Gauthier Van Malderen
(Picture: Gauthier Van Malderen)Gauthier Van Malderen was studying economics and entrepreneurship at Cambridge, wincing at that universal student experience of spending “£200-plus on textbooks but only needing one chapter from each.” Some amongst us might have turned to some not-very-legal photocopying.
Not Van Malderen - he decided to start a textbook subscription website, Perlego. Its fortunes have soared since the pandemic forced millions of university students to flee their campuses - and turnover at the ‘Spotify for textbooks’ is set to hit $30 million this year.
The Belgian-born entrepreneur (he moved to the UK in 2016, but spent a decade of his childhood here too) saw a big opportunity.
“My fellow students were pirating textbooks to save money. At the same time, the big five publishers were suffering from falling revenues and were changing ownership from public to private. I wanted to create a company that would offer students a valuable digital alternative and help publishers stop haemorrhaging losses.”
But Van Malderen, who was 26 at the time, faced a chicken-and-egg situation of how to lure publishers to his platform to host content that would attract students - when he didn’t have any content or members. Cash from a $1 million seed round helped: he emailed investors including LoveFilm co-founder Simon Franks, who backed him alongside his friend Alex Chesterman, of Zoopla and Cazoo. Van Malderen already had two businesses behind him: a hoodie-maker he’d set up in Belgium, and Iconic Matter, a student marketing agency that he built up for four years before selling to a major French media company for a six-figure sum.
“It was a long hard slog at the start - I had no publishing expertise,” Van Malderen explains. “I went to events like the London Book Fair, and publishers were saying ‘who is this crazy kid?’ But we had 250 publishers by the end of the first year, and about 50,000 ebooks, and started to get our first users.”
Then along came Covid.
“Like most edtech businesses, the pandemic has been a huge growth stimulus for us. Universities were closed. Students and professors were trying to find ways to access the learning material they needed to succeed - and bookstores closed, so publishers wanted to explore digital alternatives to print books that accelerated the interest in digitisation across the industry. Fortunately, we already had a solid foundation from which we could scale to meet this demand.”
Perlego
Founded: 2017
HQ: Chancery Lane
Turnover: $10.5 million to February 2022
Staff: 100 now, “we plan to be 140 people by the end of the year.”
Subscriber numbers leapt by 1222% in the 12 months after March 2020 - the start of lockdown.
“We saw a lot of professors and academics start to use Perlego for the first time during Covid, and we noticed when one professor mentioned it, we’d suddenly onboard 350 people in one go.”
Students now pay £12 a month, or £96 per year, to access over 800,000 books. Perlego currently has some 400,000 users from around 6000 institutions in 172 countries; 40% are in the US.
Van Malderen admits an e-book isn’t always best: “the physical print textbook is still our biggest competitor, particularly the intangibles it offers students like the ability to make notes in the margin, highlight valuable paragraphs and record sections for a later date.”
His other big rival is online piracy - and says he can only counter that by trying to keep the subscription cost down, as well as offering extra features like online note-taking and extra articles, video and audio podcasts.
The entrepreneur can tell what the high-minded world is worried about via Perlego’s data: “at the start of the pandemic we saw searches for content on virology and pandemics spike. When there are international crises, big climate events and economic events regularly see people searching for more background information around that subject - which I find reassuring!”
Perlego has since raised $14 million from backers including the founders of online learning platform Kahoot, and investors Accelerated Digital Ventures. Another investment round is currently underway to spend on expansion in the US “where students are struggling with the rising costs of education, remote learning and course completion.”
“Education is hard to disrupt - we haven’t seen any really big successes in Europe yet,” Van Malderen concludes. “My dream is to build a platform which is huge - and which is known for making education more affordable.”
If he succeeds, his story might one day feature in a business course textbook -- hosted on his own site, of course.
Editor’s note: An earlier version of this article stated that Perlego received investment from online bank Cahoot. The company in fact received investment from online learning platform Kahoot.
