How Does Preply Work – Business Model & Key Features

Last Updated: 12th January, 2024

Driven by globalization, the growing need for cross-border communication, increasing preference for a multilingual workforce by multinational companies, and the penetration of technology in education, the online language learning industry is growing tremendously. According to reports, this industry is expected to reach $38.7 billion by 2030, growing at a CAGR of 20.8%. Hence, creating a huge demand for online language-learning platforms, and market opportunities for entrepreneurs.

One such extremely popular online language-learning platform is Preply which is successfully connecting learners with language experts worldwide. This platform has seen tremendous growth in the last few years. In 2022, Preply closed a round of $50M from diverse reputed investors and expanded its business by bringing in companies like Unilever and more. Later, in 2023, Preply raised an extension round of $70M led by Horizon Capital, making it one of the most successful online language learning ventures.

Preply has become a big market player in the industry in the last few years and is an inspiration for many dreaming of entering this industry. Furthermore, let’s understand more about Preply starting with its success story.

Success Of Online Tutoring Platform Preply

In the dynamic landscape of education, online tutoring has become extremely popular causing an influx of several new startups in the industry. Among many trailblazers, Preply stands out as the beacon of excellence, revolutionizing the way tutors and learners connect in the learning process.

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 relaunched 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 saw Preply enter the UK, German, and Spanish markets and in 2018, it went on to raise another round of $4 million funding. Later, multiple investors like OWL Ventures, Diligent Capital, Hoxton Ventures, Horizon Capital, and many others invested in this venture. Investments received by Preply included $10 million in a series A funding round in 2020, followed by $35.2 million in the series B funding round in 2021, and $50 million in a series C funding round in 2022. Recently, in 2023 Preply received funding of $42 million in a series C funding round, making the total funding reach $144 million.

How Preply Works

This platform efficiently connects tutors and learners around the world. Preply works in the following way:

• 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.
• Tutors and learners create profiles on the platform by providing their details and preferences.
• Students can search for tutors using several criteria such as teacher language, price per lesson, tutor’s locations, 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.
• After the lesson’s completion, the tutor has to mark it complete and share its duration and summary.
• The 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.
• Tutors can easily 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 has gained remarkable success by connecting learners and tutors across the world. Preply employs a diverse monetization strategy to generate profits and sustain its operations. Furthermore, let’s understand Preply’s diverse revenue strategy:

Commissions: Preply’s main revenue source includes commission fees. When a learner books sessions with tutors through the platform, Preply charges a certain percentage of the fee from the 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 the tutor has completed on the platform. The rate depends on the total number of hours tutors have taught on the platform.

Subscriptions: To offer convenience and value to its users on the platform, Preply offers subscriptions to learners that contribute to its total revenue. Learners need to pay this subscription fee on a monthly basis.

Preply maximized its revenue potential by incorporating diverse revenue streams. Furthermore, let’s know what makes Preply the most popular online tutoring platform.

What Makes Preply The Most Popular Online Tutoring Platform

Preply offers an array of benefits to both tutors and students, which has contributed immensely to its appeal and popularity over the years. A key feature of Preply’s appeal is flexible time management. This allows tutors to set their own schedule using the Preply calendar. Moreover, teachers also get complete freedom of preference in formulating their lesson plans. Following are a few more ways in which Preply has garnered a large user-base and established itself as one of the leading online tutoring platforms:

• Self Intuitive & User-Friendly Interface: Preply 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. Additionally, Preply student discount enables university students with valid university email addresses to receive a 15% discount on their first month’s subscription with Preply.

Launching an Online Tutoring Platform Like Preply

The success of Preply as an online tutoring platform has attracted huge interest in this domain from all across the world. It’s safe to say, Preply won’t be the only platform of its type in the coming years. If you’re planning to launch your own online tutoring platform then this is the ideal moment.

Our cutting-edge software, Yo!Coach is designed specially to cater to such businesses. It is a white-labeled, ready-made online tutoring software to build a platform similar to Preply. This software can cater to the ever-evolving needs of learners and tutors with its industry-specific functionality and intuitive user interfaces. Yo!Coach offers a great range of interactive and collaborative tools to enhance the online learning and tutoring experience. Some of them are:

• Audio Chat
• Video Conferencing
• Virtual Whiteboard
• Download whiteboard as an image
• Flashcards
• Textpad
• Discussion Forum Module
• Multiple Screen Sharing
• Screen Recording
• Code Teaching Functionality
• Language Translation
• Group/One To One Learning

Additionally, Yo!Coach consists of several admin-oriented features to view, manage, and create new settings and options for simplified platform management.

• User Management
• Lesson Management
• CMS Management
• Marketing Module
• Commission Management
• Payment Method Management
• Currency Management
• Theme Management
• Homepage Management
• Session Pricing Management
• Featured Tutor Listing Functionality

Other benefits Offered by Yo!Coach:

• Self-Hosted Software
• Lifetime Ownership
• White-Label
• No Coding Required
• GDPR Compliant
• Source Code Ownership
• No Recurring Charges
• Scalable and Customizable
• 5+ years of Industry Experience
• 1000+ Projects Delivered
• Global Clientele
• 15+ Niches Catered

Feel free to explore Yo!Coach’s demo to get an in-depth understanding of the capabilities of the software and how it can benefit your business.