Billion-dollar growth: Jamie Beaton's Crimson claims unicorn status

Jamie Beaton is no longer the youngest guy in the room. Talking from a night-time Uber ferrying him from a day studying Law at Yale back to the business district of New York City, he acknowledges the cruel passage of time.

"I'm 27 now," he reminisces, "so not the young buck I once was."

Beaton emerged in 2016 as an almost fully-formed tycoon aged just 20. He leveraged his own educational accomplishments - acceptance into 25 of the world's top universities aged 17, electing to study at Harvard - into a job with the late and legendary investor Julian Robertson, and then bent the ears and wallets of his billionaire employers into backing a startup business based out of a dorm room in Boston.

With fellow teenagers Fangzhou Jiang and then-girlfriend Sharndre Kushor, Beaton founded Crimson in 2013, but had to delay formalising paperwork by six months as the Companies Act barred him from the boardroom until he turned 18.

Originally named Crimson Consulting, later morphing into Crimson Education with a pre-pandemic tilt into online secondary education, the business has since proceeded to raise and deploy more than $100m in capital, buying up extra-school tutoring services domestically and then internationally as the scale of his ambitions became apparent.

Scepticism about the company, largely over its unashamed focus on elite education and the closed-book nature of private company accounts, has persisted but in the eight years since its founding, Crimson is fast becoming too big to dismiss or ignore.

A recent $19m capital raise led by New Zealand venture capital fund Icehouse - which tipped in $10m - values the company at US$550m. Combined with the recently strengthened greenback, Crimson's valuation may just have nudged a billion in New Zealand dollars and seen it crowned New Zealand's next "unicorn" - as billion-dollar growth companies are often called.

This sort of valuation would make Beaton - who has happily seen his shareholding shrink to 26.5 per cent as the capital raises stacked up - worth $265m. The only tangible sign of his growing fortune is the recent purchase of two Auckland houses (mortgage-free, in his mid-20s) for a combined $3.8m - largely to give himself a base near family during the pandemic.

Icehouse was one of the first outside investors in Crimson, tipping in $100,000 after a 2014 pitch from the braces-wearing Beaton. Earlier in the year he had interned at the Icehouse, and now-CEO Robbie Paul says what he remembers from that time is that while he thought the young man was "exceptionally smart", he was shocked at his initial inexperience with spreadsheet software - and financial industry staple - Excel.

"Which sort of blew my mind. And I put him on a project basically sort of capturing and normalising the data of our entire portfolio, which was smaller at the time, but like, probably 50 to 60 companies. And next thing, you know, he's, like, he's basically recoded Excel, doing things that I wasn't capable of that he taught himself very quickly."

Icehouse has kept tipping in money during each capital raise, and its stake in Crimson is now worth $60m. Paul initially backed the jockey over the horse - he characterised the almost one-man-band Crimson as "just a consulting business" - but says Icehouse's backing has now morphed into "very, very high conviction based on not isolated datasets, but consistent patterns of performance" based on the length of the relationship and insider details of results over the past eight years.

The Herald understands Crimson's annual revenue topped $100m for the first time when it reached $110m for the year to July after having grown at around 65 per cent during each of the two previous years. It is likely on the precipice, given the substantial foreign ownership, of having to file audited annual accounts to the Companies Office and is said to employ 600 people full-time around the globe.

Jamie Beaton in 2016, then 20-years-old, celebrating his first multi-million dollar capital raise. Photo / Fiona Goodall

Beaton wasn't willing to talk dollars, citing business confidentiality, but was open to laying out how Crimson operations were weighted and spread across the globe. He says his high school - Crimson Global Academy - that started operations just over two years ago, now accounts for 20 per cent of group revenue.

College counselling - the massaging of high-school students with tutoring and extracurricular activities to mould them into better candidates for elite universities - is still the largest contributor to group income, and is now well-established as an export earner.

"These days more than 95 per cent of our college counselling revenue is outside of New Zealand," Beaton says, pointing to China, Korea, Singapore and the United States as key markets.

"But no one market is more than 10 per cent of revenue, and I've been very intentional about pushing globally."

The evolution of this business from being a luxury accessory for Auckland private secondary school parents into a genuinely mid-sized global education services provider was seen from the inside by Paul, who was as surprised as anyone by its trajectory.

"It went from just a capable guy with unique perspective on education, certainly with his credentials, to a roll-up strategy. And he seemed pretty good at that," he says.

"And then the next round happens. And it's like 'Wait a second, you're a technology company? How many developers have you hired?' and basically becoming in many ways the tech intermediary, like the Uber for education."

He says the next expansion of horizons came with Beaton's 2019 announcement that he planned to move into secondary schooling with an online offering. "People were like, 'You can't build a school, that's like, 400 pages of applications.' And he went 'Yeah, I know, I did it, I'm done'."

Paul says the potential to provide education to customers from ages five to 21 vastly grows the size of the potential market. "You can build long-term high-value, high-impact relationships that are very sticky with aspirational learners. For 16 years. I tried to find a software with 16 years' subscriptions, and it's just very difficult to come across."

Beaton, for his part, has walked his own talk and while building Crimson has juggled a beyond-full-time courseload. He is mid-way through his seventh degree - including a PhD from Oxford on a Rhodes scholarship - a Juris Doctor from Yale Law School.

The interest in law comes partly from a string of legal disputes that made it to New Zealand courts between Crimson and dissatisfied partners and takeover targets, and even Auckland University over copyright breach claims. Most of the disputes were settled before reaching trial.

"Over the years, I developed some curiosity in law. So I thought I would master the art myself, or at least not master, but get some exposure," Beaton says of his law studies.

"We did have some litigation, primarily from New Zealand, during many of our early years of operation, and we've learned a lot from those experiences."

His finely-tuned motor-mouth finally finds a lower gear when asked to reflect on his long relationship with the recently-departed Julian Robertson, who even after his death is recorded as the second-largest shareholder in Crimson. Aside from his mother - who raised him as sole carer - Beaton rates the hedge fund manager as the most formative figure in his life.

Jamie Beaton and his mother Paula at his MBA graduation from Stanford University in 2019. Photo / Supplied

"I had no perspective on what the wide world entailed; I didn't know what Wall Street was; I didn't know what entrepreneurship was. And he took me under his wing," Beaton says of the billionaire Tiger Management founder.

"I'll always be thankful for that incredible role he played in my life, it was truly transformational and is the kind of thing I'll be grateful for all the days I'm on this earth, basically."

Robertson's recent passing will pose no issues for Crimson, Beaton says, noting that his son Alex was also an early investor and remains a mentor.

With Crimson carrying no debt, having fuelled its growth so far solely from capital raises, Beaton is comfortable with his creation being called a unicorn.

"At this stage, I think we are."