Sydney-based education platform gets $10m PE injection

Robert BoltonEducation editor

Jan 31, 2021 – 5.01pm

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A company paid by universities to improve student performance is getting a $10 million private-equity injection after demand for its services during the pandemic soared 70 per cent in Europe and 40 per cent in Australia.

Sydney-based Studiosity runs a platform with tutors who give students feedback on writing, referencing and citations, and runs their work through plagiarism software.

Michael Larsen: “COVID has compressed the time in which universities adopt innovation and learning technologies.”

Chief executive Michael Larsen said 2020 had been a difficult year for universities globally, with enrolments and income smashed by the pandemic. This put them under unusually high pressure to maintain student wellbeing and success.

More than 80 per cent of Studiosity’s business is with higher education providers and it has 1.3 million students on its books in eight countries.

“We’re not a replacement for students getting support on campus. But COVID has accelerated our business. It has compressed the time in which universities adopt innovation and learning technologies,” Mr Larsen said.

“COVID has validated the transition to online learning which is happening everywhere.”

The company is only small – Mr Larsen expected it to achieve $20 million revenue this financial year – but it has attracted interest from Online Education Services, part of the Seek Group, and CVC Emerging Companies Fund.

Mr Larsen said the equity stake would improve the company’s ability to raise capital for future mergers and acquisitions and a possible IPO.

His uncle, Peter Larsen, was one of the founders, along with Rod Jones of education company Navitas, which was privatised by venture capitalist Ben Gray in a $2.3 billion deal in 2019.

Mr Larsen’s cousin Andrew runs Larsen Ventures, an education investor that took a stake in Edstart, a fintech that manages school-fee payments for parents.

Education lead at PwC David Sacks said demand for higher education was counter-cyclical to the economy.

There had been big growth in enrolments during the global financial crisis as students tried to differentiate themselves in employment markets by adding qualifications, he said.

Typical undergraduate degrees took three years to complete, which kept students away from unemployment queues until demand picked up again.

This was repeating during COVID-19 but with the added factor it was driving people online to work and there was a flow-on to universities which were more willing to teach on line.

Robert Bolton is the Education editor. He covers primary and secondary education, universities and training. Connect with Robert on Twitter. Email Robert at rbolton@afr.com