Startup Deep Dive : Classplus — the app-building platform that now earns more from Testbook than itself

In 2018, 162 venture capitalists turned down Mukul Rustagi and Bhaswat Agarwal’s pitch for a company that would teach nothing, own no content, and hire not a single teacher. By March 2022, two of the same category of investor, Tiger Global and Alpha Wave, had put in enough money to value that company, Classplus, at nearly $600 million.

The bet underneath that valuation was a paradox: the way to help India’s small, offline tutors survive Byju’s and Unacademy was not to build a bigger school, but to hand every neighbourhood coaching centre the same app-and-payments stack the giants had. Today, that infrastructure business earns less revenue than a test-prep company it simply bought.

Quick facts

What they do

Classplus does not teach anyone anything. It sells the software a coaching centre or an individual tutor needs to run a digital business under their own name: a branded Android and iOS app, a website, live-class hosting, recorded-course delivery, fee collection, attendance and test tools, and a way to message students directly. As per reporting from TechCrunch in June 2021, the comparison founders themselves reach for is Shopify, not an edtech marketplace: Classplus never owns the course, sets no curriculum, and does not compete for the student’s attention the way Byju’s or Unacademy does. Its customers are overwhelmingly small: as per Forbes India’s July 2023 reporting, more than one lakh educators and content creators used the platform across 3,000-plus Indian towns and cities, with about 75% of them based in tier-2 markets and smaller. It is, in effect, the back office and storefront for India’s hyperlocal tutoring economy, a market TechCrunch’s 2021 coverage pegged at roughly $30 billion in offline spend. Since September 2022 that core software business has sat alongside a second, larger one: Testbook, a competitive-exam test-prep platform in which Classplus holds a majority, controlling stake, as reported by Inc42 in July 2025.

The origin

Rustagi and Agarwal met in 2007, as teenagers in the same coaching classes preparing for India’s engineering entrance exams, according to Forbes India’s July 2023 profile. Both went on to become engineers by 2013; Agarwal joined Microsoft as a technology strategist while Rustagi worked as a derivatives analyst at Futures First. In August 2015, after a discussion Forbes India describes as lasting six hours, the two quit their jobs to build a startup together, with no fixed idea of what it would be. The insight that eventually became Classplus took over two years to arrive. Watching Byju’s and Unacademy raise hundreds of millions of dollars and pull students onto branded, VC-funded apps, the founders concluded the real fight in Indian education was not “online versus offline” but well-capitalised platforms versus the undercapitalised local tutor who still had the trust and the students, but none of the technology. As Forbes India’s account puts it, Rustagi and Agarwal decided in December 2017 to “become the weapons of the Davids”: rather than compete with the giants for students, they would arm every small coaching centre with the same app-building and payments infrastructure the giants had built for themselves. Classplus launched the following month, in January 2018.

The struggle years

The two years before Classplus existed were not a straight line to that insight. As per Forbes India’s July 2023 reporting, Rustagi and Agarwal raised a modest Rs 50 lakh and then, in their own telling, “tried multiple things, from online tutoring to refining the content of coaching centres to everything,” switching ideas roughly every two months with no fixed plan. Rustagi later admitted plainly: “We never planned. And that was a bad thing to do.” By November 2017, the company had one month of cash left and no product that worked. Even after the pivot to Classplus in January 2018, the market’s scepticism did not disappear: the same Forbes India account records that 162 venture capitalists rejected the Classplus pitch that year, largely because, as Rustagi put it, the company had no precedent and no recognisable name to point to. A second, quieter crisis arrived later, once the company had raised real money. Inc42’s July 2025 reporting on Classplus’s financials describes how the core SaaS business lost momentum once pandemic-era lockdowns ended: as offline coaching reopened, tutors “found less reason to pay for the SaaS tools” and, in Inc42’s words, “many reverted to free options like WhatsApp and YouTube,” a demand problem that shows up directly in the company’s FY22 numbers below.

The turning point

The clearest inflection in Classplus’s numbers is not a product launch; it is an acquisition. In September 2022, as reported by Inc42 in July 2025, Classplus took a controlling stake in Testbook, an exam-preparation platform aimed at students studying for government, banking and other competitive exams. Before the deal closed, Classplus’s own SaaS business had just posted FY22 revenue of ₹26 crore against losses of ₹164 crore, per Inc42’s account of the filings, even after the company had cumulatively raised roughly $159 million by that point. Two fiscal years later, in FY24, consolidated revenue had reached ₹213 crore, roughly $22.2 million at $1 ≈ ₹96.0 (Trading Economics, 18 September 2026), with losses cut to ₹110.4 crore. But the composition of that recovery is the real story: Inc42 reports that Testbook alone contributed 64% of FY24 revenue (₹137 crore), against 34.6% (₹73.9 crore) from the original Classplus SaaS product. As Inc42 put it, “Testbook has basically overtaken the Classplus brand, although it was acquired at a fraction of the investments made in Classplus.” CEO Rustagi has pushed back on the idea that this reflects a struggling core business, telling Inc42 that demand from teachers “who want to build their own websites, apps and maintain a digital presence” is why the SaaS revenue base “has more than doubled” since FY22.

The money behind it

Classplus’s fundraising ran through five identifiable rounds before its most recent, each pulling in a different kind of backer. Blume Ventures led a $1.5 million pre-Series A in 2019, an early, non-obvious bet made the year after 162 investors had passed. Sequoia Capital India’s Surge and other backers then put in roughly $23 million across four rounds within 24 months, as per Forbes India’s February 2021 account, giving the company runway through the pandemic’s first wave. In September 2020, Falcon Edge’s Alpha Wave Incubation led a $10.3 million round, with cricketer Sourav Ganguly and existing investors RTP Global and Blume Ventures participating, valuing Classplus at about $73 million, according to TechCrunch’s June 2021 report. Tiger Global then led a $65 million Series C in June 2021, alongside GSV Ventures, Alpha Wave and RTP Global, at a valuation TechCrunch put at “over $250 million.” The step-change came in March 2022: Tiger Global and Alpha Wave co-led a $70 million round, with Abu Dhabi-based Chimera Investment entering as a new backer, that valued the company near $600 million, more than double the Series C mark, according to both Entrackr and Business Today’s March 2022 reporting, corroborated separately by Blume Ventures’ August 2024 commentary, which also cites a valuation “over $600 million.” Cumulative funding is reported at just over $160 million by Entrackr’s count as of October 2024, though other trackers such as Tracxn put the figure closer to $170 million; neither Entrackr nor Tracxn records a new priced round since that March 2022 Series D.

How it makes money

The core Classplus product earns in two ways. Educators pay an annual subscription for access to the app-building and management stack, with plans that have historically run from roughly ₹15,000 to ₹50,000 a year depending on features, according to trade coverage on the platform’s fee structure published by StartupTalky in August 2022. On top of that, Classplus takes a transaction commission on course sales made through an educator’s app; reviewers and educator forums place this around 15% of course revenue, though Classplus does not publish an official take rate, so that figure should be read as an estimate rather than a disclosed fee. A free entry tier, Classplus Lite, drew roughly 500,000 users during the pandemic, per Forbes India’s February 2021 reporting, acting as a funnel toward paid plans. Layered on top since September 2022 is Testbook, which sells test-prep content and subscriptions directly to students, a more conventional content business that now generates the majority of group revenue. On costs, Entrackr’s October 2024 reporting shows employee expenses were the largest line in FY24 at ₹201.7 crore, 54% of total expenses of ₹375.7 crore, including ₹38.5 crore of ESOP charges. The part outsiders most often get wrong is treating Classplus as an edtech content company competing head-on with Byju’s; for the core product, that is backwards. Classplus’s revenue is not tied to how well any individual educator teaches, only to whether that educator keeps paying for the software and keeps selling through it. Testbook, by contrast, does own content and does compete on it directly, which makes the combined company a hybrid of infrastructure and instruction rather than a pure-play on either.

The numbers

Classplus’s own reported financials, drawn from regulatory filings covered by Inc42 (July 2025) and Entrackr (October 2024), show three consecutive years of the same pattern: fast revenue growth alongside large but narrowing losses.

Total income, which adds items like interest earned on the company’s fixed deposits from prior funding rounds, was higher still: ₹149.2 crore in FY23 and ₹264.7 crore in FY24, a 77.4% year-on-year rise, as reported by Entrackr in October 2024. Efficiency improved alongside growth: EBITDA margin moved from -157.7% in FY23 to -35.99% in FY24, and the amount the company spent to earn each rupee of revenue fell from ₹3.97 to ₹1.77 over the same period, per the same Entrackr report. The FY23 loss of ₹256 crore, notably, was larger than that year’s own revenue from operations, underlining how much of the turnaround between FY23 and FY24 came from the Testbook consolidation rather than organic SaaS growth alone.

Where the money comes from

By FY24, the group’s revenue was no longer dominated by the business it was named after. Inc42’s July 2025 breakdown of the filings puts Testbook at 64% of consolidated revenue (₹137 crore) versus 34.6% (₹73.9 crore) from the core Classplus SaaS product, with the small remainder coming from products and allied services. Geographically, the core SaaS customer base skews away from India’s metros: Forbes India’s July 2023 reporting put 75% of Classplus educators in tier-2 cities and smaller, a figure Blume Ventures’ August 2024 commentary put slightly higher, at 80% of the student base in tier-2 and tier-3 towns. The surprise, then, is not where the geography sits, which is exactly where the founding thesis said it should be, but where the money sits. A company built explicitly to arm small, local tutors against large, centralised edtech platforms now earns most of its revenue from a business, Testbook, that behaves like exactly the kind of centralised content platform it was originally conceived to counter.

The risks

Three risks stand out from the company’s own reported numbers rather than from speculation. First, revenue concentration in an acquired, majority-owned business: with Testbook contributing roughly two-thirds of FY24 group revenue per Inc42’s July 2025 reporting, any slowdown in competitive government and banking exam test-prep demand, or a pricing or execution problem specific to Testbook, would hit Classplus’s consolidated results harder than a setback in the original SaaS product would. Second, elastic demand for the core product: Inc42’s reporting directly links the core business’s post-pandemic slowdown to tutors reverting to free tools such as WhatsApp and YouTube once offline classes reopened, meaning subscription growth is exposed to how urgently a tutor feels the need for a paid app, a need that rises and falls with lockdowns, competitive pressure and the availability of free substitutes. Third, a stalled valuation clock: both Entrackr’s October 2024 reporting and Tracxn’s live company profile record Classplus’s last priced funding round as the roughly $600 million Series D of March 2022, meaning more than three years have passed without a disclosed new round, through a period in which Indian edtech funding cooled sharply after 2022, leaving open whether that mark still holds if the company needs fresh capital.

The takeaway

The transferable lesson from Classplus is not that infrastructure businesses beat content businesses, or the other way round; it is that a founding thesis and a company’s eventual survival strategy do not have to be the same thing. Classplus was built and funded, through 162 rejections and a near-empty runway, on the idea of arming small tutors against large platforms with software alone. That software business, on its own, plateaued once the pandemic-era urgency behind it faded. What rescued the growth story was not a better version of the original SaaS pitch but a willingness to become, in part, exactly the kind of centralised content platform the company was founded to counter, by buying a controlling stake in Testbook. Rustagi has been candid about the cost of the earlier, undisciplined years too, telling Forbes India that over-experimentation and over-hiring senior executives on the basis of experience alone caused the company to lose track of “what you celebrate.” Read together, the founding insight and the acquisition tell a consistent story: the customer Classplus committed to, the small, underserved educator, stayed fixed, even when the product built to serve that customer changed shape twice.

Frequently asked questions

What does Classplus actually sell?

Classplus sells software, not courses: a branded app and website, live-class hosting, payments, attendance and messaging tools that let a tutor or coaching centre run a digital business under its own name, as described in TechCrunch’s June 2021 reporting. Since September 2022 it has also owned a majority stake in Testbook, a test-prep content platform, per Inc42’s July 2025 reporting.

Who founded Classplus and when?

Mukul Rustagi and Bhaswat Agarwal founded Classplus in January 2018 in Delhi NCR, after an earlier, undirected venture attempt between 2015 and 2017 and after 162 venture capitalists rejected their Classplus pitch that same year, according to Forbes India’s July 2023 profile.

How much is Classplus worth?

Classplus was last valued at about $600 million in its Series D round of March 2022, according to both Entrackr and Business Today’s reporting from that month, a figure separately cited by Blume Ventures in August 2024. Neither Entrackr’s October 2024 report nor Tracxn’s company profile records a new priced round since.

Is Classplus profitable?

No. Classplus reported a consolidated net loss of ₹110.4 crore in FY24, though that was 57% narrower than its ₹256 crore loss in FY23, as reported by Entrackr in October 2024.

What is Testbook’s relationship to Classplus?

Testbook is a test-prep platform in which Classplus acquired a majority, controlling stake in September 2022. By FY24 it generated about 64% of the group’s consolidated revenue, more than the original Classplus SaaS product, according to Inc42’s July 2025 reporting.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr, “Classplus revenue spikes 2X to Rs 260 Cr in FY24; cuts losses by 57%”, October 2024
• Entrackr, “Classplus raises $70 Mn at $600 Mn valuation”, March 2022
• Inc42, “Why Classplus Flipped Its Edtech Playbook From SaaS To Test Prep”, July 2025
• Inc42, “Edtech Startup Classplus Raises $62 Mn From Alpha Wave, Tiger Global”, March 2022
• Forbes India, “Classplus: Taking on edtech giants” (30 Under 30, 2021), February 2021
• Forbes India, “Star, Superstar and Class Act: Meet the Sword of Davids”, July 2023
• TechCrunch, “Tiger Global leads $65 million investment in Indian edtech Classplus”, June 2021
• TechCrunch, “India’s Classplus raises $70 million to help teachers and creators expand their reach”, March 2022
• Business Today, “Classplus raises $70 mn; valuation soars 2X to $600 mn”, March 2022
• Blume Ventures, “Championing ‘Mohalle ka Shahrukh Khan’: How Classplus is Transforming Creators into Entrepreneurs”, August 2024
• StartupTalky, “Business Model of Classplus”, August 2022
• Tracxn, Classplus company profile (funding and financials), accessed September 2026

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