Heavy, large, expensive, and often times – required, textbooks probably cause students more headaches and troubles than any other school material. The average cost of books for a full-time student is skyrocketing and this three-year-old London startup is tackling this head-on. Perlego is the subscription-based digital learning platform that has over 300,00 textbooks and professional titles available in its catalog. Perlego has partnerships with the largest publishers in the textbook industry that include Pearson, Wiley, and Sage. Students are flocking to Perlego’s platform due to its convenience, accessibility, and cost . The platform only costs £12 per month, a fraction of what it would cost to obtain textbooks.
London TechWatch spoke with Gauthier Van Malderen about the company’s start, future growth plans, and recent funding round, which brings the company’s total funding to $15M across four rounds
Who were your investors and how much did you raise?
Series A: £7M (50% VC, 50% angels).
Tell us about your product or service.
Perlego is a subscription-based, e-learning platform offering unlimited access to more than 300,000 textbooks and professional titles.
What inspired the start of Perlego?
The Perlego platform remedies many of the ills experienced by the sector. For the student, it provides a much-needed solution to the issue of textbook price inflation – prices have increased by over 847% since 1978, or three times the rate of inflation. While students in the UK can spend on average £400 per year on their textbooks, Perlego gives its readers access to the entire digital library for only £12 per month. For the publishers, Perlego offers a distribution method that reclaims the revenue losses to piracy and the second-hand market; much in the way that the likes of Spotify have done for the music industry.
How is Perlego different?
We’re the first textbook subscription company with content from the largest publishers. Pearson, Wiley, and Sage are on board, along with +2,000 other publishers. Our model is also clearly speaking to the new generation that prefers access over ownership: we are seeing a 116% increase in new subscribers month-on-month.
Who do you consider to be your main competitors?
Other learning & development resources such as Coursera, GetAbstract, and LinkedinLearning.
What market is Perlego targeting and how big is it?
The UK has 2.4M students, which results in a market size of £0.4B for UK students alone. If you look on a European level, there are 19.6M students, worth £3.4B. Worldwide, there are 200M students, resulting in a global market size of £14B. But, Perlego also has a B2B side targeting professionals for “lifelong learning”. This extra market is worth £62B, according to Nielsen Bookscan (2018), the International Association of Scientific, Technical, and Medical Publishers (2012), and a Taylor & Francis Report (2017). So in total, the global market size of Perlego is worth £76B.
What’s your business model?
We offer unlimited access to textbooks and professional titles for a monthly or annual subscription. The content comes from publishers who receive a % of our revenue (the exact amount is dependent on the % of their books being read), and the price of the digital version of their book. Our users are students (B2C) and universities and companies (B2B). Having high coverage for the UK, Italy, and Germany, we are now further expanding to the rest of Europe.
What was the funding process like?
It was both stressful and exciting. It’s a really difficult process going out there and asking for people to believe in Perlego enough to invest but getting such a positive reaction and having so many people want to be involved, was really an unmatched feeling.
What are the biggest challenges that you faced while raising capital?
There was a lot of anxiety in waiting to hear decisions from potential investors or chasing them up if necessary. Also making sure we were ready and prepared for anything, whether that be just questions, or not the answer we wanted.
What factors about your business led your investors to write the check?
The passion and excitement for making educational content more affordable, and the clear validation that our business model is here to stay.
What are the milestones you plan to achieve in the next six months?
We will develop the next generation of Perlego’s “smarter learning platform,” including adding new features that simplify and enhance the learning experience, as well as content libraries in multiple languages to enable further expansion to European markets beyond the U.K. roots.
We will develop the next generation of Perlego’s “smarter learning platform,” including adding new features that simplify and enhance the learning experience, as well as content libraries in multiple languages to enable further expansion to European markets beyond the U.K. roots.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
Become the expert in what you’re doing and surround yourself with a smart and dedicated team to build your product. With that, you’ll build the credibility of your company for investors.
Where do you see the company going now over the near term?
We want to become the go-to learning platform for students and professionals across Europe and the UK.
What is your favorite restaurant in London?
The Perlego team recently went to PastaNostra. Great Italian food!
