Championing 'Mohalle ka Shahrukh Khan': How Classplus is Transforming Creators into Entrepreneurs

“Have you watched the web series Panchayat? I love it!

That’s the core audience creators and educators on Classplus cater to.

Almost 80% of our student base is from Tier 2 and Tier 3 cities.” — Mukul Rustagi, Co-founder and CEO, Classplus.

As the saying goes, there are many ways to skin the cat, and Classplus’s stupendous run proves just that.

The Indian edtech sector has seen a tumultuous journey in recent years. While the pandemic initially fueled explosive growth and attracted billions in investments, only a handful of businesses have managed to weather the storm and thrive in its aftermath.

Amidst this volatile landscape, one company has consistently bucked the trend. 

Classplus, a Blume Fund III company, has not only survived but thrived, capturing an ever-larger slice of the market and creating substantial value for all stakeholders — customers, students, employees, and investors alike. They were last valued at over $600 million, backed by investors like Blume Ventures, Peak XV, Tiger Global, Spiral Ventures, Strive, Alpha Wave Global, RTP Global, and Times Internet.

And they have managed to grow at a staggering pace by following a simple rule — keeping the customer at the center of everything they do. These creators have served a mind-boggling 100 million (10 crore) students since the start of the pandemic.

Let’s dial the clock back to see how two Delhi NCR boys, Mukul Rustagi and Bhaswat Agarwal, changed the edtech scene in India.

The Unexpected Start

Mukul Rustagi and Bhaswat Agarwal’s journey to starting Classplus is full of starts, stops, and serendipity.

They met by chance at their coaching institute while preparing for the IIT-JEE entrance exam. Both worked hard for months, putting in long hours and building a strong bond as they prepared for the toughest engineering entrance exam in the country. Their efforts paid off, and they graduated as engineers in 2013.

After graduation, Mukul joined Futures First as a derivatives analyst, while Bhaswat joined Microsoft as a tech strategist.

One fine day in 2015, Bhaswat tried to convince Mukul to start something together. Mukul casually dismissed it as a joke at first. But within 24 hours, they had resigned from their full-time jobs to plunge head-first into entrepreneurship.

Bhaswat gained insights about online Indian education at Microsoft, while Mukul joined forces ​“in good faith that we’ll crack something worthwhile together.”

What followed was a lot of activity but not much progress.

For the next two years, the pair experimented with various ventures. They explored multiple education-related initiatives, including online tutoring and enhancing the coaching center curriculum.

Mukul: ​“Honestly, I don’t even remember what all we experimented with. Maybe the current Classplus model was the only thing we hadn’t tried.”

By November 2017, the situation looked dire.

With only one month of funds left and no clear direction, their entrepreneurial journey seemed to be approaching its final stop rather prematurely.

Mohalle ka Shahrukh Khan (The Neighbourhood Superstar)

As 2018 rolled in and the ​‘edtech wave’ gained momentum, the duo saw a unique opportunity.

The ​‘Jiofication’ of the internet made consuming content on the internet easy for the average Indian.

Mukul: ​“It was an interesting era. It was pre-COVID, so online learning and tech adoption among creators and students was still quite low.”

The duo didn’t focus on solving for getting more students to consume educational or test-prep content online. There was already enough competition in the space.

Instead, they wanted to empower the creators, who already have a dedicated following among students.

Mukul says they are ​‘mohalle ka Shahrukh Khan’! 

The company positioned itself as an enabler for independent educators rather than competing directly with large B2C EdTech companies.

Mukul explained their approach: ​“We said let’s not make it a fight between B2C companies versus B2B. These are independent creators. Let’s play an enabler role in the market and take a punt on which side will win in 5 years.”

And how did they become an enabler?

The plan was to provide a full-stack experience to the ​‘teacherpreneurs’. Be it uploading a video course or preparing quizzes, Classplus enabled the neighbourhood creators to become institutions and directly charge a fee from the students. 

Classplus takes a percentage of the teacher’s earnings and charges a one-time setup cost.

While they were at it, they placed some game-changing bets, going against industry practices. Offering white-labeled apps was one of them.

“We were the first company in the country to white label our mobile products for customers. We had no reason to put our logo on the creator’s app. To a student, their teacher’s brand should be bigger than ours to establish trust” said Mukul.

Their desire to go full-stack enabled many creators to monetize their content digitally. One such teacher is Kamlesh Yadav, who teaches spoken English on his channel Mass Study.

Kamlesh said, ​“When COVID-19 hit, I started Mass Study, my YouTube channel for English learning to impart knowledge to students stuck at home. It wasn’t easy — I didn’t have a fancy camera or any clue about video editing. But I decided to give it a shot anyway, using just my phone and learning to edit as I went along.

The channel gained traction, and at 25,000 subscribers, I felt I was onto something. At that time, I came across a Classplus ad on Facebook. I reached out to them about creating my own app.

Fast forward to today, and the growth has been incredible. Mass Study now has 4 million YouTube subscribers and over 300,000 students taking online courses through the Classplus-powered app. It’s been quite a journey!”

Classplus’s bet on empowering creators made good business sense.

Mukul breaks down the unit economics for creators: ​“The gross margins for creators are close to 90%. The customer acquisition cost is close to zero since the students sign up through organic social media posts. Once you upload your videos on the app, you can relax, switch off your phone, and take a carefree trip to Goa. You’ll continue generating passive income, depending on the quality of your videos.”

We’d be remiss if we didn’t explain what Classplus’ product entails.

We’ll explain it like you’re five.

1. It helps creators create an app, like a special TV channel for their lessons.
2. On this app, creators can do everything: put videos of their lessons, host quizzes, and talk to students directly.
3. Students can use this app on their phones or computers to learn from their favorite teacher anytime, anywhere!
4. Creators collect money through the app and Classplus takes a cut.

Not every day is child’s play, though.

The Thorny Path of Building a B2B2C Edtech Company

Mukul described the difficulties in raising capital as they expanded in 2019 – 2020, noting that ​“80% of the VCs rejected us.”

There were a variety of reasons why this was happening. From the lack of a clear plan of action to ​“focusing on a B2B2C model when the entire EdTech sector was being built on the B2C model”. The no’s kept getting stronger. 

In fact, he recounted a particularly challenging period when a term sheet was withdrawn by ​“a grade A VC at the very last minute”, leaving them in a precarious financial situation.

Even the Blume Ventures team was unsure about their business model at first.

Sajith Pai, partner at Blume Ventures, said, ​“Everyone liked the team and saw potential. There were questions on TAM, there were questions on how easy it was to execute what Mukul was saying because the product was only SaaS, there was no B2B2C marketplace.”

Conviction was required in heavy doses for a model that hadn’t taken off in India.

But Classplus’s determination and ability to rally the troops within the organization stood out, catching Blume Ventures’ attention.

Blume led the $1.5M pre-series A round in 2019, providing Classplus with enough capital to continue. Mukul acknowledged Sajith’s conviction in investing in Classplus in his LinkedIn post.

No one was prepared for what happened next — COVID-19.

The pandemic accelerated Classplus’ growth in unimaginable ways.

Mukul stated: ​“Come pandemic, everyone needed Classplus to keep their business running. We became the go-to platform for educators and creators to teach and continue to engage their students.”

Schools were shut indefinitely. Educators were at home. So were the students. This led to an exponential rise in the number of users. 

The number of students studying using a Classplus-powered app soared to 75 lakhs in the midst of lockdowns from a mere 90k in 2018. 

And these numbers weren’t hidden. The investor interest skyrocketed.

They raised $70 million in funding co-led by Alpha Wave Global and Tiger Global in March 2023, which was preceded by a $65 million round in 2021 by Chimera Ventures and RTP Global. 

But all wasn’t smooth sailing for Classplus as the competition was heating up. 

Culture — The Secret to Winning in a Competitive Market

During the pandemic, as people pursued passion projects, Classplus saw the opportunity to expand their TAM beyond academic subjects to include skill-based courses.

Mukul noted, ​”We started seeing a lot of non-academic creators coming to our platform, teaching financial literacy, photography, yoga, fitness, coding, baking, farming, and more.”

Classplus was no longer just for connecting creators to students. Anyone could create for anyone.

Sajith Pai added: ​“The core has expanded, but the core value hasn’t changed, which is to help creators make more money and do their job better.”

And the toast was being buttered from both sides.

Classplus made strategic acquisitions to double down on their core TG. In 2022, they acquired a stake in Testbook, which helps students from smaller cities prepare for government exams through live classes, mock tests and quizzes. Mukul said that it has ​“strengthened the Classplus offering to a whole new level.”

Classplus evolved from a software for creators to run courses to enabling them in finding students, and vice versa, creating a marketplace. The Testbook acquisition expanded the students’ access, who were already thronging Testbook for test-prep, to the entire course catalog on Classplus’s platform.

The competition, not one to be left far behind, came up with ways to empower creators. Following Classplus’s success, they launched the B2B2C model, empowering creators to attract students independently.

To make matters more complex, typically once a teacher/​creator finds a suitable platform, they don’t switch easily.

Even in this competitive space, Classplus continued to win not by running fancy ad campaigns or discounts but by obsessing over their customer and A++ execution. Here’s one anecdote from Mukul reflecting their customer obsession.

“We didn’t have the live class feature on our app when the pandemic started, but there was a huge demand for it from creators. We decided to build it in a 100-hour sprint. We launched a 100-hour org-wide hackathon and had a fully working live class feature by the end. If we didn’t do this, we’d be in trouble. It’s in our DNA to always be the best place for creators to interact with their students and make a living.”

Having a strong focus on customer-first solutions and an assiduous engineering mindset meant Classplus stayed ahead of the competition.

Sajith added, ​“Looking back, there were a few obvious rights to win, even if they weren’t apparent early on — the strength of customer interaction and customer obsession. Listening to customers can help you overcome many shortcomings.”

This customer-centric culture extended beyond product development and into how Classplus treated its team members. The company’s commitment to its employees is evident in their actions.

In February 2024, they announced their second Employee Stock Ownership Plan (ESOP) buyback in three years.

Mukul remarked, ​“Having a sizable sum of capital in the bank helps you sleep better at night and make sustainable decisions for the team that won’t hurt us in the long run. Succeeding in business requires avoiding short-term distractions.”

The Future is All About Expansion

While it may have been nice to have for some, for Classplus, relentless innovation is a must to stay ahead of competitors.

As the market evolves, Classplus is doubling down on their core promise: making it the most intuitive, accessible, and valuable learning platform for creators and students.

Mukul added: ​“Our right to win is not about what we do but what we don’t do. We’re not a glamorous company and we don’t try to become one. I think that’s one of our key strengths.”

Sajith: ​“Classplus will have to expand into multiple areas while attacking the core. They’re acquiring businesses like Testbook, Gyan Live, etc. The idea is to be the best way for creators to reach their audience.”

Interestingly, while Classplus remains digital-first, they’ve made offline inroads, too.

In May 2024, they launched the Polaris School of Technology, a new-age B‑Tech program to transform tech education in India.

Mukul explained that it aimed to bridge the gap between college education and industry needs: ​“Can we take the same pedagogy used to train our internal engineers and convert it into a curriculum for this talent?”

While it’s still early days at Polaris, the Classplus team is excited about the potential impact as it continues to expand its footprint.

Mukul said, ​“Today, we have 20,000 creators who cater to almost 18 lakh students daily across our apps and 2 CR+ students monthly. It’s one of the highest MAUs in the country in the education space. Testbook also independently caters to 2Cr+ students monthly.”

Classplus stands as a testament to the power of going against the grain, being customer-obsessed, and creating a strong culture to build a best-in-class product.

By enabling educators to build their own digital brands,Classplus has created a market with continued growth and impact in the years to come.

In a sense, they’re the real Shahrukh Khans of their mohalla. And as the ultimate superstar, Shahrukh Khan says in Om Shanti Om, ​‘Picture abhi baaki hai mere dost!’