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Rep office reports

Edtech start-up becomes SA's first billion-dollar unicorn (Economic Division in South Africa)
Kind: Rep office reports  Organization: Department of International Cooperation  Publish Date: 2021-08-12 13:38
Online education business Gol will use the funds to create new partnerships for content and resources and expand its edtech product offerings

SA-founded online education business Gol has become the first start-up in SA to reach a $1bn (R14.8bn) valuation, earning it the coveted “unicorn” status reserved for start-ups with a valuation of more than $1bn.

This week Gol, a corporate education content hub for on-demand training and resources, announced it had raised $200m (just under R3bn) in a series D funding round, valuing the company at more than $1bn.

Founded in 2015 by South African Melvyn Lubega and Australian Andrew Barnes together with a group of high school friends, the online learning platform says it has more than 3.5-million learners at more than 1,600 customer organisations worldwide.

The company has attracted big international investors, including Japan's SoftBank — famous for backing WeWork and Uber — which led the round, alongside AirTree Ventures, Salesforce Ventures, Blue Cloud Ventures, Larsen Ventures, TEN13 and Tiger Global.

The business previously received financing from the likes of Endeavor Global Catalyst, M12 (formerly Microsoft Ventures), Madrona Venture Group, SEEK and Y Combinator.

Gol has raised $280m in total to date.

The company says the funds will be used to create new partnerships for content and resources, expand its edtech product offerings, growing its physical presence globally, and scaling up its team.

Gol has increased its user base by more than 300% year on year, “largely driven by rapid expansion in key markets and government contracts with the Malaysian and Singaporean governments”. The company sees opportunities to expand in the US and Europe, driven by integration with platforms such as Microsoft Teams and SAP.

In addition, “there is opportunity for Gol to serve SA corporates and the public sector which the company has not yet tapped into”, it said.

In a statement, Lubega said: “Across the continent over the last few years there has been greater interest and greater valuations being placed on businesses either founded by African entrepreneurs or being built on the continent. That is part of the groundswell that highlights how backing African entrepreneurs as an investor and attracting capital to the ecosystem is actually a very compelling value proposition.”

Gol's funding round comes at a time when online educators are in the spotlight following a crackdown on technology companies by China's government in which the sector was a victim.

Chinese authorities recently declared education technology (edtech) businesses should be non-profit organisations and that they do not want foreign capital invested in education platforms. Chinese edtech stocks were down 70% on the declaration as investors questioned the viability of such businesses without a profit incentive in place in what had become a lucrative industry.

The education sector, which is estimated to reach $8-trillion globally by 2025, has been slow to digitise. The Covid-19 pandemic and subsequent work and learn-from-home trends have helped increase adoption of online education from 2020.

SA's largest public company, Naspers, has also been getting in on the action, adding education as a core focus in addition to classifieds, fintech and food delivery, earlier this year.

The group's Amsterdam-listed subsidiary Prosus's largest deal to date, across sectors, has actually been in an edtech company. Earlier in June, Prosus said it would acquire Stack Overflow, a knowledge-sharing platform for developers and technologists, for $1.8bn. The group has invested more than $3bn in edtech to date.
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Update: 2020-04-08
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