Lockdown’s great leap for digital startup
With zero March sales software company Kami was panicking, but kind act for schools amid Covid storm proved a marketing master-stroke, writes Chris Keall
Some New Zealand tech companies have been through downturns before, like the GFC. For earlier-stage outfits, it can be more a matter of gripping the side of your chair.
“Our new sales in March were zero. And we were a little bit scared. We were figuring out how long we could survive with no sales,” says Heng jie Wang, chief executive of Auckland-based education software company Kami.
“The impact of Covid was extreme.”
He actually means extremely good, in the end.
But first, let’s rewind.
Kami was, like all good startups, created to solve a real-life problem.
Its eponymous product was developed when Wang and cofounders Alliv Samson (today COO), and Jordan Thoms (CTO) were studying engineering at the University of Auckland and wanted a better solution for taking notes.
A couple of years later, in 2013, Kami was born (the word means paper in Japanese): a tool for sharing and annotating PDFs.
Two other successful Kiwi education software startups, LearnCoach and Education Perfect, have created whole lessons and a platform for sharing them.
Kami has grown more sophisticated over the years, but it has always remained devoted to sharing one item from a curriculum with a class, then letting them comment on it — a digital version of handing out a printout in a classroom. These days, a teacher can virtually check in on a document shared via the cloud-based Kami to keep tabs on a student’s progress.
Early adopters like Diocesan School in Auckland helped Kami grab around 75 per cent of the private school market. Wang relocated to San Francisco, the better to push Kami in North America.
By early 2019, more than 830 schools were using Kami in NZ, and
thousands in the US. All up, it had more than six million users in 130 countries — numbers that helped the start-up raise $1.5m in a seed round that valued it at $19m.
The round was led by Australia’s Right Click Capital, but with the
Crown-backed NZ Venture Investment Fund also kicking in.
In March this year, as lockdowns started to spread around the world, Kami saw a huge uptick in interest from South Korea. A surge of inquiries from Europe followed, then the US.
Kami is available in a free version, with basic features, plus a $99-peryear Teacher Plan that covers one teacher, up to 150 students, and includes frills like text-to-speech support and integration with the likes of Google Classroom and Google Drive.
When the calls for Covid help started coming in, Kami started giving away its premium version for free to teachers and schools.
“They just needed the fastest possible solution to go digital. And for us, we just wanted to do right by all these teachers and parents that, you know, were having to go through this massive struggle.”
It was a good deed, and an inadvertent master-stroke in terms of seeding the market.
When sales started to kick in again during April, they were at six times the level of 2019. “And May was insane,” Wang says, with sales around
10 times the same month last year. All up, Kami now has around 10 million users worldwide after gaining
5000 per day at its lockdown peak. Wang won’t reveal financials, but says the company is cash-flow positive.
Asked for a free vs paid split, the CEO says, “We’re approaching half of our users are paying for our upgrades, and the rest are either on a trial of the upgrades or on our basic free version.”
He’s hiring extra staff — aiming to jump from 30 to 50 as soon as possible — but says the growth can be funded organically. There are no plans for another raise.
Strong demand continues postlockdown, Wang says.
Like so many sectors, education is one that has made a great leap forward to digital during the pandemic. And there’s no going back.
We just wanted to do right by all these teachers and parents that, you know, were having to go through this massive struggle.
Kami founder Heng jie Wang, on the decision to give away Kami’s premium version for free to teachers and schools during lockdown