Go1 is the Spotify of corporate learning š¦ Transcend Newsletter #52
The only Aussie edtech unicorn is growing into a global leader.
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If youāve followed this newsletter for some time, you know I often bring up one market thatās larger in value than Ethereum: the $360b Corporate Learning market, which I first broke down in Rethinking Management Training.
In this space, there is an emerging leader: Go1, our next (and only Aussie) unicorn in the Edtech Unicorn World Tour with Edtech Insiders!
Go1 is the Spotify of the corporate learning market, which aggregates and curates learning for companies. Letās dive into Go1!
What is Go1?
Go1 was founded in 2015 in Brisbane, Australia by Andrew Barnes (currently its CEO), Vu Tran (Head of Growth), Chris Eigeland (CRO) and Chris Hood (CTO). The inspiration for the business came from Tranās frustrations as a medical trainee, as he had to complete his hand-washing training at every new hospital he visited. The vision for a more ālegibleā learning platform that transfers oneās learning journey across companies and places kickstarted Go1ās product vision.
Go1 is an aggregator for on-demand courses for employees, which centralizes +100,000 asynchronous corporate learning resources (across subjects like compliance, growth, onboarding, etc.) for over 3,000 enterprise customers and 3.5M employees as users. It became a unicorn last year when it raised a $200M Series D from SoftBank Vision, Microsoft, Salesforce Ventures, SEEK and Tiger Global, among many others.
Go1 aggregates learning for companies
You can think of it like the Spotify of corporate learning:Ā instead of building its own content, Go1 aggregates courses from 200+ providers like Skillsoft, Pluralsight, EdX, Coursera, Harvard Business Review, or Blinkist. For these content providers, Go1 represents a source of revenue as they distribute royalties when the content is consumed.
The key to Go1ās success is that it makes companiesā lives much easier by aggregating all their corporate learning providers, especially the standardized learning content that companies have to offer at a national/regional level (lots of compliance training, employee onboarding, etc.). Instead of signing deals with 10 separate learning providers and using their individual tools, a company can simply use GO1 and access courses from many providers in one place.
Interestingly, Go1 both directly competes AND collaborates with a few big other players in the space, like Microsoft or Skillsoft. The corporate learning market is one with thousands of providers that sometimes compete and sometimes collaborate, and it can be quite messy.
So letās untangle the corporate learning market!
Corporate Learning is messy
The corporate learning space is messy because of the number of players, and the complex ways they have to work together to serve companies.
There are three themes I keep in mind to describe the corporate learning market: itās complex, itās hard to sell into but easy to retain, and itās becoming more integrated.
#1 Itās complex:Ā there are hundreds of specialized players
How complex can this market be, you ask?
Just look at this graph.
In this map, there are 9 steps in the value chain, and each influences the other. I have simplified the chart to describe the journey of companies to provide learning to employees, and the main routes that exist today: going vertical through platforms that own and deliver the content (like Udemy, Coursera, Skillsoft, LinkedIn Learning or Pluralsight), or aggregating different content creators (like Go1).
#2 Itās very hard to get customers, but very easy to retain them
Consumer startups donāt need any marketing to start selling, they just need a good product! Corporate learning startups are different ā they often require a strong investment upfront to hire salespeople, they endure long sales cycles and need a fully built product to make their first sales. As a result, itās pretty difficult to get started selling a corporate learning product!
But once you cross that initial hurdle, itās relatively easier to scale! The corporate learning divisions of companies like Skillsoft, Udemy or Coursera all have between 100% and 120% net dollar retention, meaning that they make more money from customers every year (negative churn!). No one wants to change these products once they are installed in a company, which helps the companies scale.
#3 The market is integrating
With every value chain, you have to ask yourself whereās the power? What part of the process is hardest to replace?
In the case of corporate learning, itās the access to customers and their employee data. Companies tend to stick with their HR data platforms and LMS systems for decades, and they represent a fundamental part of the infrastructure of the company.
Companies like Microsoft, Workday, SAP or Cornerstone have a lot of power over other companies in the market because they own that part of the value chain, and are actively integrating companies that cover other parts of the value chain. This explains why Microsoft integrates with Go1, why Cornerstone acquired Edcast or why Skillsoft bought Codecademy last year.
Go1ās opportunity as an aggregator
But letās bring this back to Go1.
Go1 is sitting in a unique position as an aggregator āĀ content creators eventually become dependent on the royalties that the aggregator pays out, as long as Go1 can increase their customer reach to new markets.
Go1 is still small compared to its competitors.
It has an estimated yearly revenue of $77M. At 3,000 customers, that represents an Average Customer Value (ACV) of around $23,000. For comparison, this is lower than Coursera ($48,000 per customer) but much larger than Udemy ($5,000).
Its direct competitors are other aggregators like Degreed (also a unicorn) or Edcast (recently acquired by Cornerstone) and vertical platforms like Udemy for Business (2x Go1ās revenue), Coursera for Business (1.5x its revenue), Pluralsight ($500M in revenue) or LinkedIn Learning.
What can Go1 do to grow from here on?
It faces a decision: to continue growing as a Spotify, or to become a Netflix.
Go1: Spotify or Netflix?
Spotify has always been an aggregator, giving an important part of its revenue to record labels. But it grew its market so fast, that eventually, it became a global leader as consumers preferred its platform.
Netflix took the opposite approach āĀ after aggregating movies and shows, it eventually moved to owning everything it showed on its platform. They started producing their own shows based on their internal usage data, and managed to grow into a global leader.
Go1 could go in either direction āĀ continue aggregating learning for companies and focus on growth (a la Spotify) or build their own content and focus on better margins (a la Netflix).
My sense is that Go1 will remain as a Spotify for a while.
Given how hard it is to grow, Go1ās future depends on its ability to reach new customers. But once it is in, it will stay for a while (negative churn!), which isnāt true in industries like consumer entertainment.
This is in line with the discourse from its leadership: Go1ās CIO shared that this yearās priority is market expansion into the US (new offices and partnerships in the country), Europe (recently acquired Coorpacademy in France and Switzerland) and Southeast Asia (government contracts with the Malaysian and Singaporean governments). 70% of new revenue last year came from outside of Australia, which will become even more of a priority.
Go1 has grown into unicorn status through aggregating the worldās content for companies.
My prediction here is that it will continue to do so, given the idiosyncrasies of the corporate learning market (negative churn, high LTV, barriers to entry), and will focus on growing its customer base to continue building as an organization.
If you are building a startup in the corporate learning space, reply to this email and say hi! Weād love to meet you
Many thanks to Alex Sarlin for the great feedback!
The Roundup āļø
š Are you in San Francisco? Join us for our SF Edtech Meetup tomorrow āĀ weāll gather founders, investors and operators in the space in a beautiful location near the Palace of Fine Arts.
š We tend to think of college as a monolithic experience āĀ but what if we could include and expand the diversity of options available?
š° The Angellist Venture report will give you a 360 degree view of where the startup funding landscape is at after a rocky Q1 in 2022.
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