Virtual reality edtech startup Academy Xi bags $3 million, chooses Asia expansion over the US
Wednesday, December 5, 2018/
Virtual reality edtech startup Academy Xi has raised $3 million in Series B funding, as it gears up to enter the Asia-Pacific market.
Launched in 2016 by co-founders Ben Wong and Charbel Zeaiter, Academy Xi provides courses for companies and individuals looking to upskill in virtual and augmented reality.
The startup raised $2.25 million in Series A funding in June last year. Since then, Wong tells StartupSmart, it’s seen revenues grow at a “pretty favourable rate” of more than 250% year-on-year.
Now Academy Xi has about 3,400 students across full-time, part-time and corporate training, while some 30,000 people have accessed free and low-cost programs through the platform.
The Series B round was led by Pangaea Impact Investments, Alium Capital and Giant Leap Funding, and included several Singaporean investors.
Anthony Böhm, serial entrepreneur and founding partner of Pangaea Impact Investments, has also joined the startup as chair of the board.
“We’ve reached a point where we’ve built credibility, amazing clients, and a strong community,” Wong says.
“We thought it would be great to focus on how we can expand,” he adds.
The funding is pegged for investment in marketing and growth, developing more online programs, and building relationships with more corporate partners, in a bid to help companies elevate the skill of their workforce on scale.
However, it will also fuel Academy Xi’s expansion overseas, starting with Singapore.
“We look at Singapore as a hub of APAC,” Wong says.
Expanding throughout the rest of the region is part of the startup’s growth strategy, he says. There’s a growing demand for digital skills in the market, he says, and in the near future there will be more and more companies looking to upskill their staff in these areas.
“As more of these companies need more skill sets and better talent, we’re looking to support them and be part of that journey,” he adds.
Although a lot of Aussie startups choose to expand first into the US market, the decision to focus on Asia first was also a very considered one. The training Academy Xi offers is already in demand.
“It’s an opportunity to support a market that doesn’t have much support in training,” he adds.
Wong is taking a forward-thinking approach to expansion, taking the service to a region that is less saturated, and where he anticipates a need will emerge.
“Rather than addressing an immediate need, we’re setting up to work with organisations that are going to need a solution very soon,” he says.
Quality not quantity
When it comes to raising funds, Wong says the key thing he learnt from the Series A round — and took into the Series B — is to focus on finding “strategic investment partners that align with your vision”.
It’s important for investors to understand the kind of business you are, he adds.
“If you’re going to thrive, you need investors and people who are going to support that, and who are going to want to drive that to happen,” he says.
It’s about more than just raising money, he adds, “you want to make sure you stay true to your vision
In this round, Wong and Zeaiter focused on trying to get the right people on board, rather than spending their time trying to meet a lot of people in the first round, many of whom turned out not to be the right investors.
“Our vision is to create a commercial, sustainable, profitable business that makes positive social impact,” Wong says.
And so the founders looked for impact investors and those with a commercial nous for education.
Anthony Böhm, for example, has seen two major exits from education businesses, with a combined value of $300 million.
“Focus on the right people,” Wong advises.
While the Series B round took a little longer than the founders had initially hoped, “we spent less time trying to meet people and more time trying to get them across the line,” Wong says.
“In the end it was very much worth it,” he adds.