Jamie Beaton and Jake Millar. Photo / Supplied
Entrepreneurs Jamie Beaton and Jake Millar are set to join forces as Crimson Education acquires Unfiltered for an undisclosed sum.
The move will see both entrepreneurs, still in their 20s, operating under the Crimson umbrella, which last year claimed to be valued at around $332 million (US$240m) following a funding round.
Millar, who founded Unfiltered in 2015, will join the advisory board of Crimson and now work on a number of projects associated with developing what Unfiltered offers.
Unfiltered currently features a catalogue of 300 interviews with prominent business executives from around the world, including 42 founders of so-called unicorns (billion-dollar companies).
Millar says the purpose of Unfiltered was always to democratise access to the best business thinking and that Crimson acquisition will take this objective even further.
Crimson founder and chief executive Beaton says the aim now is to incorporate this content into Crimson's offering and thereby give students direct access to the insights of the various entrepreneurs featured.
"What we're trying to do is systematically open up entrepreneurship as a channel around the world," says Beaton.
"This acquisition represents further development of the content we have to enable our learners."
The tech scene has in recent years seen the emergence of a number of platforms that offer access to expert knowledge from some of the best in their field – most notably the Masterclass series of online videos, which offer multi-lesson classes across a number disciplines.
Asked whether Crimson was looking to cast Unfiltered in the Masterclass light, Beaton drew a distinction between the two offerings.
"They [Masterclass] focus on a very broad range of experts, but Unfiltered has taken the approach of going deep on entrepreneurship, leadership and business," says Beaton.
"Masterclass does exceptional content across a wide range but the depth isn't there necessarily. It's more for the curious learner who might dabble in a few different hobbies, whereas Unfiltered is a heavy-duty push into entrepreneurship."
The acquisition comes amid some controversy for Crimson, with the prospect of a $10 million lawsuit hanging over the firm.
In May next year, Crimson will fight accusations that the idea for its new online high school was acquired from rival Eurekly as part of a lengthy and bitter legal spat between the two parties.
In a separate civil suit, Beaton is seeking damages on account of his claim of having been assaulted by Eurekly managing director Austen Clark, who denied the allegations in previous media reports.
Beaton wouldn't comment on the details of the case or the negative PR that's been swirling on the company, saying he was singularly focused on growing his business and investing in the student experience.
The adverse press has thus far not done enough to dissuade former Prime Minister John Key, who last year increased his stake in the firm and took a seat on Crimson's advisory board.
"There are two sides to every story," Key tells the Herald.
"This is a competitive space and from time to time companies bump into each other. The other companies I'm involved with in Silicon Valley will say it's mostly just the nature of the operating environment."
Key says he chooses very carefully when deciding who to get involved with and doesn't regret backing Crimson.
"I get tonnes of offers and the vast bulk I turn down," he says.
"In Crimson's case, I'm a great believer in both Jamie and the vision the business has. That doesn't mean there aren't risks. There are in every business. And to make an omelette, you have to break a few eggs."
This lawsuit isn't the only question hanging over the business. Observers have for a number of years cast a sceptical eye over Crimson's valuation.
Experienced investor and entrepreneur Ben Kepes tells the Herald he's always battled to understand how Crimson would eventually reach enough scale to justify the valuation the company has been given in its market evaluations.
He further adds that he isn't sure how the acquisition of Unfiltered, a company which itself has faced questions about a viable road to profitability, will help Crimson to reach revenue levels necessary to achieve its objectives.
The issue of scale has raised its head a number of times, with questions being asked about how much money the company could actually make through its strategy of helping students get into elite learning institutions. This has always appeared to be a single-serving strategy, which offered little hope of repeat revenue from the same student.
Beaton doesn't shy away when questioned on the company's ability to deliver scale, saying that its strategic shift through the launch of a fully registered online high school (Crimson Global Academy) will help to ensure the business delivers consistent revenue in coming years.
The school is registered in both the United States and New Zealand and has already attracted 200 students from 29 countries.
Around 30 per cent of these students are full-time, meaning that they rely on the Crimson Global Academy as their primary source of education.
The timing of the school is well suited to the challenges of the global pandemic, which has seen students elsewhere in the world confined to their homes during lockdowns. This has often left parents and students at the mercy of the structures and approaches put in place by the schools they attend.
But Crimson hopes to develop something bigger than a viable schooling alternative during a pandemic and is also looking to increase its student body in New Zealand by hosting an open day this weekend. The cost for a full-time enrolment is around $16,000, whereas part-timers will have to pay $4000 per subject.
Beaton says the company is also looking to improve the teaching experience by incorporating technology that will track the engagement of students while they attend a class.
"During all our classes, we're able to track our students' participation across every class in terms of how much they speak and the sentiment of what they say," says Beaton.
"We monitor that data over the course of about eight weeks in each phase and then give parents a detailed view of how engaged their kids are and how those trends are moving over time."
Beaton says the advantage here is that parents now have more than just the recall of the teacher to rely on when it comes to getting feedback on their children. It's essentially an attempt to bring the teacher-parent meeting into the digital age.
The hope here is that these developments give Crimson an edge over other private schools and pull in enough students to keep the revenue numbers ticking along.
Crimson says its current projections show the business on track to deliver revenue of $50 million in 2021, but it will still be a long road to counter the hefty losses the company has reportedly been running at in previous years.
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