San Francisco-based education startup StudySoup, which calls itself “a peer-to-peer learning marketplace,” announced it has raised $1.7 million in seed funding.
The company works as an online study group where students can sell or purchase class notes and study guides. “We realized that a lot of students come to college on very different levels,” Sieva Kozinsky, 26, co-founder and CEO, said in a phone interview with TechCrunch. “They’re all expected to hit the ground running and to get on the same page, and unfortunately it leads to a lot of failures, because people are totally unprepared and there isn’t the right support there.”
Kozinsky said that the first spark for StudySoup was ignited when he was taking a Biology 1 class as a sophomore at UC Santa Barbara. According to him, there were 500 students in that class and the teacher would speak really fast. “Unfortunately, I was not able to listen and take notes at the same time,” Kozinsky recalled. “One day, I looked over to the young lady who was sitting to my side, and she had perfectly structured notes in different colors, very nicely organized.”
After that, Kozinsky and fellow UCSB undergrad Jeff Silverman, co-founder of StudySoup, discovered that more than one in three students drop out college because of financial reasons or because they don’t get the support they need. This was the case for one of Kozinsky’s roommates, as well.
Even if several of the bigger universities offer academic support to their students, these services are not available everywhere. What can really help students, according to Kozinsky, is learning from their peers.
On one side of the marketplace — the supply — there are people who provide the content: excellent note takers who want to make some extra cash by selling their notes. StudySoup calls them “Elite Notetakers.” Students need to apply to become Elite Notetakers, and complete a training about what kind of materials they should post and how often.
According to Kozinsky, Elite Notetakers can earn from $400 to $500 per course by posting once a week, for a total of about 15 pieces of content. The company shares revenue with the Elite Notetakers. “We keep about 30 percent of the revenue they make,” Kozinsky said. “But unlike Airbnb or Uber, we offer a guarantee for students. If you just sign up and you go through the training, you are guaranteed to earn money. And every time somebody uses your notes, you’re going to unlock new revenue.”
On the other side of the business — the demand — there are students from a variety of backgrounds, from strugglers to top performers. They can search notes by note taker, class or professor. Subscriptions cost from $11 to $30 a month.
StudySoup started on three campuses in 2014. One was the campus where the co-founders were studying, UC Santa Barbara. The others were the University of Oregon and the University of Washington. “We picked schools that were similar to UC Santa Barbara in size and demographics, but also that were across different state lines,” Kozinsky explained. “We wanted to make sure that students need this help everywhere.”
According to the company, 2,000 Elite Notetakers, 150 schools and more than 500,000 students are part of the StudySoup network. StudySoup is primarily used by undergrads, but 20 percent of users are graduate students pursuing medical or law school.
Participants in this round of funding were 1776 DC, Canyon Creek Capital, 500 Startups and a few angels such as John Katzman, Jake Gibson and Leonard Lodish. “Our focus at StudySoup is building an academic service department online,” said Kozinsky. “We wanted to make sure that our investors were aligned with this kind of long-term vision.”
Thanks to the $1.7 million, the company is going to expand its product team by hiring a couple more engineers and to invest in marketing and advertising to let students nationwide know about StudySoup.
“In the next five years, we want to continue our expansion across different college campuses. Also, we want to provide new products to our current students, so they can keep making money on the platform,” Kozinsky said. For example, a flash card study tool, which is currently in beta.