Interview with Ben Sze, Edrolo Co-CEO & Co-Founder
OneVentures provided venture credit to Edrolo in 2019. They have since scaled impressively and recently completed a $40m Series B round. We hear from Ben about why venture credit was right for Edrolo.
Congratulations on your recent $40m Series B round — what are you most excited to achieve with this raise?
We are excited to be expanding nationally.
Edrolo now offers core resources in Mathematics, Science and Humanities for schools across Years 7 to 10. Edrolo is already trusted by 1,100+ schools across Australia, and this additional capital is allowing us to free up our content creators and authors to spend 10,000+ hours ensuring the highest quality content is created, use ethically sourced paper for our textbooks, significantly upgrade our systems so we can deliver products directly to students, and so much more.
We know teachers are the most important factor within a child’s schooling. We want to get the very best resources into the hands of every teacher and student so they don’t have to find or piece together resources to do this. We believe this can save teachers time, so they can focus on the teaching, supporting every student to learn and achieve, and the many other things they do within a day.
What is your vision for the business over the next 5 years?
Edrolo was founded with the mission to improve education. We believe we can currently make the biggest difference, and impact, by focusing on improving the 6,000+ hours a student spends at secondary school. And, we believe empowering and equipping classroom teachers with the best resources possible will help us achieve this.
Stemming from the goal of wanting to create and publish the very best content — we have systematised and codified our product development approach — which we are constantly refining with every new resource, and integrating into previous resources we’ve created. We believe we are leading the charge in terms of using ‘content technology’ to author educational content.
For the past 10 years we’ve focused on resources for senior secondary education — VCE, HSC and QCE. Now we are rolling out nationally. So over the next 5 years, starting with Year 7, we’re creating a complete catalogue of core curriculum-aligned resources for Science, Mathematics, Humanities, and more, for Years 7 to 12 Australia-wide.
We first invested in Edrolo in 2019, at a time when venture credit was still relatively unknown in Australia. How did you find out about it, and why did you decide to raise venture credit as a funding option at that time?
Our Board alerted us to this alternate funding option when we were brainstorming ways to inject growth capital into the business. They knew this type of funding was readily available in the US and Europe, and there were some new funds that had just set-up in Australia. So, the timing was fortuitous.
As we learned more about venture credit, it became a no-brainer for us to lock-in this type of funding as our customer base, retention and upgrade rates and cash flow profile were attractive to venture credit lenders, and the lower amount of funding, resulting in a lower amount of dilution, suited us.
What were your key criteria for selecting a lender to work with?
We had to rethink our approach to choosing a lender, as your obligations to a creditor are very different from your obligations to a shareholder.
While the key terms of the deal were important (interest rate, fees, warrant size, required covenants, no director guarantees, etc.), we were also very keen on understanding each potential lender’s behaviour as a lender in both good and bad times.
How has it helped your growth and objectives over the past 3 years?
We’ve been able to scale up quickly, from a small team to almost 200. This growth enables us to invest in building the best resources for schools. For example, over 11,000 hours of expertise was poured into each of our new Year 7 resources. Further, Edrolo’s authoring process is unique, and differs from traditional publishers, in that everything is created in-house. We have in-house subject-specialist teams of 5–10 people who work full-time, all year, to research, author and quality assure the resources.
The second big part of this is partnering with schools. This has been a key part of our work from the start. Edrolo has defined a new industry-standard by working directly with schools through our dedicated learning innovation team who provide hours of pre and post purchase support focused on improving teaching practice. This includes set-up, onboarding, training and access to professional learning and guidance to get results, as well as strategic support to school leadership.
Any parting advice for other founders seeking venture credit?
Get to know your potential venture credit investor early!
And, with the blessing of each potential lender, speak to other founders and business leaders who have taken venture credit funding from the lender to get a broader picture of how the lender operates. A key question we focussed on was, “How did the lender act when the proverbial hit the fan?” and we learned so much from answers to this question.
