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Pay-after-placement platform Masai School turns cashflow positive

Prateek Shukla

Pay-after-placement startup Masai School founder Prateek Shukla has announced that the company managed to clock in cash flow positivity in April.

“Since the day Masai started, we kept saying that the pay-after-placement model is the only way to unlock the untapped potential of India and it is the future of higher education. I’m really glad that our team has proven this,” Shukla said on social media platform X on May 6.

But while Masai School has consistently placed students over the past batches, it has also not witnessed any abnormal spike in placements in the last month. So what led to Masai School turning the corner?

There is another piece in Masai School’s cash positivity puzzle.

India Quotient-backed edtech start-up Masai School has started offering computer science courses in partnership with the Indian Institute of Technology (IIT) and National Skill Development Corporation (NSDC).

These courses, however, are different from the Masai School model.

Refund after non-placement?

While the company typically provides pay-after-placement courses to full-time students, these new offerings are prepaid and extend to part-time students as well, guaranteeing a refund if placement is not achieved by programme end. “These online courses are taught by IIT professors and it was not possible to bring them onboard without compensation, hence we did not go with the pay-after-placement model,” Shukla told Moneycontrol.

Shukla explained that if the IIT had not been involved, the company would not have initiated prepaid courses. “Without it, a basic upskilling programme wouldn’t have made sense to pursue,” he added.

While currently the core model continues to constitute 90 percent of the revenue, he expects the mix to change with the latter generating up to 45 percent of the revenue in the coming years.

“We are a venture funded business and we need to build a large business which has large revenue. We need to build a revenue stream, which is not dependent on the market, because it will be everything which is dependent on the market and as the market oscillates your company can go from Rs 15 crore a month revenue to zero. That is not a good situation for any investor to be in,” he added.

The Masai School chief, however, added that the company will continue to majorly offer pay-after-placement courses as it has been at the centre of the model since its inception.

IIT for all

Masai School has introduced the “IIT for All” initiative, offering these courses in partnership with IIT Guwahati, IIT Mandi, and IIT Ropar. The eligibility criteria include being enrolled in college or having at least a 12th-grade qualification, according to Shukla. The courses are scheduled on weekends, making them suitable for working professionals as well, he said.

“To join Masai today, you must commit nine months, 12 hours per day. This selection process targets a specific audience, making it narrow. While Masai has gained popularity among college students, they are unable to participate. Hence, our aim has always been to create opportunities for a broader range of individuals to join Masai,” said Shukla.

In these courses, students also have the option to participate in campus immersion where they can engage in various events at IITs, including fests, graduation and orientation ceremonies.

To be sure, the courses that can go up to 14 months, cost about Rs 2 lakh for students. “This is compared to a semester’s fee of around two to two and a half lakh rupees, the annual fee of 3.5 to four lakh rupees at IITs. Moreover, considering that students receive a minor degree evaluated by IIT professors, I think this is reasonable,” said Shukla.

For Masai School this means an upfront revenue of Rs 2 lakh as soon as a student enrolls into the course. To be sure, while the company manages to clock a revenue of close to Rs 3.5 lakh per student in its core vertical, the payment only starts flowing in when a student gets placed.

Shukla is now hoping to continue to record positive cash flow for the next 12 months on the back of the two offerings. In FY23, the upskilling platform recorded a revenue of about Rs 36.84 crore, with about Rs 39 crore in losses.

The company, Shukla said, will also start to approach investors for the next round of funding as it clocks about three to four months of consistent positive cash flow.

Masai School last raised a Series B  funding round of $10 million in 2022. The company has to date raised about $22 million and was last valued around $50 million.

This article was originally published on Moneycontrol >


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