2021UNDERGRAD EDUCATING THE CLASS OF COVID19 19th AUGUST 2020 - www.swissgrowthforum.io
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EVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
2021UNDERGRAD
EDUCATING THE CLASS 2021Undergrad
OF COVID19
2021Undergrad is the brainchild of
international investment banking
professional Andreea Porcelli. Her
business partner on the sports side of
the project is Californian lawyer and
businessman Joseph Konowiecki, who
is CEO of AES which is currently
forging a partnership with sports
specialst ASM.
2021Undergrad is arguably the world’s
first solution to the massive disruption
of on-premise tertiary education. Mrs
Porcelli boasts tangible connections
2021Undergrad provides information-based with the world’s further education
solutions for both universities and potential system. Her historic association with
students, worldwide. Freshers in 2020 and universities on a global basis remains
2021 will probably be severely disrupted by pertinent.
Covid19.
In 1994 she was the author of “A Guide
A significant number of students will likely to International Schools 1994-95.”
seek remote learning. As a result, universities In 1997 she founded and sold the
will have to advertise more. Equally important, world’s first website devoted
students will need to evaluate more thorou- to Study Abroad
ghly which courses offer value for money. (www.whereintheworldshouldistudy.org)
2021Undergrad provides both services. and remained in educational
consulting throughout
Universities and the 2021 fresher intake both her investment banking career.
face severe challenges.
Right now, it is uncertain whether the first
semesters, will commence on schedule.
Moreover, Covid19 could disrupt intakes in subse-
quent years. As a result, it is expected
that some universities may buckle due to
financial pressures while students increasingly
use conferencing facilities to study remotely.
www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
Universities already spend around US$2.1bn in the US and a further US$2.2bn overseas on
advertising.
2021Undergrad benefits schools by communicating directly with those who seek to select schools
on an informed basis. Advertising revenues will form a critical part of the 2021UG business model.
2021Undergrad offers schools the ability to communicate with parents and students on a targeted
basis.
2021Undergrad plans to execute targeted responses to these identifiable problems.
The company offers parents and future students a subscription service which will enable them to
identify which courses to attend and which offer value for money. Moreover, the research will
address the more critical issue of which tertiary schools will be viable in the long term. Given a
number of universities will face substantial financial strain, a wave of closures and mergers seems
inevitable.
A two revenue source strategy – revenue and subscriptions - is central to the company’s business
model. Equally, the capital requirements appear to be sustainably light. Furthermore, 2021Under-
grad will receive a “kick-start” from its relationship with ASM, which brings significant college
sports expertise into the offering, and from social media.
2021Undergrad looks to make a US$0.5m fundraising ahead of the 2020-21 academic year.
The company plans for this to be done at a US$2.0m pre-money valuation which gives the new
shareholders 20% of the overall business. We summarise key financial assumptions in this Resear-
ch Brief, which includes contact details on the back page. Financial highlights are summarised in
the box below.
Key financials
All figures in US$m 2020 2021 2022
Revenue from Advertising & Subscriptions 0,4 1,4 2,6
EBITDA 0,1 0,7 1,2
EBITDA margin (%) 35,0% 47,0% 47,0%
Net income - 0,7 1,2
Source: Company Data
Please refer to the important disclosures
shown on the back page and note that post
MiFID this information is categorised as
Marketing Material. www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
EDUCATING THE CLASS OF COVID19
This SGF Evergreen Research Brief puts forward the investment case for 2021Undergrad, whose
objective is provide advertising and information services for universities and university applicants
respectively.
The report highlights the scale of the current university problem – a combination of Covid19 high
quality streaming over the internet. We then cover the advertising market in more detail from a
university perspective before analysing subscribers’ needs.
Finally, we summarise the 2021Undergrad business model including its relationship with ASM. The
business is looking to do a US$0.5m fundraising round roughly coinciding with the start of the
2020/21 academic year – i.e. in 2020Q3.
UNIVERSITIES IN LIMBO
GOWN WITHOUT TOWN
The long-standing expression “town & gown,” which refers to the typically cellular, isolated and
occasionally conflicted nature of universities within their domicile towns arguably faces obsole-
scence if the current trend towards remote learning continues.
For universities themselves the disassociation between location and overall learning atmosphere –
not to mention best-in-class campus life – poses a problem of how to maintain their franchises as
leading brands. For example, does a Harvard course have the same appeal without the opportuni-
ty to row crew on the Charles River or sport crimson garments within the more elite student
residences of Cambridge, MA?
Whatever the answer, tangible on-campus experience, feel and location play an important
role in both school selection and university brand reputation. Separating the town from
the gown puts tertiary establishments under significant pressure, which targeted
advertising should play an important role in alleviating.
www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
INCREASING FURTHER EDUCATION’S APPEAL
With our without Covid19, America’s university system is under pressure to reinvent is appeal. US
student numbers increased from 14.9m to 20.3m between 1999 and 2009, a brisk 3.2% compound
growth rate. However, there was a contraction down to 19.7m in the subsequent decade. And the
number is only expected to recover to 20.1m by 2029.
Whether it is the perceived economic benefits of further education in entirety or the ability to
secure salary enhancing qualifications and skills elsewhere, there is a clear case that universities
need to purvey a stronger message. 2021Undergrad is capable of filling that role.
ADVERTISING
2021Undergrad will deliver compliant, cost-effective and targeted advertising messages for US and
international universities which wish to communicate directly with potential students and their
parents. The company prides itself on its ability to offer faculty-by-faculty information to its
subscribers.
Growth in university advertising expenditure is expected to be prolific. According to Forbes foreca-
sts for the US it is expected to growth from US$2.1bn in 2018 to over US$4.3bn by 2023. The global
market may well increase to above US$6bn. We note that non-US spend is currently US$2.2bn
with UK and Australia representing US$0.9bn of that.
www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
MAINSTREAM ADVERTISING
2021Undergrad is an inherently compliant and ethical method of communicating universities’
messages. Its keyhole approach to faculties and courses, which highlights their specific merits,
avoids criticism levelled at universities for focusing heavily on campus experience rather than
specialist academic excellence. Beer pong reviews are not on the 2021UG agenda!
Advertising costs, while an important source of income for 2021Undergrad as a company, will be
significantly lower than major media such as TV networks or large circulation print. However, the
company does offer pan-American and international readership.
Furthermore, advertising through 2021Undergrad creates targeted messaging, especially to
students who are looking to rethink their choices in the current environment. The company aims
specifically to attract students to its website who wish to find strong online options or who favour
schools which allow students to attend both online and in person.
As a post Covid19 profile builder for American universities, 2021UG is perfectly placed.
SOCIAL MEDIA
2021Undergrad intends to build its own profile actively via social media. A number of key handles
have already been established across Facebook, Instagram and Twitter. Specific social media han-
dles owned by 2021Undergrad are summarised in Figure 1.
Figure 1 – 2021Undergrad - Key Social Media and Internet Handles
Facebook Business Pages Instagram Twitter
2020Undergrad @2020Undergrad @2020Undergrad
2021Undergrad @2021Undergrad @2021Undergrad
2020GapYear @2020GapYear
Source: Company Data
www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
SUBSCRIPTION
2021Undergrad’s subscription service will be of massive value to parents and prospective students
as schools’ online offerings and associated course benefits become a significantly more important
part of the selection process. There is great potential for the big universities with effectively strong
“brands” to be outmanoeuvred by what will effectively be “challenger” colleges.
Those who subscribe will arguably make better, more agile, more modern choices than those who
do not. And poor choices in academic selection can have long-lasting negative impact on gradua-
tes’ careers – especially in the case of drop-outs. The subscription offering helps avoid this.
Moreover it is not just in course selectin that applications will need to be agile. Hence, the
subscription service will alert upcoming freshers to key changes in university admission practice.
These include changing admssions policies and deadlines, tuition discounts and reimbursement
policies, transfer otpions and optimal degrees and majors fo the new post-Covid19 economic envi-
ronment.
In our view the subscription offering represents good value for its users’ money. For a monthly
US$59 fee, students and parents can utilize 2021Undergrad to receive daily updates based on their
choice of programmes, tuition requirements and the ability to transfer to an in-person programme
from one which is purely online. With tighter economic conditions on the horizon, it will be increa-
singly vital for future students to maximise the returns on their spending.
BEING GOOD SPORTS – BUILDING ON ASM RELATIONSHIP
2021Undergrad looks to partner exciting sports educator ASM in its quest to provide value added
services to universities and students alike. On campus or online, sports will continue to be a key
differentiator within the US’s tertiary education system and should provide GOL with important
routes to market on both the advertising and subscription sides of its business.
For example, ASM operating partner www.TopDrawerSoccer.com is the US’s
leading media authority in college, club and high school soccer, which
maintains America’s largest youth soccer database. Its membership is
among the largest sporting communities looking to place itself into
US tertiary education. ASM boasts equally high profiles across a
range of international sports including softball, volleyball
and wrestling.
It is estimated that the partnership with ASM will
put 2020Undergrad in touch with 400,000
potential college athletes.
www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
MANAGEMENT AND STRATEGY
2021Undergrad was founded by and will initially be spearheaded by Andreea Porcelli, who is
currently CEO of fast growing international investor relations and financial services company Swiss
Growth Forum. Her ability to grow and operate an international franchise and client base tends to
be confirmed by her work with SGF.
Moreover, her academic and education sector credentials are strong. Indeed, in 1994 as Andreea
Bensaia she was the author of a then definitive 300 page text on international university selection
“A Guide to International Schools.” (Zinn Communications, ISBN-10:0935016252). In 1997 she foun-
ded and sold the world’s first website devoted to Study Abroad (www.whereintheworldshouldistu-
dy.org) and remained in educational consulting throughout her investment banking career.
2021Undergrad’s central business strategy is to co-develop its advertising and subscriber channels
and revenue streams. It will do this initially in the US but increasingly aim to be an international
service provider, which is in keeping with the founder’s background and the success of SGF.
FINANCIALS
The 2021Undergrad business model is that of a capital light online consultancy. However, the com-
pany does require initial funding both for website development and broader marketing. The initial
raise will be US$0.5m with a pre-money valuation of US$2.0m.
www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
Given the size of addressable market, potential for a step change in how university courses are
structured and the potentially disruptive nature of the 2021Undergrad franchise, expectations of
rapid sales growth are arguably justified. Management’s current view is that growth will be expo-
nential in 2021 and remain brisk in 2022.
With a tight control on administrative costs, margins in the business are expected to be high despi-
te the need for the company to market itself heavily in the early years. Company guidance is for
just under 50.0% EBITDA margins in all three of its initial operating years.
Company guidance is for just under 50.0% EBITDA margins in all three of its initial operating years.
We summarise forecasts, which are based on company guidance, in Figure 2.
Figure 2 – 2020Undergrad – Income Statement Forecasts
All figures in US$m 2020 2021 2022
Revenue from Advertising & Subscriptions 0,4 1,4 2,6
Revenue growth (%) 85,7%
EBITDA 0,1 0,7 1,2
EBITDA margin (%) 35,0% 47,0% 47,0%
Net income - 0,7 1,2
Source: Company Data
USEFUL LINKS
2021Undergrad Home Page
www.2021Undergrad.com
The CNN View
www.cnn.com/2020/07/07/perspectives/higher-education-pandemic/index
www.swissgrowthforum.ioEVERGREEN RESEARCH BRIEF
2021UNDERGRAD
EDUCATING THE CLASS
OF COVID19
19th AUGUST 2020
CONTACTS
Andreea Porcelli
andreea@swissgrowthforum.io
Christine Moon
christine@swissgrowthforum.io
Doug Davis
ddavis@swissgrowthforum.io
Research Consultant – Chris Wickham
research@swissgrowthforum.io
DISCLAIMER
DO NOT BASE ANY INVESTMENT DECISION UPON ANY INFORMATION OR OPINIONS FOUND IN THIS REPORT. We are not registered as a
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overseas securities regulatory authority. We are neither licensed nor qualified to provide investment advice. We have paid to write this report.
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particular company or industry. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no
representation, expressed or implied, has been made to us as to the accuracy, completeness or correctness of such information. You alone
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