Virtual classroom startup LearnCoach - which has seen a huge spike in demand for its online learning tool during the pandemic - has raised $4.5 million in what founder and chief executive Dave Cameron calls a "pre-Series A" round that values the company at $13.5m.
The round was led by Auckland's Icehouse Ventures and the Christchurch-based Impact Enterprise Fund - a do-gooder investment outfit whose directors include Herald contributor Ben Kepes and Akina Foundation CEO and social-enterprise advocate Louise Aitken.
The raise comes on top of a $1.5m seed round last year, led by Icehouse.
Cameron, a one-time Otago Boys' High School teacher, created LearnCoach after a 15-minute video he shot to explain a maths problem went viral.
He was joined by his older brother Mark, who brought the tech smarts (he has an engineering degree) plus useful early-stage company experience from his time as a developer with Publons - the Wellington-based academic publishing startup sold to a Thomson-Reuters spinoff in a multi-million deal in 2017.
By early this year, LearnCoach was producing video tutorials for some 50 NCEA courses.
With the $4.5m raise, Cameron wants to increase that to around 500.
In part, that will involve drafting more teachers to create content, but it will also involve recruiting more software engineers to help get it to schools. Developer numbers will be doubled to 20.
The new staff will also help expand a new teaching management platform that helps teachers monitor where different students are at with online lessons, and administer online tests - complete with tools to flag possible cheating.
Cameron says around 2000 classrooms at 382 schools are now using the new online teaching platform.
When the Herald last checked in with LearnCoach in March - as the first lockdown hit - the startup had some 105,000 students on its books, with around 8000 paying $2 a week for unrestricted access to its service.
Today, it has 170,000 using its online courses, and by the time exams are over, Cameron expects the same percentage to be paid as March (implying around 13,000 paying).
Cameron says LearnCoach's video tutorials and online learning management platform filled a need during the lockdowns.
But he says many teachers, and students, continue to use the service because it's a time-efficient and effective learning supplement in an age of high teacher-to-student ratios.
Another big area is fee-paying foreign students - some of whom have been caught offshore. Some schools are using LearnCoach as a way of keeping for lucrative foreign students in the loop. Cameron sees potential for universities to use his service for the same purpose.
For now, Cameron is fully focused on expanding LearnCoach's NZ service, and its local customers' level of engagement.
The startup's next big move will be launching into Australia, likely at some point next year.
A "proper" Series A round will take place before the transtasman push, Cameron says - and it will dwarf the $4.5m effort revealed today.