The educational technology field has become one of the first emerging fields to witness significant growth. Online learning has become the most popular learning solution for educational institutions as well as corporates. New technologies such as artificial intelligence are being applied more and more within the field of edtech in order to enhance the overall learning experience. However, institutions lack the necessary infrastructure and technology to deliver the highest quality of online learning solutions to large audiences and it is particularly challenging to develop this infrastructure in-house not just for corporates but also for universities and non-profit organizations. Enter Amesite (NASDAQ:AMST) – a robust edtech platform partnering with these institutions and creating a custom learning environment to enable the spread of online learning.
What Does Amesite Do?
Amesite is a software-as-a-service (SaaS), ed-tech company that offers content creation and a high-quality set-up for the online learning market used for educational and business sectors. The company utilizes machine learning to offer learners a mass-customized experience. The company has an impressive market that includes businesses, universities, colleges, and non-profit organizations. To provide the learners with a personalized learning experience and the instructors with an easy-to-manage interface, the company has integrated artificial intelligence with online learning. It also offers improved learning to college degree seekers and beyond. As the company aims to provide students with a cost-effective, reliable, and improved learning experience, it uses the advantages of existing college infrastructure and combines that with mass customization and cutting-edge technology.
As we can see in the above extract, the company has multiple sources of revenue for its platform through its SaaS model and has the ability to scale the number of users and the Annual Recurring Revenue (ARR) through this model. Based in Detroit, Michigan, this company was founded in 2017.
Ed-Tech Solutions For Businesses
Amesite offers an efficient ed-tech platform that can be effectively used by businesses to launch their courses and training programs to enhance employees’ skills. The trend of online education was introduced to continue the workflow during the pandemic situation, but now, online education has become an amazingly low-cost option for companies. The biggest challenges for the enterprises are the reliability and relevance of the content provided by some existing famous platforms such as Udemy and Coursera. Besides that, they face trouble tailoring their own courses under their own brand and offering that to their employees because of the lack of technological infrastructure. That is where Amesite steps into. This company establishes corporate ties where industries can use the cutting-edge online learning platform powered by the most advanced AI technology so that the industries can use a managed business learning program and customize their courses quickly and efficiently to provide the employees with job-specific certifications. Companies will be able to conduct a completely remote work curriculum in just 30 days by using some easy buttons.
Amesite has a detailed white paper on the reasons for enterprises undertaking learning programs for their work force and some of the key factors are highlighted in the above chart. Amesite’s offerings and its vast set of features is particularly relevant in this regard. Companies can use artificial intelligence and machine learning, customizable dashboards, and comprehensive data analytics to understand trends and make informed verdicts to enhance the skills of their team members. The platform of Amesite also comes with communication tools such as inbuilt video conference and messaging functionality that play a significant role in enhancing productivity by helping the team interact and engage productively with each other by utilizing upvotes and endorsements. The overall business platform of this company is strong enough to cheer up the team members to keep their upscaling process.
Partnerships With Universities & Non-Profit Organizations
The core revenue stream of Amesite comes from the services the company is providing to universities and non-profit organizations. The pandemic situation has triggered the necessity of virtual delivery in all experiences, including the learning sector, where Amesite is one of the key beneficiaries. The high-quality platform helps Universities to higher their learning experience level in a cost-effective way without compromising the quality. According to the analytics, the e-Learning market will likely reach $375 billion by 2026, and Amesite has an important role in this process. It offers customized and scalable e-Learning products in a single and user-friendly format that is very impressive for learners. Amesite is improving the online user experience and claims to help any organization make their online user experience as pleasurable as online shopping. There are several instances of the company’s custom and enterprise-wide work, such as the Henry Ford Museum and Wayne State University’s technical programs. They help the institutions to launch customized and scalable online learning products that can reach every learner by expanding their instructional market and its impact. The learning strategy tracks progress, sends notifications, and solves several enterprise-related problems in a completely managed online training and learning platform. They make sure that every educational institution can utilize the data to develop its future strategies.
Amesite’s collaboration with the City University of New York indicates its success as it is the country’s largest urban public University. It has joined the company to create and develop a professional learning experience on a CUNY registered learning portal. Every year, more than 500,000 students are provided with professional learning by CUNY. It also helps low-income students into the middle and beyond as 6 times as all Ivy League colleges. Amesite is helping them in scaling their professional offerings through this platform. On the other hand, Amesite has recently collaborated with the innovative foundation of the renowned asset manager Cathie Wood to provide its high-quality online learning platform for all its educational initiatives. Amesite should also be looking to increase its revenue through many more university collaborations in the upcoming years to scale the organization.
Large Addressable Market
Amesite’s addressable market can be split into ed-tech requirements for businesses and those for students and young learners. The enterprise market is largely untapped as the company’s white paper indicates that 87% of the surveyed executives have reported a skill gap in their employees whereas 70% CEOs identify these skill gaps as a threat to growth. Upskilling of the workforce is the need of the hour and can result not only in higher productivity and revenues but also in higher retention. The company’s white paper indicates that upskilling results in a potential 300% increase in digital transformation acceleration in organizations, an aspect which has become an absolute necessity for the sake of survival in today’s times. As per the research of Global Market Insights, the corporate e-learning market is expected to surpass the $450 billion mark by 2028 and is expected to witness a phenomenal growth in the coming years. The other key market that Amesite caters to, is the ed-tech market for students. As per the data of a Grand View Research report, the global ed-tech market was valued at $106.46 billion in 2021 and is expected to grow at an exceptionally high CAGR of 16.5% until 2030. Amesite is expected to benefit from this solid macro in the corporate and student ed-tech market and should easily outperform the market growth rate given its superior product offering.
Partnership With Cathie Wood’s Innovation Foundation
Non-profit organization partnerships are currently a key revenue stream for Amesite and one of the big recent collaborations that the company signed was with Cathie Wood’s Innovation Foundation. As we all know, Cathie Wood is a highly renowned investment manager and the Chief Executive Officer, and Chief Investment Officer of ARK Invest. The objective of her innovation foundation is to spread education and learning through the medium of technologically enabled innovation, preparing and inspiring students, teachers, and families to adapt to new educational technologies. Amesite’s online learning platform, Innovation Foundation Engage, uses advanced technology to enhance education focused on innovation. Moreover, their technology will assist Cathie Wood’s Innovation Foundation in involving everyone who wants to help them achieve their goal to drive online learning through an intuitive and comprehensive approach. This provides users with a wide range of resources available through a single platform and aligns with the Innovation Foundation’s flagship program to offer teachers and students access to innovative learning opportunities. Given Cathie Wood’s solid reputation as a globally respected and renowned thought leader and role model in the areas of innovation and finance and the collaboration with Amesite should have some kind of spill over effect on Amesite and result in many more such tie-ups in the future.
Strong Management Team
Amesite’s biggest asset is the company’s top leadership which has a tremendous history of success. The company is spearheaded by Dr. Ann Marie Sastry who is a successful serial entrepreneur. She was President, CEO, member of the board of directors, and co-founder of Sakti3, one of MIT’s 50 Smartest Companies, in 2015. Sakti3 was acquired by Dyson Ltd. in 2015 for $90 million after being backed by a global venture capital team. In 2015, Dr. Sastry was invited to the White House to be honoured for her technology entrepreneurship and to meet President Barack Obama. She also worked as an engineering professor at the University of Michigan before launching her business. She also established two academic research centres in intracellular signalling and advanced automotive batteries, as well as a global graduate program in Energy Systems Engineering. Dr Sastry has been the recipient of many awards over the years such as the ASME Frank Kreith Energy Award and the National Science Foundation’s Presidential Early Career Award for Scientists and Engineers during her 17-year academic career.
As we can see in the above snapshot, the company has some highly experienced Board members apart from Dr. Sastry. Mike Smiley is a key name in the company’s top management and has been with Dr. Sastry since the Sakti3 days. He has vast experience in the banking, health care, higher education, high-tech, non-profit, and retail industries. Barbie Brewer, another Board member and the Chief People Officer of Amesite has over 2 decades of experience in human resources leadership across multiple private and public enterprises in many different industries, and countries. She was also the VP of Talent at Netflix. Some other key names in the top management include Anthony Barkett, J. Michael Losh, Richard Ogawa, Gilbert Omenn, and George Parmer. Overall, it is safe to say that Amesite has a very robust management in place which can handle the reins of the company.
Key Risks
Amesite may have a highly differentiated technology and a robust platform but it operates in a highly competitive ed-tech market which has limited barriers to entry as well as many large incumbents with huge funding from venture capitalists who could penetrate their space. To accommodate growth and compete effectively, the Amesite management will need working capital to maintain adequate inventory levels, develop additional procedures and controls and increase, train, motivate and manage its work force. Amesite, Inc. is serving the global market since less than a decade which means it has a very limited operating history. As a result, many potential investors find it difficult to evaluate its business prospects and management. Amesite’s management may struggle to successfully implement and execute their business tactics, operating strategies and growth initiatives. If the management fails to accomplish their growth and organizational modification effectively, it may destroy their business and operational results. Another key risk worth highlighting is that Amesite has minimized their payroll and relies on third parties to grow and scale the company. Therefore, any change in pledged relationships or disruption of service run by third parties may badly affect them and subject them to liability. There is also the risk of the company’s IP i.e., its ed-tech platform being infringed. Last but not the least, one of the most significant risks that the company is currently facing is the ongoing global impact of Covid-19 as well as the geopolitical situation between Russia and Ukraine which has led to global economic uncertainty and could have a material impact on Amesite’ operations.
Final Thoughts
As we can see in the above chart, Amesite’s stock has been on a downward trajectory like most other high-growth stocks and broader markets, given the current microeconomic environment and rising interest rates. Though the company has $800k in terms of top-line in 2021, the new partnerships and client onboarding efforts are expected to multiply this many folds in 2022. The company’s offering to corporates allowing them to create and white-label their courses while using Amesite’s platform is bound to have many takers across the industry. Overall, we are extremely bullish on Amesite and we believe that the company is an excellent investment bet at current levels.
