Founder Stories

Perlego founder Gauthier van Malderen on his ‘Spotify for textbooks’ & transforming education

Founder Stories

Perlego founder Gauthier van Malderen on his ‘Spotify for textbooks’ & transforming education

Words Gauthier Van Malderen

March 20th 2024 / 8 min read

Education holds one of the biggest opportunities for disruption. 

During and after COVID, we saw radical changes to how education was delivered, with schools and universities instantly needing to switch online by necessity, not necessarily by desire. Largely, education has become less centralised and less synchronous. Digital education was valued at $17.8 billion in 2022, and is predicted to reach $210 billion by 2032. 

And yet, huge barriers to education remain unchanged. Old-fashioned, in-classroom experiences are still the default. Educational experiences are still expensive, exclusive, and often the preserve of the few. How can education overcome its critical lack of representation and diversity until it solves these challenges? 

I’m not here to preach to the benefits of widening access to education. Rather, as a founder with a keen interest in technology’s transformative potential, I want to uncover new ways and tools for delivering top quality education to anyone, anywhere. 

This is why I built Perlego, the world’s first digital subscription service for textbooks. We’re addressing one of the more prohibitive costs of attending university—the exorbitant cost of academic textbooks. Since 1982, the cost of academic textbooks has increased by 1022%, three times the rate of inflation. I see this as a big step towards a bigger vision of making education more affordable and accessible to everyone.

Here’s the story of Perlego, and how we’re using technology to transform the learning experience for everyone.

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Solving problems for students

I had a track record of launching student-focused businesses. Whether this was selling hoodies, travel tips for students, or free notebooks with banner advertising, I was fascinated by the opportunity to tap into the student market and solve unique problems for them. 

It didn’t take me long to see the problem facing practically every student regarding the cost of academic textbooks. Speaking to my fellow classmates in the lecture hall, it was astonishing to me just how accepted it had become—simply because there was no alternative. 

Through some simple desk research, it quickly became clear that this wasn’t just a problem for students. Publishers were suffering too, losing $3.5 billion to the secondary resale market, and around $1.2 billion to piracy. On the latter, extraordinary traffic was going towards well-known book piracy sites—around 135 million unique visitors a month. 

I considered whether there were cues from other industries that I could take inspiration from. Look at the film and music industries—how did they address huge piracy problems? In short, they had to adapt, seeing the rise of platforms like Spotify and Netflix. Not only have these widened access to vast volumes of music and film, they’ve made them considerably cheaper.

I wanted to build a platform that could do for academic textbooks what Netflix had done for films and Spotify for music. And thus, Perlego was born. 

Building out the Spotify for textbooks

Many startups—particularly libraries, marketplaces, and so on—will face the cold start problem. Essentially, how do you start building up supply without demand, and vice versa? 

Perlego was a real chicken and egg situation. If we managed to get all the content, we’d own the world, but how were we going to go about getting that initial batch of publishers without any users?

I had no real background in publishing but it didn’t take me long to realise where I needed to start. At the London Book Fair, a meeting place for the publishing industry, I met a number of smaller publishers who had a great deal to benefit from working with a tech platform—they had basically zero data from the content they were producing—and realised I could build up quite a compelling offer for them. 

So I went after the long tail in quite a manual way—essentially a lot of cold emailing. I set myself a target of closing 100 publishers, and once I’d done this, I could then have a compelling offer to bring to the demand side (AKA students and universities). 

It was the route that actually led us to Founders Factory. Having spoken to Stefan von Holtzbrinck, owner of a large German publishing group, he pointed us towards Founders Factory, alongside whom he was investing in edtech businesses. It made a huge amount of sense to us to use this relationship to crack into and build relations with the publishing industry. 

Now it was time to build the demand side, which proved to be a little trickier. It was during our time at Founders Factory that we started to invest in SEO, which proved to be fruitful for us. For every single book or page on Perlego, we create a unique URL that is indexed by Google. It started slowly, and really took time to compound, but now generates a huge amount of traffic to our site (5.5m unique visits a month) and now accounts for 95% of our DTC business.

These early decisions started to have a real knock-on effect in terms of the traction and reception we were getting. 

Fundraising, while not strictly ‘success’, was an early sign of validation for the business. A huge breakthrough was securing angel funding from Simon Franks, serial investor and co-founder of LOVEFiLM. Getting his financial support and backing for our vision really became an anchor for us to raise further capital—just over $65m to date. 

Crossing the £10m ARR threshold also felt like a big milestone for me. Given that 92% of companies don’t get past this, it felt like we’d done a lot of the heavy lifting. 

Putting the team together that we have today has also been a hugely rewarding experience. People are the most important thing in a startup. We were just 8 people when we joined Founders Factory in 2018—we’re now just over 120. In fact, one of the most important hires I’ve ever made, our COO Ashleigh, came directly from FF. 

Perlego today feels firmly on the path to success. The platform has over 1 million ebooks in its library. We have more 500,000 subscribers in 189 countries, we work with 340 university clients and over 9000 publishers. And now we have profitability firmly in our sights. The way I see it, from the moment you’re profitable, you’re fully in charge of your own destiny.

Perlego: A timeline

  • January 2016: Gauthier van Malderen and Matt Davis start building Perlego, the world’s first digital subscription service for textbooks

  • August 2016: First seed funding raised ($800k) including investment from angel Simon Franks

  • January 2017: Perlego platform goes live

  • September 2018: Perlego joins Founders Factory Accelerator, who join $5m seed extension

  • June 2019: Perlego named Best Edtech at TechCrunch’s Europas Awards

  • November 2019: Perlego closes $9m Series A

  • April 2020: Amid COVID-19’s shift to online learning, Perlego sees a 1500% increase in subscribers

  • March 2022: Perlego closes $50m Series B, led by Mediahuis Ventures, with participation from Raine Ventures, and Evli Growth Partners

How technology can transform the world of education

As we’ve grown Perlego, I continue to see new frontiers where we can transform not only who can access top educational material, but also around enhancing the educational experience they are receiving. After all, why should you need to go to Harvard in order to study from Harvard professors? 

Firstly, Perlego is moving towards a marketplace vision, to become a place to have all of your learning content in one beautiful place. This means that we’re not just books but also audiobooks, lecture slides, podcasts and lecture recordings, and so on. On top of this, bringing more collaboration into your learning materials will enhance the way people engage with education.

Of course, AI has transformational potential here. Not only can this streamline the day-to-day operations for educators (grading, syncing, etc), it can make education really exciting through things like personalisation and gamification. We have three new things that we’re launching in the very near future in this sphere. 

  1. Study tools—the ability to add new learning tools on top of the content layer, such as flashcards, quizzes, and tests within the content itself. 

  2. Tutorbot—enabling learners to ask questions directly in books. One of the most used plugins for ChatGPT is uploading PDFs and talking directly to that content. Through Perlego you can now do this automatically with over 1 million books. 

  3. Semantic search—whereas previously you’ve had to search by chapter or page, this allows you to search across all our content and take your directly into themes. We’ve done this by creating a vector model, indexing every single word, allowing search to take you directly to the passage itself. This is transformational for essay writing and referencing

I believe impact should sit at the core of any technology business. I don’t believe that you’ll succeed if you’re doing it just for financial outcomes. For Perlego, this all leads towards our mission of making education more affordable and accessible. 

About Gauthier 

Gauthier van Malderen is CEO & co-founder of Perlego. He founded and exited two businesses prior to Perlego—Iconic Matter and Teenage Tourist. 

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