Aussie edtech startup FourthRev has raised $4.16 million in a hefty seed funding round, after COVID-19 and the learning-from-home revolution led to a bumper 2020.
But, even as Australians get back to in-person education, there’s no turning back the tide on edtech, FourthRev co-founder Omar de Silva says. And he’s gearing up to go international.
FourthRev was founded in May 2019 by de Silva and co-founder Jack Hylands.
In the two years since, the pair has forged partnerships with global tech companies including AWS, GitHub and Salesforce, as well as with top universities in Australia, the UK and the US.
The business brings together higher education institutions, tech companies and employer partners to offer online learning with direct partway to qualifications and careers, with a specific focus on the digital economy.
It targets so-called ‘lifelong learners’ as well as graduates, in a bid to boost employment prospects, while addressing a global digital skills shortage.
According to research from Manpower Group, 45% of employers are struggling to find people with the right skills to fill open roles. Among businesses with more than 250 employees, that figure increases to 67%.
This round was led by Reach Capital, a US VC specialising in education businesses. Existing investor Emerge Education also contributed, along with Dunce Capital.
FourthRev also secured backing from high-profile angel investors Craig Pines — an experienced education executive — and former Microsoft head of corporate strategy Charlie Songhurst.
It’s a significant chunk of capital for a seed round, and follows an $800,000 pre-seed investment just 12 months ago.
But, it’s been a wild 12 months, de Silva tells SmartCompany.
From a revenue perspective, the business has seen 75% growth, quarter-on-quarter.
But, from a contracted sales perspective in 2020, “we had growth of well over 1000%”, de Silva says.
That growth came in the form of multi-year arrangements with university partners, meaning the business isn’t realising the revenues just yet.
The team has also grown from three people 12 months ago to 35.
By the end of 2021, de Silva anticipates the number of students using the platform to increase by some 300%.
Right time, right place
The funding will help support FourthRev’s expansion into the US, a move Reach Capital general partner Shauntel Garvey called “timely”.
Garvey also expects learning solutions that are integrated with the workplace will continue to gain traction, “as learners seek experiences that combine academic learning with in-demand skills”.
In fact, FourthRev’s strong growth in 2020, and the interest from Reach Capital, meant the seed funding round was closed earlier than expected.
Partly, that’s a realisation of relationships the co-founders have been building over some time, de Silva suggests — they closed the round without having taken the trips scheduled for investor meetings.
It also shows the maturity of the US market in this space, particularly when it comes to career-focused education, he says.
That also speaks to the strength of the FourthRev product.
“When we’ve been able to articulate something which is genuinely different, genuinely new and uniquely valuable, that market has been able to recognise the need and the right timing.”
Now, even as (in Australia at least) students are starting to return to the classroom, de Silva doesn’t see the edtech revolution slowing down.
While FourthRev’s growth in 2020 clearly came from a need for people to shift to online learning, the founder believes there’s something deeper going on here too.
The product is addressing a skills gap that the pandemic has only amplified, he explains.
“It doesn’t mean online-first skills or learning experiences are any less usable or less relevant when students come back to campus environments.”
Some partners are already offering blended models, he notes.
“The industry has certainly had to adapt incredibly quickly — there will be some things that will never go back to how they were, but a number of things will go back.”
That will create challenges and opportunities for the startup, and the co-founders are already working on new products to offer a combined digital and on-campus experience.
But, ultimately he feels that as long as the business continues to address the real challenges facing employers and prospective hires alike, “there will always be a place for our business”.