How Does Preply Work - Business Model & Key Features

Education throughout the previous decade was witnessing a digital shift. But the outbreak of the COVID19 pandemic has effectively galvanized it into a norm. As many as 1.2 billion children across 186 countries faced an uncertain future as schools were closed to contain the spread of the virus. During this time, we saw the emergence of a number of online tutoring platforms that made it possible for students to continue their studies or acquire new skills without leaving their homes. Before the pandemic, the online education market was projected to reach 350 billion by 2025, but it's safe to say that number will be much higher in a more recent study.

Success Of Online Tutoring Platform Preply

As mentioned earlier, online tutoring had been making headway even before the pandemic but during the past year, the surge in activity has caused an influx of several new startups in this market. Still, a Ukrainian-based business that's witnessed both the pre and post-pandemic era and seen itself scaling new heights, is the subject of this post.

 Launched in November 2012 by Serge Lukianov, Dmytro Voloshyn, and Kirill Bigai (current CEO), Preply was initially an online marketplace for SAT and ACT tutoring. Following an initial angel investment round of $180,000,  the company was tipped to be one of the most promising startups in Ukraine. But come April 2013, the company would relaunch itself as an online tutoring platform due to the growing demand for English online tutoring. 

The company soon expanded into the markets of Belarus, Russia, Kazakhstan and Poland. In 2015, Preply further received an injection of $120,000 from TechStarts. When in 2016, it entered the Brazilian market, Preply announced closing 1.3 million in another round of investment.

2016 would see Preply enter the UK, Germany, and Spanish markets and in 2018, it would go on to raise another round of $4 million fundings.

How Preply Works

As an online tutoring marketplace, the business model of Preply revolves around pairing students with tutors who meet their requirements for online lessons. The platform uses a special algorithm to carry out this pairing process.

Students can search for tutors using a number of criteria such as teacher language, price per lesson, tutor's location and so on. After selecting a teacher, students can view their full profile, where they can find additional information like the tutor's bio, schedule, reviews by other students, and their qualifications.

Once everything looks good, students can go ahead and book a lesson with the teacher, based on the availability set by them on the Preply calendar. Later on, students simply have to join the virtual lesson at the scheduled time. After the lesson's completion, the tutor has to mark it complete and share its duration and summary. Platform then automatically generates a confirmation request for the same to the student. Once this is done, payment is transferred to the tutor's internal account.

Preply takes no responsibility for arranging lessons or managing student curriculum. However, it does offer teachers a great deal of control over all aspects of teaching and networking. They can set their own prices, use their own lesson plans and employ their own strategies to find, connect and secure students.

How Does Preply Earn Money?

Preply's main source of revenue is the commission it charges on tutor's earnings. For starters, it charges 100% commission on every first lesson booked by a new student. So basically, whatever money a student pays a tutor for their first lesson goes entirely to Preply's account. After that, the commission rates drop between 33% to 18% depending on the lesson hours tutor has completed on the platform. While the commission charges may seem extortionate to few teachers, Preply justifies it by pointing to its popularity, trust, and a vast user-base spread across the world.

What Makes Preply The Most Popular Online Tutoring Platform

• Self Intuitive & User-Friendly InterfacePreply is designed with ease of use being its cornerstone. It's ultra-easy to explore and navigate this platform, even for an audience that isn't particularly confident using technology. Preply claims a large share of its revenue is spent in optimizing the usability of its platform and helping people connect with ease.
• Flexible Pricing Model: Preply doesn't have a fixed pricing model. Instead, it allows tutors to set their own rates. depending on their experiences, skill set and ratings received on the platform. Students also get the option to choose the tutor that meets their requirements the best. As mentioned earlier, Preply charges 100% commission from teachers for their very first lesson with a new student. This percentage comes down to 33% after the first 20 hours and can go as low as 18% as the tutor registers more lesson hours on the platform.
• Free Trial For First Lesson: Preply's main advantage to students is the option of a trial first lesson. In this 60 minutes free lesson, students get a chance to get acquainted with their tutor and assess if he/she would be a good fit for them. If they don't like the tutor's teaching style or there's some other issues, they can request for a different tutor and transfer the payment to them.
• Swift Refund Policy: Like all customer-friendly brands, Preply has a refund policy for users who aren't satisfied with its service or their experience on the platform. Interestingly, students have two more options in this scenario. They can either replace their tutor for free or transfer their payment to a different tutor of their choice. However, if a student doesn't want the replacement, they can simply apply for a refund, stating their reason for the same. Refund is successfully processed if it's been less than 90 days since payment and there are no unconfirmed lessons with the tutor for which refund is requested
• Flexible Packages & Discounts: Students can choose anywhere from a 6, 12, or 20 hours of package. The platform incentivizes consistent and regular lessons through discounts. So students get a 2% and 5% discount on 10 hours and 20 hours lessons respectively.