The team behind cloud-based platform OpenLearning plans to raise up to $8 million through an initial public offering this month to expand the company’s presence in Australasia and grow the portfolio of short courses it delivers to education providers.
Approximately $6 million will be raised through the issue of 30 million shares at $0.20 each, with oversubscriptions of up to an additional $2 million achieved through the issue of another 10 million shares at the same price.
Proceeds of the offer will be used on the recruitment of new sales and marketing people in Australia and overseas, and as working capital to enable senior management to focus on growing the underlying business while advancing the platform.
OpenLearning’s technology enables end-to-end education delivery, from student acquisition and payment, through to assessment and certification, within a global cloud platform powered by Microsoft Azure.
It has been considered a “turnkey solution” for higher education providers to move their core business online.
The company expects to list this Friday on the ASX under stock ticker OLL.
OpenLearning’s platform allows education providers to design and deliver accredited, non-accredited, online or blended programs such as massive open online courses, private or paid courses, undergraduate and post-graduate degrees, continued professional development and vocational education and training.
Established in 2012, the platform was initially provided for free to institutions and the general public, with revenue generated through professional learning design services to education providers.
In 2017, OpenLearning began monetising its technology through a software-as-a-service (SaaS) business model, charging blue-chip university and government clients an annual licence, support and hosting fee to use the platform.
The group’s growth accelerated in March when it introduced a paywall to the platform, ending the free service it had provided since inception.
The company notified the 1,660 educators who had created courses and over 200 education providers that they would need to subscribe to a SaaS plan in order to continue using the platform.
By September, the group had 422 subscribers to its personal plan for educators and 55 subscribers to its plans for providers.
In July, OpenLearning restructured its operations across Australasia to focus on growing SaaS revenue by expanding its sales and marketing teams, reducing the headcount of its learning design team and increasing the size of its customer success and onboarding teams.
Although not yet profitable, the company believes the SaaS model will eventually drive revenue and earnings growth.
OpenLearning has initially focused its efforts on the primary markets of Australia and Malaysia with localised customer support, pricing and learning services.
The technology has also attracted interest from providers in other markets including Singapore, Indonesia, the United States, United Kingdom and Canada.
At present, 6.14% of OpenLearning’s revenue is derived from these secondary markets.