Great Learning focuses on job readiness of students, looks to raise $60 mn

Great Learning, an online education site, is focused on an optimal combination of process, technology and people

Great Learning’s Mohan Lakhamraju was bitten by the entrepreneurial bug a bit earlier than most. A computer scientist from IIT-Mumbai, in the early 1990s when his peers were acquiring degrees from the best colleges in the United States, Lakhamraju dropped out of his doctorate at Berkeley, California to be part of a start-up in the US that was eventually bought and subsumed into Hewlett Packard.

His start-up experience opened his eyes to how little he knew about business so when many of his peers were embarking on their careers, he headed to Stanford Business School at 26 to hone his own understanding of business : what works and what doesn’t. Business school pulled him into the world of venture capital and he first joined a VC firm in the US and then headed to Tiger Global’s India office in Mumbai with a focus on the education space (2006-08), still a nascent sector at the time. He also realised that his own experience at IIT was more an exception than a rule. In general, students in India were subject to a less than happy learning journey even at what were touted as the best colleges.

In 2008-09, the financial crisis and the temporary stop on investments in emerging markets gave him a breather and it was during this time that Lakhamraju reviewed where he stood, decided his next and natural move : to resign from Tiger and set up a small, focussed energy (power and renewable energy) management business school in Gurgaon : Institute of Energy Management. His entrepreneurial streak remained with him albeit taking shape as an educator rather than a typical businessman.

After the school stabilized and earned a name for itself, he came across the Great Lakes Institutes of Management, MBA schools set up by Bala V. Balachandran - a US resident and professor who had been involved in the setting up of ISB, Hyderabad prior to setting up his own MBA offerings in India in Chennai. Great Lakes had earned a certain credibility for itself and Lakhamraju seized the opportunity to merge (in 2010) his energy management school into a broader management space and that’s how he became vice chairman of the merged entity : the Great Lakes Institute of Management in Gurgaon.

Despite the fact that he had carved out a niche for himself in the management education space, it still rankled Lakhamraju that he could access such few students, His own lower middle class upbringing had exposed him to the sheer lack of availability and affordability for the country’s teeming millions. No matter how they managed it, the two Great Lakes campuses could house and educate just a fraction of the students who needed access to quality learning.

That’s when he and his two co-founders started exploring ways to take Great Learning online. As opposed to the Great Lakes campuses that by definition were exclusive, the site was aimed to be as inclusive as possible. He had also noticed back then that Coursera - founder Andrew Ng was his classmate at Berkeley - was already beginning to get some traction in India and even though it still seemed like early days with limited broadband connectivity and penetration, Lakhamraju could see the writing on the wall, a bit ahead of peers. By August 2013 - a bit ahead of most others (upGrad went live in 2015 and Simplilearn in 2010) - the Great Learning site was up and running in a hybrid model where students came in for classes a few days and did some classes online, making it one of the early birds in the blended space. The physical campuses do distinguish Great Learning from competitors like upGrad and SimpliLearn and investors and experts in the space say that time will tell whether that works to their advantage or not.

Lakhamraju says that Great Learning - an optimal combination of process, technology and people - followed three defining principles to promote learning. One, it worked on the assumption that students are not self motivated enough to learn and finish courses on their own. “Very few have the kind of drive one assumes in such learning”, he says. That’s why mentors who guide students through the programme remain a major factor. At present, the company has 2500 mentors who work on a contractual basis and claims to have a 91 percent completion rate. Feedback from students is taken seriously and constantly. Any low ratings of courses by students and the course can be repeated.

Great Learning also has a keen lens on the job readiness and preparedness of students as it believes that most learners are “not there just for the sake of learning” but to further their careers and job prospects and learn the skills for “aspirational jobs”. In the pandemic for instance almost 1000 of the learners have reported a career advancement or promotion within their organisation or a new job post their course completion. This is key for the site as it helps spread their brand by word of mouth, still one of the most powerful ways of drawing in users.

Things proceeded smoothly from 2013-14 till the pandemic and suddenly the closure of colleges and the overall filip to online learning helped Great Learning consolidate its own position. The company catapulted like many others and now has an annual run rate of US $ 100 million (approximately Rs 700 crore) with 45,000 paid users (typically one year long online course will cost Rs 2 lakh a year) and around a million users (2/3rds are in India) if one includes those shopping and exploring for free. It also hired almost 700 employees in 2020 alone, taking the total staff across its two locations - Bengaluru and Gurugram - to 1200, largely those who they have never met in person. Potentially, it has just scratched the user surface as it estimates that the global user size could be in the range of 150 million while the target segment in India would be around 40 million users - divided half and half between professionals and students.

So far, the enterprise has been bootstrapped although more recently, cricketer Virat Kohli became an investor (undisclosed amount) and brand ambassador for them. Now, like many rivals, the company is looking to raise anywhere between US $ 50-60 million to fund its expansions and next stage of evolution which includes greater penetration in the US market which it entered only in end 2019 and is proving to be one of its fastest growth areas. The US, he points out, is both a vast market and one where 30 percent of all master’s enrollments are now fully online.

Former Mckinsey consultant Pramath Sinha, founder of Harappa and expert in the higher education space says that Great Learning has its own distinct strengths and areas of focus like the other large players in the space, a less crowded one than the K-12 segment. “The players have pretty distinct value propositions and target segments although there are some overlaps”, he points out. He argues that for instance global giants like Coursera - which recently had an impressive listing - can easily absorb some of the existing players and “then some”!

So, for Great Learning and others, the action is just hotting up. Whether they become big fish in a small pond or small fish in a big one remains to be seen.