Small Caps | Mar 07 2022
This story features 3P LEARNING LIMITED, and other companies. For more info SHARE ANALYSIS: 3PL
Technology has entered schools and education, and there’s no turning back to pre-covid status quo.
-A new era of personalised learning has begun
-Cloud computing and SaaS models facilitating a new generation of companies
-Increased demand for online learning tools anticipated
By Nikhil Gangaram
Students, and parents alike, breathed a huge sigh of relief last month as schools and education facilities across Australia opened their doors once again. Following the dark days of home-schooling, the future of education has entered a new dawn.
Throughout the digital age, schools and further learning institutions have gradually embraced innovation and the digital delivery of education. However, the pandemic has served as a catalyst to fast-track the (r)evolution in education technology.
Educators have had to condense years of change in online learning into the past 18 months of lockdowns and restrictions. The emergence of collaborative platforms and adaptive learning technologies have introduced a new era of personalised learning.
According to a report from consultancy FnF Research, the global e-learning market is to be worth an estimated US$374bn by 2026.
Naturally, the likes of Microsoft and Zoom are the first companies that come to mind.
However, there are several Australian listed companies that could be flying under the radar.
Although Australia’s education sector has a checkered history of industry scandals, the country currently boasts around 300 privately owned educational technology companies.
3P Learning ((3PL)) has had its ups and downs since listing on the ASX in 2014. The company’s main online product ’Mathletics’ dominates the primary school market in Australia, UK and parts of EMEA.
However, the company was hampered by stagnating licenses and technology platform changes.
Fast-forward to 2022 and 3PL Learning seems poised to capitalise on the rising tide of online education.
Following a merger with Blake eLearning last year, the online education company has revamped its produce offering, whilst also gaining a further 6m customers across Australia, the USA and EMEA.
The company’s flagship products, Mathletics, Mathseeds and Reading Eggs have been on the receiving end of multiple education awards and remain trusted learning programs across primary schools.
In addition to quality, 3P Learning also offers low price points for schools at $12.00 per user per year and $109 per user per year for direct-to-consumer.
Another intriguing company listed on the Australian exchange is Janison Education Group ((JAN)).
Janison specialises in providing digital assessment solutions for various education levels.
The company’s software aims to replace crowded and stuffy assembly halls and classrooms, whilst also providing institutions with control over compliance.
Janison sells its customisable online learning platforms through two avenues. The company’s software can be sold to a country for an annual fee of $100,000, or it can be engaged as full-service provider charging $700 per school.
To date, Janison has an impressive track record, with the company already delivering online assessments include the NAPLAN and ICAS tests.
Last year, the company delivered 10m tests across 117 countries. Despite having roots in Australia, the company generates approximately 20% of its sales elsewhere with a presence in around 120 countries.
In March last year, Janison was awarded exclusive provider status across 2,700 schools in Australia. Sensing the impending shift to digitise course material and exam delivery, the company has looked to further invest in the space.
In June last year, Janison acquired skills-based competition used from the University of NSW called ICAS Assessments. The company converted the product to fully digital, allowing Janison to service around 7000 schools around Australia from years 2-12.
There’s the opportunity to potentially cross-sell other products.
In addition, Janison also holds a five-year contract to carry out the Program for International School Assessments (PISA). The testing program based in Paris, services 90 countries within Janison’s addressable market.
Head in the clouds
Cloud computing has to be one of the most important technologies to have emerged in the past decade.
Combined with software as a service (SaaS) business model, this technology has given birth to a new generation of tech service providers.
OpenLearning ((OLL)) is one of a handful of companies listed on the ASX that are looking to implement these technologies in the education sector.
The company’s technology is a cloud-based platform that is powered by Microsoft Azure. OpenLearning allows end-to-end education delivery, from student acquisition and payment, through to assessment and certification.
The company’s platform allows education providers to design and deliver accredited, online or blended programs for undergraduate and post-graduate degrees. Through its SaaS model, the company charges clients an annual license in addition to support and hosting fees to use the platform.
ReadCloud ((RCL)) is another intriguing company which is the leading provider in Australia of eReading software.
The company’s platform delivers curriculum eBooks to schools with over 200,000 titles available. ReadCloud’s proprietary eBook platform delivers interactive digital content to students and teachers, allowing students and teachers to share notes and collaborate.
With an increasing number of students studying online, administration and compliance workloads are also bound to grow.
ReadyTech Holdings ((RDY)) aims to fill this gap by implementing its technologies to help clients manage student administration tasks.
The company recently bolstered its SaaS business model, following a $4.8m acquisition of source-to-contract management module Open Windows.
Online learning here to stay
The seismic disruption of the pandemic is poised to leave a lasting impression on the education sector.
Even as students flock back to classrooms, institutions have accepted a blended approach to education, where in-person and online learning modes are now the norm.
According to research from Cluey Learning, up to 42% of school students in Australia have used educational support and another 42% have used tutoring services in the past two years.
Additionally, Cluey noted increased demand for online learning tools will remain as parents look for ways to make up lost classroom time.
Despite the convenience and efficiency offered by virtual education, there remain various question marks. A recent survey from Cluey noted that 96% of parents learnt that some children need more individual assistance when it comes to their schooling.
Virtual schooling requires students to work through online courses independently, supplemented by occasional virtual interactions with teachers.
Whilst this may benefit self-motivated students, online learning poses a risk in broadening the chasm between students who need more face-to-face teacher guidance.
Again, this presents an opportunity for the likes of Kip McGrath Education Centers ((KME)) and various other tutoring services,
In addition to accessibility and academic progression, the cultural and emotional health of students may also come under fire. In addition to online bullying, many students may feel robbed of their educational experience which extends beyond the classroom.
Regardless, most education institutions will be looking forward rather than back to pre-pandemic teaching with technology poised to play a bigger role.
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For more info SHARE ANALYSIS: 3PL - 3P LEARNING LIMITED
For more info SHARE ANALYSIS: JAN - JANISON EDUCATION GROUP LIMITED
For more info SHARE ANALYSIS: KME - KIP MCGRATH EDUCATION CENTRES LIMITED
For more info SHARE ANALYSIS: OLL - OPENLEARNING LIMITED
For more info SHARE ANALYSIS: RCL - READCLOUD LIMITED
For more info SHARE ANALYSIS: RDY - READYTECH HOLDINGS LIMITED