Global investor company buys into Dunedin firm

Education Perfect’s work space at its head office in Dunedin yesterday. PHOTO: LINDA ROBERTSON
Education Perfect’s work space at its head office in Dunedin yesterday. PHOTO: LINDA ROBERTSON
Dunedin tech company Education Perfect was born from a budget of $200 but a new deal has valued it at $455million.

Education Perfect chief executive Alex Burke, of Dunedin, said it was ‘‘fantastic’’ to see Otago and New Zealand tech companies competing on the world stage.

Earlier this week, global investment firm Kohlberg Kravis Roberts (KKR) announced it would take a majority stake in Education Perfect, which Mr Burke described as an ‘‘amazing result’’.

The company was launched in 2013 as a spin-off from Language Perfect, which was launched in 2007.

It was founded by brothers Craig and Shane Smith and Scott Cardwell.

The story began when Craig Smith, originally from Auckland, was at secondary school.

NCEA had just been launched and he was struggling to learn French and Japanese.

Writing out words on paper was proving inefficient and pronunciation could not be heard.

He developed the first edition of Language Perfect just for himself and his classmates.

On arrival at the University of Otago, he teamed up with his brother and Mr Cardwell and turned Language Perfect — winner of the 2007 Audacious student start-up challenge — into a business.

In 2014, Mr Smith, then 25, was named Internet Entrepreneur of the Year at the Institute of IT Professionals’ New Zealand excellence in IT awards.

The brothers have not been involved in the day-to-day operations of the business for about three years but have remained active in an advisory role
on the board.

Education Perfect now has offices in Australia, New Zealand, Singapore and Dubai, and is used by one million pupils and 50,000 teachers in 3000 schools across 50 countries.

Around 150 of the company’s 200 staff work out of its Dunedin office and Mr Burke said the day-to-day running of the company would not change with the new investment.

‘‘Nothing will change. It will still be a Dunedin and Otago home. We see that Kiwi heritage as really important to us.

‘‘I will be staying in with my leadership team so it will be business as usual,’’ he said.

The investment was going to help the company continue to grow globally, he said.

KKR’s investment would see Malaysian group Mulpha Credit sell its 37% stake in the company.

Mulpha invested into the company in 2017 alongside
Five V Capital.

KKR would be making the investment from its Global Impact Fund, which was focused on investing in market-leading companies whose business contributes towards the United Nations Sustainable Development Goals.

Under the deal, KKR would be the majority shareholder, with Five V and the Smith family continuing as minority shareholders, Mr Burke said.

He declined to give the specific amount of KKR’s shareholdings and purchase price.

There were specific areas of growth Education Perfect wanted to target, Mr Burke said.

‘‘Our goal is to keep pushing the adoption of our products in New Zealand and Australia, both our school products as well as our home products.

‘‘The broader goal is that we want to become a major edtech company globally, with a mission to improving education outcomes,’’ he said.

Education Perfect had been looking for an investment partner to accelerate its growth, Mr Burke said.

‘‘We know we have a world-class product but we need to let the world know that it is a world-class product and KKR’s global impact fund will allow us to do that.

‘‘The global market is a level playing field now due to travel restrictions around the world and there is a real opportunity for Kiwi companies, with the stability we have here, to really thrive,’’ Mr Burke said.

The New Zealand Herald reported the deal was subject to approval by the Overseas Investment Office.

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