Coaching classes made them millionaires; now, they're turning entrepreneurs

Summary

Armed with wealth, reputation and a loyal student following, a few teachers who once commanded giant paycheques are embracing entrepreneurship and taking on established names in India's $14.8 billion-plus test-prep market. Can they succeed?

Mumbai: Rakesh Goyal, a 35-year-old mathematics teacher originally from Dabla, a small village in Rajasthan, could easily have built a career overseas as a researcher. After graduating from the Indian Institute of Technology, Patna, Goyal went to Washington State University in 2013, and was set for a well-paying career as an electrical and computer engineering researcher. Instead, he chose to return to India to pursue what he described as his real calling: teaching.

Over nearly nine years, he worked as a mathematics faculty member at companies such as Resonance and Byju's-run Toppr. That was until 2022, when his career took off during the offline coaching boom, as edtech disruptors began offering renowned teachers packages in crores to cash in on their reputation and attract students. Goyal was hired by Physics Wallah, where his total compensation eventually crossed ₹1 crore. Four years later, he walked away from that paycheque.

In February, Goyal and Tejendra Singh, his senior at IIT-Patna and a former Walmart software engineer, launched OziTutors, a Noida-headquartered edtech company that connects students and tutors. "Ozi gives me the opportunity to combine great teachers with technology and scale personalized learning to a much larger number of students," Goyal told Mint.

In Kota, the epicentre of India's test-prep coaching market, chemistry teacher Chaandeep K. Singhal, who spent about 25 years teaching at Resonance and Allen-acquired entity Reliable, has started his own company, Arke Scholars Pvt. Ltd.

The startup, which combines K-12 education with test preparation, is being built around personalised assessments and AI-led analytics.

"Students can create papers based on difficulty levels, while the platform analyzes their performance and flags learning gaps to teachers, principals and parents," Singhal told Mint. "The programme includes mentorship from IIT and IIM students and alumni." He added that the Madhya Pradesh government has given Arke Scholars 1,800 students as a pilot.

In his 1903 play Man and Superman, George Bernard Shaw wrote, "Those who can, do; those who can't, teach." Goyal, Singhal and a couple of others have set out to prove that so-called maxim wrong. Armed with wealth, reputation and a loyal student following, these teachers, who once commanded giant paycheques, have turned entrepreneurs.

They have launched coaching centres and education startups, taking on established names in India's $14.8 billion-plus test-prep market (valuation as of FY26, per Redseer Strategy Consultants). One has decided to steer clear of education altogether and ventured into agriculture.

But will these teachers be able to do, and turn their startups into viable businesses?

Raking in the moolah

The Covid-era edtech boom, fuelled by easy money, sparked a faculty poaching war, as companies raced to expand their student bases by acquiring teachers who had already had a loyal following among aspirants.

These eminent teachers thus turned into valuable -- and extremely expensive -- assets in India's test-prep ecosystem.

For instance, Mohit Bhargava, a popular teacher from Kota, commanded as much as ₹7 crore under a three-year contract with Unacademy, according to two sources Mint spoke to on condition of anonymity. Bhargava was among 40 educators that Unacademy poached from rival Allen in 2022.

The compensation wasn't about the salary alone. The edtechs offered employees and educators generous salaries as well as equity.

Unacademy's stock-option buybacks in the run up to its acquisition by Ronnie Screwvala's UpGrad gave some employees an opportunity to monetise their equity.

Bhargava quit Unacademy last November and soon after launched AcadXL, a Kota-based offline venture offering coaching for the JEE Mains and Advanced exams, along with online courses for the same.

Mint made multiple requests for a conversation with Bhargava over the past month, without success.

At Physics Wallah, Goyal's approximately ₹1 crore compensation included an equity component. "My fixed compensation plus performance-linked bonus was approximately ₹65 lakh per year, in addition to an equity component valued at more than ₹1 crore at the relevant valuation," Goyal said.

He spent about three-and-a-half years at the company. Physics Wallah went public last November, giving employees and educators holding equity an opportunity to monetise their holdings.

Goyal declined to disclose the details of any equity transactions, including the number of options exercised or sold and the proceeds realised. "The equity was a meaningful component of my compensation," he admitted. "But my decision to build Ozi was driven by the opportunity to build a company rather than by a personal liquidity event."

When the cows come home

Prashant Jain, an Unacademy educator and mathematics author, has also taken the entrepreneurial leap with his riches.

But unlike Goyal and Bhargava, the dairy farmer, who still teaches at Unacademy, is not attempting to monetize his background in education through a coaching business.

Jain, a Kota veteran, had entered the education field after working in investment banking. He views the business as a difficult market for a new entrepreneur because of its high entry barriers and dependence on distribution. "I do not want to pursue entrepreneurship in the education sector," Jain reiterated, adding that he had instead chosen to go in a completely different direction.

The IIT-Bombay graduate believes his operational skills can be applied in the farm sector, and is building an agritech startup called Haroti Farms in Sultanpur, Kota. Jain says his years at Unacademy taught him the operational discipline required to run a business -- from understanding unit economics to breaking monthly plans into daily targets and tracking execution.

Haroti Farms is focusing on organic farming and building its own dairy, with plans to sell A2 milk online. A2 is a type of cow milk that has A2 beta-casein protein and does not contain the A1 beta-casein protein found in regular milk, which creates digestive issues in some people.

The company will also supply vermicompost and other products to farmers through farmer-producer organizations. Jain said the company eventually plans to scale to 2,000-3,000 cows, making it a capital-intensive business.

The venture is being funded initially with $1 million of capital put in by Jain and his partner from their own earnings. The plan is to raise external funding later, while building a profitable business.

A changed landscape

The idea of a teacher turning entrepreneur is hardly new in Indian education. Some of the country's largest education companies were built by teachers, who started with a direct understanding of students' needs.

Physics Wallah co-founder Alakh Pandey began his career as a teacher before building the company into one of India's largest edtech platforms. The four co-founders at Vedantu -- Vamsi Krishna, Anand Prakash, Pulkit Jain and Saurabh Saxena -- were also teachers, while Byju Raveendran began by teaching students before building Byju's.

For the current crop of teachers, however, the starting point is different.

Unlike earlier teacher-turned-founders who had to build their student base from scratch, often using YouTube as a medium, the ones trying their hand at entrepreneurship today have an existing audience, years of pedagogical experience and, in some cases, substantial personal capital.

Despite those advantages, however, these teacher-founders have to deal with a different test-prep environment. The industry has given up the aggressive compensation of the recent past and become extremely cost conscious.

The coaching hub Kota, meanwhile, has taken a reputational hit and rising compliance costs have added pressure to the economics of running large teaching businesses.

"Faculty salaries in Kota's offline coaching ecosystem have corrected significantly from the peak of the faculty war. Senior faculty who were commanding packages of ₹50 lakh or more are now seeing offers in the range of ₹25-30 lakh at the higher end," a person aware of the change said.

"Star faculty salaries have also come down from the peak. Teachers who were commanding as much as ₹2.3 crore during the height of the poaching war are now being offered around ₹1.5-1.8 crore at the upper end of the market," the person added.

Moreover, while teachers with an established following can use the same reputation to build businesses of their own, that does not necessarily mean every teacher-founder can build a venture-backed startup.

"Most edtechs have started off with a good teacher trying to scale up the operation. However, that is not always easy and requires a broader skill set," Nitin Kukreja, CEO of Allen, told Mint.

Once a company expands, professionalisation and governance become increasingly important. "You can be a star teacher, but that's an individual contributor," said Amit Nawka, a partner in PwC India's deals practice and an advisor on digital sector transactions, particularly in education and skilling.

The difficulty, Nawka said, lies in replicating that individual appeal across an institution with thousands of teachers and lakhs of students. For instance, Physics Wallah's Pandey combined the pull of a star teacher with an institution, allowing the business to move beyond the limits of one individual, he pointed out.

The economics, however, can look attractive on a small scale -- particularly when the founder is a star teacher. Revenue comes from student fees, while faculty compensation is the largest cost, with support staff, teaching material and infrastructure accounting for a smaller share.

A popular teacher can serve a large student base without a proportionate increase in costs, allowing much of the revenue to flow to the bottom line. "A star teacher can drive very strong margins even in a well-governed institution, because the revenue they generate does not require proportionate investment in infrastructure," Nawka said.

But those economics change as the business expands. A run-of-the-mill coaching institute has to compete on pricing, while a business expanding beyond its star teacher has to spend more on infrastructure, marketing and entering new geographies, said Nawka.

On his part, Goyal has kept OziTutors asset-light so far. The startup is essentially an aggregator connecting tutors with students, much like an Uber or Zomato. It has currently onboarded over 1,800 tutors. The tutors set their own prices for students, and Ozi earns a commission of approximately 15%.

"The platform has facilitated over 1,500 live classes in the last three months," Goyal said.

Funding scarcity

Singhal, known as 'CDS sir' by his students, is funding Arke Scholars with his own money and has invested about ₹1.25 crore in the startup so far. He is now looking for external funding to expand. But that may prove to be easier said than done.

Raising external funding remains a huge challenge for edtechs today. Investors in funded edtech firms, in fact, have pushed for exits. Companies have either moved towards IPOs or are slowly preparing for the same.

Kukreja expects founders to potentially spend two to three years building their businesses before institutional capital becomes available. "While the potential of the Indian education sector remains intact, given the excesses of the past, founders will have to spend at least 2-3 years demonstrating educational outcomes, building a robust business model and a management team before capital becomes available," he said.

The test-prep market itself adds another constraint. While capital has not disappeared from education altogether, conventional test-prep remains a difficult proposition for investors.

Harsha Kumar, a partner at Lightspeed, who invests in consumer-tech, fintech and sustainability startups, said the firm is seeing relatively few new test-prep startups that are reaching the venture-capital stage, with most new businesses remaining small ventures. "Test prep is a steady market, but from my lens, it is not at the frontier," she said.

The challenge, Kumar said, is partly structural. The largest test-prep categories remain concentrated around exams such as IIT-JEE, NEET and government jobs, while parents continue to prioritise tuition and coaching over software products.

Engagement with education software also tends to be concentrated around examination periods, which shapes how much annual recurring revenue per user companies can make.

"The future of education is going to be much more dynamic and hyper-personalised, with content being generated on the fly," Kumar added.

PwC India's Nawka, however, says the new breed of teacher-turned-entrepreneurs are beginning to attract venture capital interest, claiming that he is seeing companies founded by former coaching professionals raising capital. He, however, declined to share details saying these private funding rounds are underway. Mint could not independently ascertain if such rounds are in the works.

Cost and differentiation play a crucial role in determining success. "Businesses that are building AI-first test-prep can lower the cost of creating content while differentiating themselves through personalised learning and star teacher-led high customer acquisition early on," Nawka added.

OziTutors, for instance, is also building technology products around live classes, AI-powered session analysis and learning assistance.

For traditional coaching, Nawka expects the market may not produce many new, organically built institutions on the same scale as the largest incumbents. Instead, smaller coaching businesses with strong local brands and student followings could become acquisition targets for larger, funded education companies.

For the teacher entrepreneurs themselves, that creates another possible outcome. Allen is open to inorganic expansion, Kukreja said, but added that the company will be "very strategic about any new acquisitions."

So is Physics Wallah; Prateek Maheshwari, co-founder of the company, told Mint that some of these new ventures could eventually become M&A targets for established names. "This is a fertile ground to find acquisition targets."

While they are brimming with confidence, the new breed of teacher-founders are well aware that building a venture-scale education company in the current environment will take more than pedagogical prowess.

Multiplying revenue and building scale are not simply a question of solving a linear equation, but about progressing in the face of myriad operational challenges. It's not an easy problem to solve. Goyal, the math teacher, can attest to that.

Key Takeaways

* >$14.8 billion | Size of India's test-prep market as of FY26, according to an estimate by Redseer Strategy Consultants.

* ₹3,480 crore | Size of Physics Wallah's IPO last year. The offer enabled many teachers to monetise their holdings.