Inside The Unacademy Vs Allen Battle Over Kota’s Celebrity Teachers

“Humara Sir kaisa ho? Puneet sir jaisa ho.”

This is not an election rally or a political campaign, but an equally charged-up atmosphere for an edtech company.

“This is a teacher’s fest,” said one of the attendees at this major celebration in Kota, the city in Rajasthan which is undoubtedly India’s test preparation capital.

Puneet Aggarwal or ‘Puneet Sir’ not only has a huge following for his ability to simplify and break down complex physics problems, but also for his light-hearted moments such as when he would break into a song in the classroom, videos of which have gone viral on social media.

Aggarwal, Rahul Yadav and many of their ilk were welcomed with trumpets and students breaking into a dance when they joined edtech giant Unacademy from Allen Career Institute last month.

A hub for coaching classes trains students to enter premier engineering institutions and medical colleges of India and competition in Kota for teachers and students is as intense as it has ever been, and only set to grow tighter if the past few weeks are any indication.

Many of these star teachers being lauded by Unacademy students were loyalists to the Maheshwari family-run Allen Career Institute, one of the popular coaching classes in Kota. In light of many of its teachers moving to Unacademy in recent weeks, Allen released public statements against edtech companies moving into its territory and poaching teachers.

This is the new trend shaping up in India’s edtech sector — edtech unicorns foraying into offline education by poaching teachers from institutes such as Allen and offering them 2x-3x pay hikes with annual income in the range of INR 1 Cr – INR 10 Cr.

And it’s this frenzy that led to the teacher’s fest where Aggarwal, Yadav and others were celebrated by students.

On his most recent Instagram posts, Yadav can be seen wearing an Unacademy shirt, promoting the edtech unicorn’s new batch of educators which comprise him, Aggarwal and other star teachers from storied offline coaching institutions.

These star teachers not only have years of experience in the test prep space, but a huge following among students on social media and have WhatsApp, Telegram groups, with over 1,000 students in some of these groups.

Given the competition for teachers, and the statements by Allen in the public, Unacademy also sought police protection for some of these top new teachers. And given the craze and mania that follows some of these teachers, the strategy of poaching is more of a customer acquisition play.

Star Teachers Turn Into Student Acquisition Channels

According to sources on the ground and close to the companies, more than 40 educators from Allen Career Institute have already joined Unacademy and the batches have begun. 

Teachers and students leaving Allen may be a bigger concern for the latter — on average, students in the top batches at Allen pay between INR 1 Lakh to INR 2 Lakh, with more than 100 students in each batch.

The steady student enrollment attracted by top teachers is clearly the single most important revenue stream for Allen, something which has cushioned them against online competition till now. But now with teachers jumping ship, things are getting tight for offline giants. 

Inc42 accessed WhatsApp, and Telegram communications between students and the star teachers, where the students showed keen interest in joining Unacademy because their favourite teachers are now with the edtech company. Teachers have a cult following in Kota. 

“It is really never about the institution, but the teacher who is a brand. Like for physics, it is Rahul Yadav sir, so I will go wherever he teaches,” an Allen student from Kota told Inc42.

Sources in Unacademy said that walk-ins, and enrollments have increased at the Kota centre ever since these new teachers have joined the edtech firm. 

The conversations we accessed showed that the teachers are directly facilitating student enrollments through their Instagram profiles, Facebook pages as well as private WhatsApp and Telegram groups.

“We really have no other option. The JEE Advanced and NEET exams are around the corner. So students may hold on for one month. But post that, the students will move to Unacademy since all the teachers at Allen have left,” another student who was a part of the lead batch at Allen said.

This student explained that it takes anywhere between five to six years to complete the test prep course at one institute, and that’s if one hopes to become a part of the lead batch towards the end of the course where the top educators teach.

This also implies that with the top teachers leaving Allen, the offline institute also risks losing some of the oldest and brightest students in a particular batch.

The Battle For Dollars 

Even though this is the first year of inception of Unacademy’s Kota centre, the millions of dollars it will spend on teacher salaries could be just a fraction of the revenue it will earn from these teachers bringing in students, according to the founder of an edtech upskilling and test preparation startup.

Throwing money at teachers is not new in this context. Allen has been known to offer BMW cars and cheques worth crores to some star teachers and students who topped the JEE exams.

Conservative estimates by Inc42 based on conversations with sources suggest that the Kota centre for Allen alone draws nearly INR 1,500 Cr annually with average enrollments somewhere around 1 lakh. In May 2022, Allen said that it has 2 lakh students all over the country, with half of them in Kota alone. 

By our calculations, the company brought in INR 3,000 Cr in revenue in the past year. Allen also raised INR 4,500 Cr ($600 Mn) from James Murdoch and Uday Shanka-backed Bodhi Tree Systems in May this year. 

So the stakes are very high. Millions of dollars of revenue is locked inside Kota, and that’s why the battle is so hard-fought. 

Why The Outcry Over Poaching?

Edtech startup founders who have come through the Kota route told us that poaching of teachers isn’t really a new phenomenon in the city. So why the uproar by established players now?

Why are offline institutions releasing video statements and threatening to blacklist teachers, who essentially are the core assets of their business? 

That is because like every industry, cash is the king in the coaching class industry too. 

Edtech startups in India are currently scrambling to find consistent revenue streams especially post-Covid. BYJU’S, Unacademy and others raised significant amounts of capital in 2020 and 2021 and now have resorted to cost-cutting by laying off employees, revisiting their strategies and pushing for offline education which at least promises a consistent source of revenue.

The technology prowess built by these unicorns is seen as a competitive advantage that will pull digitally savvy students from all over the country and streamline the unorganised market.

Dinesh Kumar Goel, chairman of coaching giant FIITJEE told Inc42, “Poaching of teachers should be made a cognisable offence as it spoils students’ lives. Education can’t be like a regular commercial business. A student’s career is of utmost importance.”

The government, on the other hand, is working on a set of regulations to monitor the fast-paced, well-funded edtech sector of India.

“We have found that some edtech companies are exploiting students in the name of loan-based courses… The companies are welcome to do business in India but they cannot exploit students. I have asked all departments to issue strict advisories in this regard. We are also talking to the Ministry of Electronics and Information and Technology as well as the law department about how we can have a common policy on edtech platforms in India,” union education minister, Dharmendra Pradhan said during an AICTE event recently.

Even as it seems like the offline education firms and edtech companies are shelling out big money to secure top teachers, the multi-billion dollar unorganised private tuition market is being targeted with the millions of engineering and medical exams aspirants at the core.  

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