English Fever: How Startups are Unlocking Smalltown India’s Big-City Aspirations
When Arpit Mittal refocused his third startup towards teaching English to Indian kids unfamiliar with the language, it quickly became apparent that they weren’t the only ones interested. Parents were flocking to SpeakX, his Gurugram-based edtech startup, which saw a notable user increase from tier 2 and tier 3 cities.
The roots of SpeakX can be traced back to Yellow Class, a platform that offered after-school activities for students studying at home during the COVID-19 pandemic. As schools reopened, Yellow Class ceased operations in 2023, but its English modules had garnered such popularity that they formed the basis of the new venture.
SpeakX, charging users ₹300 per month, primarily caters to users fluent in Hindi, drawing a significant audience from Madhya Pradesh, Uttar Pradesh, and Bihar. Although many can read and write in English, speaking the language fluently remains a challenge and an obstacle to accessing high-paying jobs.
The quest for English fluency in India is not new, but the numbers tell the growing story. The platform’s user base ballooned from 10,000 in September to around 108,000 currently. According to Mittal, they maintain a retention rate of 30% and see a monthly user growth of nearly 20%.
The company is planning to expand its services to cover other regional languages, starting with Tamil, Telugu, Malayalam, and Kannada, to broaden its appeal and reach.
Currently, SpeakX generates about ₹3 crore in monthly revenue and profits of ₹75 lakh per month. This success builds on Mittal’s previous ventures, including property search platform Roofpik and edtech startup Edcited.
Another edtech company, PlanetSpark, is also witnessing considerable growth in user engagement from India’s smaller towns. Backed by Flipkart co-founder Binny Bansal, it offers courses in public speaking, debating, and more. An impressive 44% of its revenue comes from India’s tier 2 cities and beyond, with the majority hailing from the southern states.
Co-founder and CEO Kunal Malik noted the significance of English fluency in equating it with intelligence, which motivates parents to invest in such learning for upward social mobility. PlanetSpark’s presence in smaller towns grew by 65-70% annually over the past five years.
In terms of financial performance, PlanetSpark has reduced its losses by 64% while growing revenue by about 50% in 2023-24, with plans to become EBITDA positive by FY26. The company eyes a public offering within two years and aims for profitability along with $50 million in annual recurring revenue.
English Quest, a UK-based startup, derives around 75% of its revenue from India, with demand from low-cost private schools. Partnering with schools close to metros like Mumbai and Hyderabad, it provides educators with lesson plans including pronunciation guidance and workbooks. Co-founder Jamie Martin underscored that schools are pressured by parents to achieve fluency in English, driving demand for their services.
London-based startup Zamit, engages schools in tier 2 cities in the National Capital Region, Punjab, Uttar Pradesh, and Nepal. The demand for their services stems from students’ aspirations to better their lives through English proficiency.
Edtech entities like SpeakX and Zamit, deeply rooted in regional segments, stand to benefit as multinational companies establish global capability centers (GCCs) in smaller Indian cities. English proficiency provides local talent a vital pathway to capitalize on opportunities these centers provide.
According to experts, the rise of GCCs, expected to exceed 500 by 2026, highlights the demand for English skills. As GCCs seek local talent at lower costs, English remains a decisive factor for unlocking potential opportunities.
Despite opportunities, scaling presents challenges for smaller edtech startups due to the need for substantial capital for nationwide expansion. The edtech sector attracts cautious investors in light of recent events, such as the collapse of Byju’s, once India’s highest-valued startup. Nonetheless, SpeakX has secured funding, raising $6 million in a Series A round in 2021, while PlanetSpark raised $17 million in a Series C round.
For these startups, the future pathways include pursuing public markets or acquisition. As larger companies may seek to acquire nimble regional startups, there is a notable opportunity to establish a footprint in this evolving educational landscape.
