Netclass
Shanghai, China
Industry: EdTech
Region: China 🇨🇳
Founded: 2003
Expected Valuation: $75.38 million
IPO Date: 2023 (expected)
Netclass Technology, Inc.
Key Company Facts
| Founded | 2003 |
| Headquarters | Shanghai, China |
| Sector | Education |
| Industry | Edtech/Online Education |
| Founders | Jianbiao Dai |
| Number of employees | 35 |
| IPO Date | 2023 (expected) |
| Number of investors | N/A |
| Total funding | N/A |
| Valuation estimate | $75.38 million USD |
Company Overview & History
NetClass Technology is a Shanghai-based company that primarily operates through its wholly-owned subsidiary, NetClass China, in the People’s Republic of China.
The company specializes in B2B (Business-to-Business) smart education, providing IT solutions to various institutions such as schools, training institutions, corporations, and government agencies, mainly the Shanghai Municipal Education Commission.
NetClass Technology’s offerings include SaaS subscription services and application software development.
Its solution modules range from teaching management and campus management to online teaching, online examination, epidemic prevention and control, EDC (Education Chain) blockchain system, and lecturer evaluation services.
The company is committed to providing high-quality and reliable products to its customers, aiming to maintain sustainable business growth over the long term.
Financial Performance
In the fiscal year ending September 30, 2022, NetClass Technology reported annual revenue of $9.26M, marking a decrease of -19.90% from the previous year.
The company, which employs 35 people, had a market cap of $75.38M as of the same fiscal year. In terms of financial performance, the company reported a negative free cash flow of $571,449 for the twelve months ending September 30, 2022.
Revenue
| Year | Revenue (USD) |
|---|---|
| 2021 | $11.56 million |
| 2022 | $9.26 million |
Business Model
NetClass Technology operates a customer acquisition model that targets enterprises, schools, government agencies, and training institutions. The company offers its services through a subscription-based service (SaaS) or via project-based arrangements.
As of September 30, 2022, it had attracted $2.9 million in fair market value investment from investors, including Lang Wide Investment and company Chairman Dai. Despite a decrease in revenues, the company’s selling and marketing expenses as a percentage of total revenue have dropped, indicating some efficiency improvements.
The market for education technologies in China, where NetClass operates, was an estimated $69.6 billion in 2021 and is forecast to reach $212 billion by 2024.
This growth is driven by increasing demand for online education due to the pandemic, improved online technological innovation, and rising disposable income from consumers.
However, NetClass Technology operates in a highly fragmented industry and faces substantial competition from a variety of vendors in China.
Estimated Valuation
| Year | Valuation (USD) |
|---|---|
| 2022 | $75.38 million |
Risk Factors
One of the most significant risk factors for NetClass Technology is the recent crackdown by the Chinese government on the country’s ed-tech industry.
The Chinese central government has been increasingly wary about the role of private capital in the private education sector, and has implemented regulations that have caused large-scale layoffs and existential crises for small-to-medium-sized ed-tech providers.
This has resulted in a significant blow to the private tutoring and test-prepping industry. NetClass Technology, being an ed-tech provider itself, is subject to these same risks.
Despite this, some argue that Chinese entrepreneurs are adept at adapting quickly to changing regulations.
Market Opportunity
NetClass Technology has identified a significant market opportunity in China’s ed-tech sector.
The company is a B2B innovative education specialist that provides IT solutions to schools, training institutions, corporations, government agencies, and other institutions or corporate customers.
It offers a variety of solutions including teaching management, campus management, online teaching, online examination, epidemic prevention and control, and more.
The company has also incorporated blockchain technology into its offerings, and aims to provide high-quality and reliable products to its customers.
With the IPO, NetClass plans to expand its business and further develop its courseware and technology offerings.
Competitors
- Ruanyun Edai Technology (RYET)
- Jianzhi (JZ)
- Genius Group (GNS)
- New Oriental Education (EDU)
- Golden Sun (GSUN)