Nigerian tech start-up Prepclass, launched in 2013, provides a database of study content to help prepare prospective university students for their Joint Admissions and Matriculation Board (JAMB) exams. The platform has over 3,000 registered users and more than 440 paid customers. A three month subscription-based model gives students full access to all content on the platform for a fee of around US$6.
The business also has a home tutoring service with prices ranging from $110 to $420 per month. The service currently accounts for over 90% of the business’s revenue.
Within just a few months of launching, Prepclass was identified as one of Fast Company’s top 10 most innovative companies in Africa for 2014.
Chukwuwezam Obanor, Prepclass’s co-founder, answers How we made it in Africa’s questions.
1. Give us your elevator pitch.
Prepclass is an education consulting company that aims to help students perform better in school. Our target customers are middle class / upper class parents looking to hire personal tutors to help their children with academic challenges or to teach their children special skills such as art, music or a foreign language. Students can access our proprietary test preparation platform and have one-on-one access to our exceptional tutors.
In the past year, we have provided over 50 jobs and we have connected more than 40 of our tutors to paying clients in the last four months. We have generated over $14,000 in revenue and we are growing our revenue at 20% per month.
2. How did you finance your start-up?
Our first source of funding was personal savings. We truly had to believe in ourselves. My co-founder and I quit our jobs, pulled together the little we had and when we couldn’t [afford to] recruit we convinced friends to help out where we had insufficient expertise. Our first funding was from a tech event we won in February 2014. Subsequently we raised money from other events and also got our first seed investment from a foreign investor. We are always raising but currently we are extremely pleased that the business is sustainable and we are much more focused on increasing our revenue and market share.
3. If you were given $1m to invest in your company now, where would it go?
According to our current financial plan we would spend $1m over a four year period. Around 70% of the investment would be spent on marketing our services, to both recruit more tutors and attract more clients. Then 20% would be spent on recruiting and building the team’s internal capacity, and 10% would be spent on the platform’s technology.
4. So far, what has proven to be the most successful form of marketing?
Word-of-mouth. Of all our marketing channels, word-of-mouth has been the most effective and this has been incredible for us because it shows our clients are quite pleased with the quality of the home tutoring service we render. Around 80% of our parents say they are happy to recommend our services to friends and family and this has been our biggest source of leads. More than 50% of our clients who have more than one child eventually request for more tutoring hours or an extra tutor to handle their other child.
5. Describe your most exciting entrepreneurial moment.
I would say getting our very first client and also when we won our first start-up competition which was a huge validation for our business. Those two events were huge for us as entrepreneurs. That feeling that you have created value that someone else is willing to pay for is perhaps the most rewarding feeling for any entrepreneur.
6. What has been the biggest mistake you have made, and what have you learnt from it?
When we started out we focused majorly on the building of an awesome product and deployed a lot of resources and time to product building. Currently we are far more focused on revenue than we were then and this has helped us dramatically improve the business model, making it more sustainable and profitable.