BERLIN – In a small theater in the middle of Berlin's Kreuzberg district, a Ukrainian entrepreneur comes on stage to music playing from the American drama series “The Game of Thrones.” Taking place on Sept. 10, it was the culmination of three months of working on product design, marketing and fundraising at the TechStars Berlin business accelerator.
To complete the program, Kirill Bigai, the founder and CEO of online private tutorial platform Preply, gave a demonstration of his web-based product along with nine other graduating teams to a group of investors.
Preply was founded in 2012 as a marketplace for private tutoring in Ukraine. More than 11,000 teachers from around the world have since used the web-based platform. Unlike most competitors, the startup offers a payment protection and ranking, as well as recommendation algorithms.
However, once lessons are scheduled, most of them happen offline.
“Our tutors offer lessons both on Skype and in person,” Bigai told the Kyiv Post. “The market is moving online but currently local in-person tutoring represents some 80 percent of all lessons.”
Before entering the business guidance program in Berlin, Preply had graduated from the Kyiv-based startup accelerator EastLabs, receiving $20,000 in funding. It then raised an additional $150,000 from U.S.-based angel investors, including Semyon Dukach, managing director at TechStars Boston.
Going through two acceleration programs is unusual for a startup because it’s supposed to get on track after the first one. Also uncommon was that Preply was profitable and expanding to markets in Russia and Poland when it enrolled for the Berlin program.
“It was Semyon (Dukach) who suggested that we apply to TechStars Berlin. We were skeptical, but he said even though TechStars takes 6 percent of the company, the increase in valuation upon graduation will still be higher,” Bigai said. “TechStars is a brand, as a graduate you can reach any investor in the world.”
The team never regretted the choice, Bigai added. Upon acceptance, the startup received $100,000 in funding and an additional $20,000 to cover living expenses, as well as numerous perks from sponsors and partners.
Ye the main benefits were the knowledge and experience the teams got from their mentors during the program.
“The second and fourth weeks of the first month are officially called Mentor Madness,” Bigai said. “Every day we had nine to twelve 15-minute meetings with mentors in the morning, 50 meetings a week. The people we met are the leaders of the ecosystem, we talked to executives from SoundCloud, Delivery Hero, Shutterstock and top investors from Europe, mostly from Berlin, London, and Munich. The second half of the day we spent writing follow-up emails.”
More meetings with mentors took place in the second month based on product improvement.
“We normally worked six days a week, twelve hours a day,” the Ukrainian entrepreneur said.
The CEO took three colleagues with him to Berlin, leaving another four in Kyiv to ensure the website works without interruption. Preply has grown to 15 people.
Bigai stayed in Berlin after graduating from TechStars. He’s currently in talks with investors about a new funding round. With the additional money, Preply will open an office in Germany and begin expansion in Western Europe.
“We’re looking for money to scale rapidly,” Bigai said. “We’re not disclosing the exact amount but we’re after a seed round, which is normally anywhere between €500,000 and €2 million.”
Germany is a huge market for online private tutoring with not many other players working on it, according to Bigai.
“It’s important for us to find a European investor with experience in building big businesses,” he said. “We’re talking to a few venture capitalists from Poland, Germany, and the U.K.”
Although in need of funding, the team is not considering Ukrainian investors, citing a “different mindset” and the “lack of experience” compared to those in the European Union, among other reasons.
Thinking ahead, Bigai wants to have a leading position in Germany within a year, and raise another funding round to rapidly expand into more markets. That’s a textbook strategy for a startup with global ambitions and Preply has every chance of becoming one of the first Ukrainian companies to make this happen.
Freelance writer
Andrii Degeler can be reached at [email protected].The Kyiv Post’s IT coverage is sponsored by AVentures Capital, Ciklum, FISON and SoftServe.
