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Monday, May 27, 2024

FunctionUp kickstarts tech careers through pay-after-placement model

FunctionUp, an edtech firm founded in 2021, uses a pay-after-placement strategy to teach students in backend engineering, coding, and programming.

Bharat Gupta and Pritesh Kumar, serial entrepreneurs, created FunctionUp in 2021 to bridge the gap between academic education and employment skills.

According to Bharat Gupta, Co-Founder of FunctionUp, “A typical educational result is employment. Outcome-based courses have a high course completion rate and a strong influence on students’ careers among edtech enterprises “

FunctionUp is a Y-Combinator-backed backend engineering learning platform that teaches applicants from any background in software development courses. FunctionUp now boasts a staff of 30 mentors from various NITs, IITs, ISBs, and IIMs in India, as well as over 4,000 students.

The business has seen a 150 percent monthly increase in the number of enrolled students over the previous nine months. The Bengaluru-based edtech firm received $1.5 million in angel and pre-Series A funding from Goodwater Capital, Y-Combinator, Kunal Shah, Anupam Mittal, LetsVenture, Upsparks, Atrium Angels, and Core91 VC.

How does it work?

FunctionUp receives between 35,000 and 40,000 applications every month and picks the best 2% (about 800-1000 students) in its cohort. Every six weeks, the startup starts a new cohort.

FunctionUp has launched nine cohorts since its beginning, with three cohorts having already graduated. The startup focuses on backend engineering, coding, and programming languages, with each course lasting up to four months.

In addition, students must devote a total of nine hours every day on software development. According to the Bengaluru-based business, roughly 75% of its students get placed immediately after the course concludes, while 20% find work within three months.

The remaining 5% of students find work within a year after completing the course.

FunctionUp alumni have found jobs in companies such as Paytm, NoBroker, Justdial, Klub, Dr Reddys, Sunstone Eduversity, Medpiper, and Winuall.

“We have strong ties to the industry. We only collect fees once the pupils have been placed “Bharat explains.

According to Statista, the Indian edtech market is predicted to reach $10.4 billion by 2025, with upskilling edtech businesses accounting for $0.73 billion.

According to a blog post by Keshav Bagri, VC of Bertelsmann India, just 35% of students are placed at the completion of an MBA program in India.

“The pay-for-performance model has emerged as a viable approach to addressing this quality quandary and ensuring that universities focus on not just churning out graduates in mass but also on providing them with viable employment at the end,” according to the blog.

FunctionUp, an edtech firm, implements a pay-after-placement business model and enters an Income-Share Agreement (ISA) with its students, in which they pay the startup 17 percent of their monthly compensation for 36 months. An ISA assists students in avoiding paying school fees at the start of the course by guaranteeing the institute a particular proportion of their income for a set period of time after they have a steady employment.

In India, startups such as Sunstone Eduversity, Lamda, and LEAP School are adopting ISA principles.

“Graduate degrees cost between Rs 6-12 lakh in education debt for college grads. And, once students graduate, these universities do not assist them in finding work.

We didn’t want to be a financial burden to anyone “Bharat explains.

FunctionUp has partnered with a few NBFCs—Eduvanz, Liquiloans, and PropellD—to track payments, which is similar to how banks manage education loan repayments.

It has set a limit of Rs 3.5 lakh, after which the company would no longer accept payments.

Furthermore, applicants who are not placed are not charged by FunctionUp.

The road ahead

FunctionUp plans to expand its services in the future to include data analytics, front-end engineering, and UI/UX courses. It competes with other edtech-upskilling firms such as Scaler Academy, Newton School, Udemy, and others.

FunctionUp has collaborated with the National Skills Development Council (NSDC) and hopes to participate in future government programs.


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