Edugo: Evaluating the Business Model of an AI-Driven Language-Learning Startup

Giuseppe Tomasello founded Edugo with the goal of developing effective language-learning tools that use advanced AI technology. The case describes Edugo’s product iterations and shows how financial concepts such as net present value (NPV) and the cost of capital can be used to evaluate a firm’s strategic options. The main technological breakthrough for Edugo came with the ability to create customized content by using digitalized transcripts made during online or offline language classes. Having accumulated a large amount of data from these transcripts, Edugo provided AI-generated review materials and interactive exercises customized for the needs of individual learners. The main dilemma faced by the founder at the time of the case (in early 2020) was whether to market these inventions to the end-users or to language schools (i.e., whether to position Edugo as a B2C or a B2B2C business). It was a difficult choice, with good arguments in favor of both alternatives.