In its half-year results to 30 April 2021, Dev Clever (DEV ) said it continued to make “material and incremental progress” over the period as revenue soared 531% from £0.38m in 1H20.
The education-focused technology firm said its revenue increase of 531% to £2.4 million from £0.383m in 1H20 was supported by ‘significant contract wins’ in the Educate division.
Dev slashed its EBITDA loss for the period to £0.162m from a loss of £0.56m in 1H20 and reported an adjusted positive EBITDA of £0.041m compared to a loss of £0.51 in HY20 which the Group largely attributed to new contracts partially offsetting an increased cost base as it scaled its sales, marketing and administrative resources to support its accelerated growth.
Cash and cash equivalents came to £8.65m reflecting DEV’s recent £15m fundraise and partially offset ‘by the acquisition of intellectual property assets of £0.04m, software development expenditure of £0.97m and net cash outflow from operating activities £0.089m, reflecting the increase in working capital following delivery of Educate contracts.’
As part of its Lenovo agreement, which it said remains a key partnership in the North American markets, DEV successfully launched six full pilots over the half-year of the joint Launchyourcareer.com and Veative STEM-based learning solution in the United States.
In December 2020, the Company unveiled a five-year exclusive partnership agreement with Veative and NISA, India's largest governing body for budget private educational institutions.
This five-year partnership will result in Dev Clever's Launchyourcareer.com being utilised by NISA as ‘the platform-of-choice’ to deliver a minimum standard of career guidance across its network of 70,000 affiliated budget private schools and around 13 million students in India.
DEV said the acquisition of Veative will allow it to secure full commercial value of the NISA partnership and control the future roadmap for the development of its joint platforms.
Since the period end, DEV has continued to focus on the launch of its careers' platforms in India in partnership with Veative and NISA, securing its first material contract in India worth US$1.5m, to implement the Company's immersive careers guidance and STEM-based virtual reality educational library at schools under central and state governments in India.
DEV also secured a government funded pilot to deploy its platform and VR learning services into one of India's 1,248 central government KV schools which are known for innovation and can be rolled out to the rest of the central government school sector subsequently, it noted.
It said the pilot will assess the impact within the central government school system and, if successful, be further rolled out later in the year. The trial represents the Group’s first entry into the large Indian public-school sector, which consists of around 1.1 million schools.
Last week, DEV’s wholly owned Indian subsidiary, Launchmycareer Pvt, and Veative, entered into an agreement for an initial project with The Common Service Centre Academy in India. The initial pilot project, which will last 45 days in total, will see the Company's immersive career guidance and learning platform go live in 25 academy centres in early July 2021.
“Our innovative Indian partnership and roll-out initiatives with Veative and NISA remain on track, and we have recently secured both local and national government contracts. The post period end project with The Common Service Centre further demonstrates the significant interest and confidence that our platform is receiving in India,” said CEO, Chris Jeffries.
Looking ahead, Dev Clever highlighted that the EdTech market ‘remains robust’. It said it believes there is “a globally growing need and demand for more effective careers platforms that can engage young people and connect them directly with their future employers.”
Through its partnerships with Lenovo, NISA and Aldebaron, the funding that it has secured and combined with the enlarged capabilities of Veative Labs and TILG, DEV said it is ‘now able to go to market at scale and attract many millions of users to our platform globally.’
As a result of its improved financial performance and recent contract wins, which DEV said ‘demonstrates its ability to commercialise its core EdTech platforms’, the Board said it is ‘very well placed’ to exceed management's expectations for the year ending 31 October 2021.
Commenting on the Company’s outlook, Jeffries added, "With our substantially increased financial resources we can and will support accelerated investments in our people, proprietary content, technology, partnerships, M&A and infrastructure. This in turn should translate into additional growth already strongly underpinned by recent contract wins.”
In particular, DEV said its recently secured partnerships with The Inspirational Learning Group (TILG) and Aldebaron could substantially extend its proposition and strengthen its entry into new markets whilst allowing the Group to “swiftly expand its global user base.”
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Today’s results reflect Dev’s progress in securing its near-term financial requirements and accelerating the planned growth into the Indian market alongside Veative and NISA.
Dev’s recent agreement with Veative to acquire its wholly owned Indian subsidiary Veative Labs Private ("VLPL") for around £54.75m has been described as a “transformational” deal.
Amongst other things, the dedicated resources and infrastructure in India will ‘maximise the opportunity with NISA affiliated schools and the wider BPS (budget private schools) sector.
Looking ahead, and as a result of its strong performance, the company believes it is 'very well placed to exceed management's expectations for the full year ending 31 October 2021.'
Shares in Dev Clever have seen a more than three-fold increase since the beginning of 2021. The stock was trading 4.76% higher this morning at 44p following the announcement.
Reasons to DEV
Dev Clever Holdings is a software and technology group based in Tamworth, United Kingdom, specialising in the use of cloud-based VR and gamification technologies to deliver rich customer engagement experiences across both the education and commercial sectors.
Its educational division offers careers guidance and recruitment solutions to secondary schools, colleges, universities, apprenticeship providers and employers with digital products to recruit and develop applicants and skills within their institutions and organisations.
Through its VR Careers Experience, VICTAR, the group encourages ‘hard to reach students disengaged from the process as well as reaffirming students on their career journey.’
Focused on bridging this global skills gap, DEV offers technology designed to support schools globally and to embrace immersive technology and revolutionise career guidance programs.
Due to a new reality of distance learning in the age of the COVID-19 pandemic, the EdTech space has surged with analysts previously reporting an average increase in revenue of 335% according to an industry impact analysis by Rootstrap.
According to market data published by MarketsandMarkets, the EdTech and Smart Classroom Market size is expected to grow globally from $85.8 billion in 2020 to $181.3 billion by 2025.
In May this year DEV entered into an agreement with Intrinsic Capital Jersey Ltd, founded by serial entrepreneur and investor Chris Akers, to raise up to £10m (gross) through a subscription at 10p.
The fund raised in May enabled DEV to accelerate its growth plans with collaboration partners and clients whilst also funding the expansion of the Company into new territories.
The valuation multiples for EdTech Companies continues to rise as larger multinational companies acquire innovative players in the space to capture growth.
In recent weeks, the Company announced that it had entered into a five-year exclusive partnership agreement with Veative Labs (“Veative”) and the National Independent Schools Alliance (“NISA”), India’s largest governing body for budget private educational institutions.
The agreement saw all parties execute an implementation and rollout schedule from last month, which will result in Dev’s Launchyourcareer being utilised by NISA as the platform-of-choice to deliver a minimum standard of career guidance across its schools.
NISA represents over 70,000 budget private schools in India, attended by c.13 million students. Chris Jeffries, Chief Executive of Dev Clever, has described the agreement as “a significant opportunity to support the development of millions of young people in India.”
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