month, however, they would be able to view more content offline, for example, or receive faster answers to queries.
Since the start, the growth of payment users has increased by 30 percent per month, according to Kurz - more than forecast. According to the Berlin start-up, there is no sign of the crisis.
Knowunity's curriculum begins in fifth grade. However, the majority of users are about to enter technical college or are about to graduate from high school. This target group is not creditworthy. The teenagers therefore have to let their parents pay for their premium profiles.
Kurz is certain that in most cases parents are willing to spend money on tutoring and that Knowunity generates constant sales as a result. If students have graduated and leave the app, new classes would follow again and again. Education is therefore a stable market.
The CEO does not reveal how many of the six million registered students actually open Knowunity on a regular basis. "But we have a high proportion of weekly and monthly users." The start-up grows primarily through word-of-mouth propaganda. The teenagers would recommend the app to their classmates, and the learning influencers also share their profiles on other channels such as TikTok or Instagram.
Kurz is not afraid that the tutors will run away from the portal – on the contrary. "Many started on Instagram and hiked over to us, taking their community with them."
However, growth at the start-up does not only work through the number of users. A few months ago, Knowunity expanded to other European countries. The market launch in the USA is also scheduled for April. The 21-year-old CEO is therefore often in New York to train the newly hired team on site.
For 2023, the start-up, which was actually founded in the Stuttgart suburb of Sindelfingen, is planning to expand across the board. In the long term, Kurz and his co-founders Gregor Weber, Yannik Prigl, Julian Prigl and Lucas Hild could also imagine expanding the content for students.
"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with the financial journalists from WELT. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.