Following a provisional equity stake deal in May, Schrole Group (ASX: SCL) has announced the finalisation of its three-year agreement with Faria Education Group to undertake technical integration and joint promotion of its software as a service human resources products to Faria’s extensive global school network.
In May this year, Schrole told the market that Faria intended to invest $2.9 million in the company via a convertible note, thereby chiselling out a 20% strategic stake.
The deal remains subject to shareholder approval at an upcoming EGM on 2 July 2020.
As part of the agreement, Schrole also announced intentions to raise $2.12 million through a placement with the combined funds provisioned for supporting and accelerating planned technical and product development initiatives, cross-selling initiatives and working capital.
The three-year agreement with Faria will involve integrating and cross-selling Schrole’s unique product portfolio into Faria’s extensive school networks comprising over 3,000 international schools across 130 countries.
Partnering up for education
Faria and Schrole have developed the partnership to encompass product integration and assistance with sales and marketing, which are expected to boost annual recurring revenues.
More specifically, Schrole said it plans to initially focus on cross-selling two of its leading products – Advantage and Verify – to Faria’s 3,000 international school customers.
As part of the collaboration, Faria is tasked with supporting the roll-out with its team comprising of 36 full-time sales and account management personnel.
Faria employees are expected to bolster Schrole’s current sales team and will assist Schrole to secure “specific development talent” including back-end and full-stack web developers.
“This partnership will enable Schrole to expand the sale of our software as a service to international schools,” Schrole managing director Rob Graham said.
“We are very encouraged by Faria’s commitment to the partnership, in particular their plans to promote our products to their extensive customer base,” he added.
Initial technical integrations have been completed incorporating a “single-sign-on” to allow users to move seamlessly from Faria into Schrole’s ISS-Schrole Advantage and Verify services.
The partnership is expected to accelerate Schrole’s growth and represents a major milestone in the company’s history.
Schrole stated the first stage of technical integrations had been completed with both companies now turning to marketing the combined product offering to schools and teachers by the end of October 2020.
According to the terms of the deal, there will be no planned revenue share arrangement for schools entering into licence agreements for Schrole’s software, for the first 12 months of the partnership.
However, from 1 July 2021, the education technology company has agreed to pay a percentage of revenue derived from qualifying purchases to Faria.
Today’s news pushed Schrole’s shares up by 20% up to $0.018.