Mass layoffs after the huge party. What’s going on inside GoStudent, the Austrian $3 billion edtech — investigation by Insider
GoStudent, an edtech unicorn that now is valued approximately €3 billion, was the subject of Insider’s investigation into teacher vetting issues, office closings, and legal issues within the company. AIN.Capital selected the most interesting facts.
- GoStudent is an edtech unicorn and global leading tutoring provider that was founded in 2016 by Felix Ohswald and Gregor Müller. The company is valued at €3 billion. Since launching, GoStudent has raised more than €590 million from investors, including €13.3 million Series A round in 2020.
- At its peak, GoStudent employed just over 2,000 people and served 24 countries. In August 2023, the startup received an additional $95 million round, a mix of equity and debt capital, with plans to expand its solutions to the DACH region.
GoStudent laid off 25% of its staff over the past six months
- In 2021, GoStudent opened an office in Sweden. The next year, the office shut down. GoStudent explained the decision: “tutoring in Sweden is less common than in certain other European countries”.
- GoStudent also struggled in the US due in part to the same sluggish economy, one former employee said, as well as heavy competition in the tutoring space. Overall, the wave of layoffs affected at least 200 people, which is about 25% of GoStudent’s staff worldwide
Former employees shared negative experience of working in the company
- 28 current and former GoStudent staff and faculty said they experienced a poorly run organization with clumsy leadership, Insider writes. They also claimed that GoStudent promoted a party culture and had lax standards for vetting tutors.
- Another GoStudent’s ex-staffer added that founders initially wanted to emulate WeWork’s culture. Employees in the Vienna, London, and France offices said Fridays were seen as party days at the company.
- Two other former employees claimed that tech issues with billing and software systems that weren’t resolved during their tenure. Another former employee felt that the company did not appreciate the legal nuances of expanding across multiple states, saying that the US expansion was “handled by a dedicated team” that considered local legalities.
- In the company’s early days, some former employees described a generally positive environment inside GoStudent:
“Everybody was passionate and enjoyed what they were doing. It wasn’t an issue to work longer hours,” one said, adding that it’s typical at startups to “give 100%.”
Problems with the verification of teachers on GoStudent’s platform
- As of 2021, GoStudent did not check tutors’ IDs in multiple markets outside the UK, current and former employees said, adding that if a tutor was kicked off the platform, they could theoretically use a fake name to sign up and be approved to join again.
- It became known that in August 2022, a 31-year-old tutor had used GoStudent to solicit nude photos from a 15-year-old Austrian boy. GoStudent acknowledged the incident and removed the tutor.
- In 2018 Anthony Canavan, a UK teacher, was banned from his classroom in 2018 after an investigation found he exchanged nudity and discussed sex with a former teenage pupil. But in 2021, he signed up for GoStudent under an assumed name. In March 2021, Canavan was appointed tutor to a 15-year-old girl. Before the first lesson, her father Googled Canavan’s name — and was shocked at the results. He emailed GoStudent, and the company removed Canavan from the platform and said they would report him to police for seeking employment with minors.
- Three such similar cases were found between 2020 and 2022, all tutors were kicked off.
What did the founders say
- GoStudent denied that the founders “have promoted and encouraged a problematic company culture related to partying and alcohol consumption.” They added that it would be fair to say that in the company’s early years it embraced a celebratory culture, however it has since rolled out a set of company values which are reflective of the company’s maturity.
- The company said that over the last 18 months it has invested in enhanced safeguarding processes, procedures and resources, including secure and trusted safeguarding software and a dedicated, trained team of Safety Officers. Furthermore, GoStudent initiated a robust background check process this year, whereby all tutors in all markets must now submit a valid criminal record check, even if this goes beyond local legal requirements.