Daily Markup #836: NewCampus CEO Will Fan on how education companies can embrace revenue-based financing to fuel growth in bear markets and more from this week

Photo credit: NewCampus

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  • Scaling up an education business in the midst of a bear market when capital is scarce requires out-of-the-box thinking.
  • “As someone who recently helped launch a platform for exploring alternative financing paths for education companies, I’ve found revenue-based financing to be a promising pathway to empower education startups and help navigate economic uncertainties.” –  Will Fan, CEO of 500-backed edutech NewCampus 
  • What is revenue-based financing (RBF)? It’s a funding model that has been around for a while that allows companies to secure capital by sharing a percentage of their future revenue with investors. Unlike traditional loans, RBF allows business owners to avoid burdensome debt, and unlike equity investments, it doesn’t require giving up ownership stakes. 
  • The best part? This approach aligns the interests of investors and education business owners, with investors directly benefiting from the company’s growth. 
  • “Startups can focus on achieving their growth objectives without the immediate pressure of profitability. Instead of worrying about repaying loans or diluting equity, education companies can concentrate on delivering value to their customers and perfecting their offerings. This approach lays the foundation for sustainable growth that can outlast economic turbulence,” shares Will.
  • Bootcamps provider Le Wagon and Lambda School offer tuition-free education, allowing graduates’ to pay a percentage of their future earnings after securing jobs. 
  • “In a hypergrowth phase, the focus is often on rapid expansion, market penetration and scaling infrastructure. However, the shift to revenue-based growth necessitates a more balanced approach that emphasizes sustainable revenue streams, profitability and long-term viability,” added Will.
  • Read the full story here.

More from this week

  • Urbanmetry’s Cha-ly Koh on being addicted to doing things differently, and being told she’d make a bad architect
  • eFishery is expanding their tech solutions for rural areas, catches the attention of rest of world
  • Pandai partners Prudential to teach children about financial literacy and money management via app
  • Grab launches Web3 wallet in Singapore, complete with NFT vouchers for rewards and payments
  • Carousell Hong Kong offers same-day delivery for heavier items with Lalamove    
  • Neuron Mobility releases study of 10,000 global e-sScooter riders, and they’re growing really popular among young women
  • Angin teams up with BCG to launch research on female entrepreneurs who are breaking barriers and driving economic growth
  • Pomelo celebrates 5 successful store openings in Indonesia, 3 more to come in 2023


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