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Feb 19, 2022 · 20m · top-founders

Edtech SaaS Breaks $4m, Looking at $10m Series B Next

Shaunak Roy · 10m spoken Nathan Latka · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview, Nathan Latka speaks with Shanak Roy, founder and CEO of Yellowdig, about the active learning platform's product pivot, hybrid monetization model, and rapid revenue expansion. Roy outlines how the company scaled to a $4 million revenue run rate across 200,000 students while preparing for a $10 million to $20 million Series B financing round.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 37.7% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 4.0 Guest disagreement 2.0 Nathan pushing back 4.5
05100:0010:0020:000:43–6:48 · Nathan as informed peer 6/10 Introducing Yellowdig and Dual Revenue Channels Latka immediately breaks down the dual B2B and B2C sales motions and uses mental math to deduce average seat counts per institution. Roy is cooperative and explains how the bookstore channel operates alongside direct university contracts.6:48–9:38 · Nathan as informed peer 5/10 Company Pivot and Capital Requirements in EdTech Latka questions why the business required venture capital rather than bootstrapping through its pivot. Roy educates Latka on EdTech compliance standards like FERPA and ADA as well as the necessity of clinical efficacy studies.9:41–16:29 · Nathan as informed peer 7/10 Founderpath Valuation Tool Promotion Roy corrects Latka's revenue model assumption, explaining that pricing is per semester course rather than monthly SaaS. Latka strongly challenges Roy's thesis on product importance by asserting distribution matters far more in regulated enterprise sectors.16:29–18:33 · Nathan as informed peer 6/10 Team Organization, Sales Targets, and ARR Growth Latka drills down into sales headcount, quota-setting mechanics, and historical growth rates. He pins Roy down to confirm approximately 100% year-over-year ARR growth moving toward $4M.0:43–6:48 · Guest teaching 3/10 Introducing Yellowdig and Dual Revenue Channels Latka immediately breaks down the dual B2B and B2C sales motions and uses mental math to deduce average seat counts per institution. Roy is cooperative and explains how the bookstore channel operates alongside direct university contracts.6:48–9:38 · Guest teaching 5/10 Company Pivot and Capital Requirements in EdTech Latka questions why the business required venture capital rather than bootstrapping through its pivot. Roy educates Latka on EdTech compliance standards like FERPA and ADA as well as the necessity of clinical efficacy studies.9:41–16:29 · Guest teaching 6/10 Founderpath Valuation Tool Promotion Roy corrects Latka's revenue model assumption, explaining that pricing is per semester course rather than monthly SaaS. Latka strongly challenges Roy's thesis on product importance by asserting distribution matters far more in regulated enterprise sectors.16:29–18:33 · Guest teaching 2/10 Team Organization, Sales Targets, and ARR Growth Latka drills down into sales headcount, quota-setting mechanics, and historical growth rates. He pins Roy down to confirm approximately 100% year-over-year ARR growth moving toward $4M.0:43–6:48 · Guest disagreement 1/10 Introducing Yellowdig and Dual Revenue Channels Latka immediately breaks down the dual B2B and B2C sales motions and uses mental math to deduce average seat counts per institution. Roy is cooperative and explains how the bookstore channel operates alongside direct university contracts.6:48–9:38 · Guest disagreement 1/10 Company Pivot and Capital Requirements in EdTech Latka questions why the business required venture capital rather than bootstrapping through its pivot. Roy educates Latka on EdTech compliance standards like FERPA and ADA as well as the necessity of clinical efficacy studies.9:41–16:29 · Guest disagreement 4/10 Founderpath Valuation Tool Promotion Roy corrects Latka's revenue model assumption, explaining that pricing is per semester course rather than monthly SaaS. Latka strongly challenges Roy's thesis on product importance by asserting distribution matters far more in regulated enterprise sectors.16:29–18:33 · Guest disagreement 2/10 Team Organization, Sales Targets, and ARR Growth Latka drills down into sales headcount, quota-setting mechanics, and historical growth rates. He pins Roy down to confirm approximately 100% year-over-year ARR growth moving toward $4M.0:43–6:48 · Nathan pushing back 4/10 Introducing Yellowdig and Dual Revenue Channels Latka immediately breaks down the dual B2B and B2C sales motions and uses mental math to deduce average seat counts per institution. Roy is cooperative and explains how the bookstore channel operates alongside direct university contracts.6:48–9:38 · Nathan pushing back 3/10 Company Pivot and Capital Requirements in EdTech Latka questions why the business required venture capital rather than bootstrapping through its pivot. Roy educates Latka on EdTech compliance standards like FERPA and ADA as well as the necessity of clinical efficacy studies.9:41–16:29 · Nathan pushing back 7/10 Founderpath Valuation Tool Promotion Roy corrects Latka's revenue model assumption, explaining that pricing is per semester course rather than monthly SaaS. Latka strongly challenges Roy's thesis on product importance by asserting distribution matters far more in regulated enterprise sectors.16:29–18:33 · Nathan pushing back 4/10 Team Organization, Sales Targets, and ARR Growth Latka drills down into sales headcount, quota-setting mechanics, and historical growth rates. He pins Roy down to confirm approximately 100% year-over-year ARR growth moving toward $4M.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 45.7% · guest 54.3%0:00 · Nathan 45.7% · guest 54.3%3:00 · Nathan 30.9% · guest 69.1%3:00 · Nathan 30.9% · guest 69.1%6:00 · Nathan 21.8% · guest 78.2%6:00 · Nathan 21.8% · guest 78.2%9:00 · Nathan 47.2% · guest 52.8%9:00 · Nathan 47.2% · guest 52.8%12:00 · Nathan 33% · guest 67%12:00 · Nathan 33% · guest 67%15:00 · Nathan 27.8% · guest 72.2%15:00 · Nathan 27.8% · guest 72.2%18:00 · Nathan 71.8% · guest 28.2%18:00 · Nathan 71.8% · guest 28.2%
Sharpest disagreement ▶ 12:36 Roy refuses to share current revenue figures

Roy outright deflects Latka's question regarding projected revenue, withholding the numbers despite repeated inquiries.

 Hardest push from Nathan ▶ 15:19 Latka refutes product primacy over distribution

Latka directly interrupts and disagrees with Roy's claim that product quality comes first in EdTech and healthcare, asserting distribution is far more decisive.

 Biggest teaching moment ▶ 11:08 Roy corrects monthly recurring pricing misconception

Roy explains that the $12.95 fee covers an entire 3-4 month course rather than a monthly subscription, dismantling Latka's $2.4M monthly revenue calculation.

 Nathan holds their own ▶ 15:19 Latka demonstrates SaaS distribution expertise

Latka counters Roy's premise by demonstrating domain knowledge of institutional procurement cycles where inferior products routinely win with superior sales distribution.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Yellowdig and Dual Revenue Channels 6314 Latka immediately breaks down the dual B2B and B2C sales motions and uses mental math to deduce average seat counts per institution. Roy is cooperative and explains how the bookstore channel operates alongside direct university contracts.
Company Pivot and Capital Requirements in EdTech 5513 Latka questions why the business required venture capital rather than bootstrapping through its pivot. Roy educates Latka on EdTech compliance standards like FERPA and ADA as well as the necessity of clinical efficacy studies.
Founderpath Valuation Tool Promotion 7647 Roy corrects Latka's revenue model assumption, explaining that pricing is per semester course rather than monthly SaaS. Latka strongly challenges Roy's thesis on product importance by asserting distribution matters far more in regulated enterprise sectors.
Team Organization, Sales Targets, and ARR Growth 6224 Latka drills down into sales headcount, quota-setting mechanics, and historical growth rates. He pins Roy down to confirm approximately 100% year-over-year ARR growth moving toward $4M.

Statements from this episode (14)

Assertion Supported
Yellowdig partners with Barnes & Noble for nationwide university distribution
“We are a bonds and rebels partner. So we are pretty much in all over the country.”
Shaunak Roy Feb 19, 2022 ▶ 1:54
Disclosure
Direct-to-consumer sales represent roughly 20% of Yellowdig's total revenue
“Direct to consumer is a new business model for us. We launched it in the beginning of 2020. So that's a segment which is growing for us right now. We expect that to grow rapidly in this year. But right now I would say it's about 20% of our revenue.”
Shaunak Roy Feb 19, 2022 ▶ 2:19
Assertion Supported
Yellowdig prices its software at $12.95 per student per course
“So for one student to take, use Yellowdig in one course is 12 dollars and 95 cents.”
Shaunak Roy Feb 19, 2022 ▶ 3:04
Assertion Not checkable as stated
Yellowdig has expanded to over 130 university customers
“We have over a 130 universities now.”
Shaunak Roy Feb 19, 2022 ▶ 3:56
Assertion Not checkable as stated
Yellowdig had around 200,000 students on its platform last year
“So right last year we had about 200,000 students who used our platform in a variety of ways.”
Shaunak Roy Feb 19, 2022 ▶ 4:35
Assertion Not checkable as stated
Yellowdig's largest customer generates over $300,000 in annual revenue
“Our largest customer, I think, you know, over 300,000 dollars per year.”
Shaunak Roy Feb 19, 2022 ▶ 6:35
Disclosure
Roy: Yellowdig has raised about $6 million to date
“We have raised about six million till that.”
Shaunak Roy Feb 19, 2022 ▶ 7:28
Insight
Edtech startups face massive upfront compliance investments before selling early licenses
“Even if you want to sell like five pieces of license for school, you have to be compliant in all of them. Otherwise you can't sell. So there are significant investments that are needed to be able to comply with those regulations in terms of product processes a…”
Shaunak Roy Feb 19, 2022 ▶ 8:42
Disclosure
Roy: Yellowdig conducted over 12 studies to validate product efficacy
“So we have done over 12 studies with our variety of partners and third parties to prove the value of the product before we could scale the technology.”
Shaunak Roy Feb 19, 2022 ▶ 9:21
Assertion Not checkable as stated
Roy: Yellowdig reached $1 million in revenue in 2020
“So we launched the product in 2019. We, I think we'd have hit a million revenue in 2020.”
Shaunak Roy Feb 19, 2022 ▶ 12:25
Insight
Universities require one to two years of trial data for enterprise licenses
“Typically what we find is that when school starts with our, you know, using our technology, let's say in a few courses, it takes them about one to two years to be able to get enough data. To buy an enterprise license.”
Shaunak Roy Feb 19, 2022 ▶ 13:29
Disclosure
Roy: Yellowdig aims to raise $10M to $20M in Series B
“I think maybe in the, you know, 10 plus 1,000,010 to 20 in that range.”
Shaunak Roy Feb 19, 2022 ▶ 14:40
Insight
Latka: Distribution matters far more than product quality in edtech and healthcare
“I would say distribution is way more important. There's a lot of subpar products that have better distribution that are winning.”
Nathan Latka Feb 19, 2022 ▶ 15:23
Assertion Not checkable as stated
Roy: Yellowdig has grown close to 100% annually since 2020
“If we look at, yeah, it was close to a hundred percent. I won't know. I don't know whether it's a hundred percent exactly what he had close to that number.”
Shaunak Roy Feb 19, 2022 ▶ 18:14
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