The head of Skyeng - RBC: "We have no idea where we will take investments from"

The demand for English will grow despite the break with the West, but Skyeng will not be able to become a “unicorn” in the coming years, Alexander Laryanovsky admits,Managing partner of a startup from the FORBES list with investments from Baring Vostok Alexander Laryanovsky

About changes after February 24

“While we are in a state of maximum uncertainty. In the first days of the special operation, February 24-26, the planning horizon was reduced to several hours. Now it has risen to a week. At the same time, back in January it was possible to think in terms of five years. We do not have sanctioned persons among investors. But technical difficulties arose: while Roskomnadzor blocked someone, we accidentally fell under the distribution. The blocking of foreign resources affected some of the services that are integrated within our platform. This went on for about a month. There were also serious DDoS attacks.

In March, Russian students from two Ukrainian English schools, All Right and EnglishDom, moved to Skyeng, who ceased their activities in RUSSIA after the outbreak of hostilities. The terms of these deals were not disclosed.

The weighted average price of a lesson at Skyeng is now about 800 rubles. It is expected that in the future, along with rising inflation, prices for services in Russia will grow, this will also affect Skyeng. But we do not expect that because of this, an outflow of customers will begin. During the crisis, the demand for education, religion and psychological trainings is growing. You can’t exist in stress for a long time, you have to calm yourself somehow. Learning a language online is more profitable and effective, since in person you usually have to study in groups. There is an opinion that it is impossible to meet on Tinder, just like it is impossible to learn English on Skyeng. Allegedly, all digital services are interested in the fact that users return to them again and again and, accordingly, pay. I don't agree with this. For a digital service, virality is a content characteristic that determines whether How likely readers are to want to share a post is the most important metric. If we have not given any result to a person, then there will be no virality. This is first. Secondly, the concept of "learning a language" does not exist. Suppose a tourist can speak in English-speaking countries. Did he learn the language or not yet? What if he writes poetry in English? The answer looks like this: the user had some kind of goal, he achieved it, he had a new task, he went on to solve it. Did he learn the language or not yet? What if he writes poetry in English? The answer looks like this: the user had some kind of goal, he achieved it, he had a new task, he went on to solve it. Did he learn the language or not yet? What if he writes poetry in English? The answer looks like this: the user had some kind of goal, he achieved it, he had a new task, he went on to solve it.

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What is skyeng

Skyeng was founded in 2012 by students of the Moscow Institute of Physics and Technology (MIPT) Georgy Solovyov, Khariton Matveev, Andrey Yaunzem and Denis Smetnev. The startup offers English lessons for adults, children (Skysmart), as well as various professional courses (Skypro). In October 2013, Alexander Laryanovskiy, DIRECTOR of international development at Yandex, invested $300,000 in the company. In 2018, the Baring Vostok fund became Skyeng's investor. The amount of investments was not disclosed, it was only reported that during the round the company received a record valuation for the Russian EdTech market of $100 million. In 2020, Forbes included Skyeng in the list of the most expensive Runet companies with a valuation of $130 million.

In Russia, the company is represented by the educational autonomous non-profit organization of additional education "Skaeng". According to SPARK, the revenue of this organization in 2021 is 2.35 billion rubles, net profit is 247.3 million rubles. It belongs to Skaeng LLC, which, in turn, is owned by Khariton Matveev (61%) and Cypriot Vimbox Limited. Services to users outside Russia are provided by the Cypriot Agaton Limited, its financial performance is not disclosed.

About the business structure

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“We started as an English school for adults, then in 2017 we opened a children's direction: children's English, children's mathematics, chess, programming, etc. Last year we invested 350 million rubles. in the launch of the Skypro online university of digital professions, this is an additional professional education. It was expected that by the end of last year there would be at least 7 thousand students, and the revenue would be about 300 million rubles. This has been achieved.

Children's and adult education bring about 49% of revenue each, additional professional education - about 2%. Which of these three niches will remain in the future is not yet clear.

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The size of the market for additional professional education in Russia is estimated at 140 billion to 220 billion rubles. and above, and offline and online school additional education - 150 billion rubles. Skyeng occupies about 20% of the total online education market, we are not yet noticeable in the market of additional professional education.

Alexander Laryanovsky (Photo: Oleg Yakovlev / RBC)

Over 100,000 adults are currently studying English at Skyeng. At Skysmart, more than 50,000 children and teenagers study English and Russian, mathematics, physics, social studies, chess, programming, as well as prepare for the State Examination and Unified State Examination and take courses for preschoolers.

Over the past year, the number of children and adults who are learning with a teacher on the platform has increased by 60%, and the business continues to grow. The main competitor of adult education is series and VKontakte. People spend their time not on self-development, but on light dopamine shots. In children's education, the competitor that needs to be fought is the Unified State Examination, coaching on the ability to pass tests, instead of teaching a teenager to understand the meaning of the subject.

If we take 145 million people in Russia, cut off very young children and people of mature age, 100 million will remain. If we further reduce this part, guided by the principle of people's readiness to learn, 1-2% of the population will remain. These are the clients that can be poached from each other with the developers of other online education services - VK, Yandex and Sberbank. That is, all players are trampling on a super-small patch.

About departing employees

“At the end of March, the Russian Association for Electronic Communications estimated the number of IT specialists who left Russia after the start of the military operation in Ukraine at 50-70 thousand people. In April, according to the forecast of the organization, another 70-100 thousand IT specialists could leave. However, at the end of April, representatives of the authorities started talking about the fact that some of the IT specialists who left were starting to return.

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Some large Russian IT companies told employees who left after February 24 to write a letter of resignation. Allegedly, they do not want to work with those who left the country. In addition, many now have difficulties with paying salaries to employees abroad: Russian cards do not work in other countries, and they have to figure out how to withdraw money from them. We have no problems with both remote work and payments. From the first day of its existence, the company can be called an adept of remote work. We have always had people working from those parts of the globe where it is convenient for them. If only there was internet. Tens of thousands of teachers working on the platform live in different countries. In addition to companies in Cyprus, Skyeng has an office in Spain, which makes it easier to pay salaries to such employees. Today we have several thousand, or about 5%, clients are international. They did not refuse to study. Only a few of the foreign teachers refused to cooperate with us.”

About not knowing English in Russia

“Two-thirds of paying users, as a rule, are Muscovites or residents of St. Petersburg, slightly more women than men, they are about 30 years old. Naturally, their income is quite high. Also in the adult English segment, about a quarter of the revenue comes from companies that pay for their employees.

Residents of Moscow and St. Petersburg predominate in the children's direction, there are almost no students in the regions. Everyone there lives quite poorly, so no matter how many diplomas the parents have, the child does not understand how education can change his life. Education is not popular there. Why waste time and money studying English if you will never need it in your life? There were many foreign companies operating in Moscow before the special military operation, it was possible to get a job and get more money, in which case the investment in learning the language was reasonable. This was not the case in the regions.

In a small town, a nanny in a kindergarten works part-time there as a cleaning lady, because she will not survive on one rate. She works 10-12 hours a day, and we need to somehow get into her HEAD and say: come, we can make your life better. But we still do not know how to talk to them in their language. The well-fed does not understand the hungry. These people have a planning horizon of two days when they must find money to feed themselves and their children.

But one should not assume that from now on, with the termination of the work of foreign companies in Russia, the study of English will come to naught. Import substitution in many areas has now become an urgent need. The accumulated baggage of knowledge in the world is usually not in Russian. English will be in demand not to go somewhere or get a job, but to read and understand where the rest of the world is going, and try to repeat it in your own country.”

About future

“If you look at what support measures were announced by the Ministry of Digital Development, we can conclude that the country really needs the IT industry. The authorities say: we are now placing our bets on you and are waiting for a certain number of feats from you so that the Russian economy has a reserve for the future. But from the side of the Ministry of Education or the Ministry of Science and Education, there are no words or actions now. Therefore, the answer to the question whether the country needs our market is negative. If they don't say anything, then we're not needed.

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Nevertheless, we must continue to work. We have no idea where we will take investments from. Now all investors in the same way took a wait-and-see attitude. The Russian venture capital market has been destroyed. That, however, does not mean that people do not have money. Countries that are considered unfriendly to us are unlikely to have any interests in Russia. As for the rest of the world, Asia, for example, will wait, watch, then in about six months solutions may appear. Therefore, for the time being, we rely only on our own strength and finance our growth ourselves.

In 2020, Forbes included Skyeng in the top of the most valuable Runet companies, and since then we have been present in this rating every year. Perhaps some hoped that we could become a "unicorn" - get a $1 billion valuation. On the existing planning horizon, no Russian company in the next 5-10 years will be able to become a "unicorn".

Alexander Laryanovsky (Photo: Oleg Yakovlev / RBC)