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Cluey Ltd

Cluey is an online tutoring and learning service that delivers a personalised, face-to-face online tutoring experience for students in Years 2-12, across Maths, English and Chemistry.

Cluey supports students in order to improve their academic performance throughout their schooling by makeing learning support accessible and convenient so that tutoring can be booked at a time that suits each child’s schedule. Learning sessions take place live and online via our learning platform, which means students can log in from the comfort of home and work with their expert tutor without interrupting the family schedule.

All of Cluey’s content is mapped to the Australian National Curriculum and is based on the unique learning needs of each individual. In this way, Cluey programs cover the topics each student is learning in class and specifically address each child’s challenges. All sessions are recorded and can be re-watched for future reference, and parents can see what their child has learned.

Thanks to the online nature of Cluey’s approach, Cluey has sourced and trained the best tutors from around Australia and made them available to any student, regardless of whether they live on a farm, in a big city, or small country town.

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IPO Listing Information

Exchange - ASX
ASX Stock Code: CLU
Issue Type
Ordinary Shares
Market Cap Max
$143.5 Million
Shares On Offer
25.1 Million
IPO Offer Price
$1.20
Expression of Interest
Closes 14th November 2020
Min Raise
$30,000,000
Max Raise
$30,000,000
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Issuer Cluey Ltd (ACN 644 675 909) (“Cluey” or the “Company”)
Offer Type Initial Public Offering (IPO)
Joint Lead Managers and Underwriters Bell Potter Securities Limited (“Bell Potter”) and Canaccord Genuity (Australia) Limited (“Canaccord”) (the “JLMs”)
Offer Price A$1.20 per Share
Total proceeds from the Offer A$30.0 million
Total number of New Shares offered under the Offer 25.1 million
Total number of Shares held by Existing Shareholders *1 94.5 million
Total number of Shares on issue on Completion of the Offer 119.6 million
Market Capitalisation *2 A$143.5 million at the Offer Price
Pro forma net cash on Completion of the Offer A$42.9 million
Enterprise Value *3 A$100.7 million
Enterprise Value/FY21 forecast revenue, 6.5x
Expected ASX Code CLU.ASX
Notes:
*1. Shares held by Existing Shareholders will be subject to voluntary and mandatory escrow arrangements as described in Section 9.6 of the Pathfinder Prospectus.
*2. Market capitalisation at the Offer Price is defined as the Offer Price multiplied by the total number of Shares at Completion of the Offer.
*3. Enterprise Value is equal to the market capitalisation of the Company less the expected net cash on Completion of the Offer. Figures rounded to 1 decimal place.

  Company Description

Who is Cluey?

Cluey is an education technology company, founded in Sydney, Australia in 2017. On Completion of the Offer, Cluey will become a Wholly Owned Subsidiary of the Company. Cluey provides personalised online tutoring and educational support to school students in Australia. Cluey's integrated technology platform offers students in Years 2-12 access to:

  • 1-to-1 or small group tutoring with a qualified tutor
  • an online, live and interactive learning environment
  • proprietary education content mapped to the Australian curriculum in each state, designed by an experienced education faculty
  • an adaptive learning platform which gathers a large quantity of learning data for each student to support their learning and ensure the quality of their learning experience
  • practice and revision between tutoring sessions
  • comprehensive feedback and reporting (including full recording of tutoring sessions).

Who are Cluey’s customers?

Cluey's customers are typically parents of school-aged children, although students are active participants in making the decision to purchase tutoring services (particularly in senior-secondary school years). Cluey's customers represent a broad demographic, largely reflecting the composition of the Australian population. Cluey's customers include a diverse spread by geography (e.g. Australian state), school type (e.g. Government, Independent or Catholic schools) and by school year. Cluey currently has over 5,200 active paying students as at September 2020.

How does Cluey generate revenue?

The Company generates revenue from the sale of online learning support programs that include tutoring. Most customers pay for their learning support programs on a weekly basis, with payment usually made by credit card seven days in advance.

What is the impact of COVID-19 on Cluey?

The closure and disruption to school-based education during COVID-19 has generally resulted in an increase in demand for Cluey’s online tutoring services. During April and May 2020, Cluey experienced some negative enrolment trends due to the cancellation of NAPLAN tests across Australia for 2020, however this was more than offset by the increased demand of parents and students actively seeking learning support. Subsequent to May 2020, Cluey continues to experience strong demand for its online tutoring services. Cluey has also indirectly benefited from many of its competitors in the tutoring industry being required to close or operate at reduced capacity to comply with social distancing requirements. Operationally, as a digital business, Cluey’s staff and operations moved effectively to a remote working environment. Most of Cluey’s permanent staff continue to work remotely.

What is Cluey’s growth strategy?

Cluey's growth strategy is focussed on continuing its current growth trajectory, particularly in building growth in student enrolments through its existing digital marketing strategy. Key elements of Cluey's growth strategy are summarised below:

  • Increase market penetration. Cluey is focused on growing its student base, extending student retention and increasing efficiencies and automation within its operations.
  • Product innovation. Further development and identification of additional academic subjects and service formats.
  • Marketing partnerships. Active discussions with other student acquisition channels including government education departments, schools or complementary organisations.
  • International expansion. Future expansion into other countries with similar school curricula to Australia (e.g. UK, Canada, Singapore, South Africa, Middle East).
  • Acquisition opportunities. Potential acquisition opportunities which complement Cluey's business operations and coverage of outside-of-school education support.

  Key Strengths

Significant and growing addressable market

Education intelligence consultancy, HolonIQ, expects the global Education Technology (‘EdTech’) market to reach $404 billion by 2025, representing a 16.3% CAGR between 2019 to 2025 or a growth of 2.5x. At this level, EdTech is expected to represent approximately 5% of the broader $7.3 trillion global education market by 2025. In addition to EdTech’s primary role supporting the formal education sector, B2C EdTech models are on the rise as students, parents and workers increasingly seek learning support and up-skilling for supplemental and/or more direct academic and career outcomes. In a survey conducted by Cluey, Cluey found that ~90% of all Australian school students seek academic support outside the school classroom, which would represent approximately 3.7 million students.

Industry leading platform

Cluey's technology capabilities have been developed to support consistently high quality, targeted learning at scale and include purpose-built learning platforms, customer support systems and an end-to-end student management system. Features on Cluey’s platform include:

  • live synchronous video, audio and text-based chat
  • fully integrated learning programs and content
  • fully transparent collaborative workspaces and content tools
  • session guidance and recommendations, including learning goals and reflection
  • full integration with practice content and activities accessible at any time
  • pre-session preparation
  • post-session feedback and reporting
  • internet browser-based for easy access

Scalable business model

Cluey’s scalable, cloud-based technology platform is fundamental to its growth with its functionality allowing for streamlined job workflow and the ability to capture live data points. The platform uses artificial intelligence and machine learning to analyse the captured data in order to improve the learning and overall experience for students and parents. All learning with Cluey is intended to provide high quality learning services enabled by purpose-built, scalable learning infrastructure. Cluey’s platform is cloud-based and was developed using a combination of proprietary, internally developed software and technologies and third-party software. Since inception, Cluey’s technology platforms have been built with a scalable approach to:

  • teaching and learning;
  • customer acquisition;
  • customer support;
  • tutor selection, quality assurance and support; and
  • the use of data.

Strong revenue growth and consistent margins

Cluey has demonstrated strong revenue growth since its inception in July 2017. Revenue increased from $0.9m in FY2019 to $4.9m in FY2020, representing an increase of 441%. Cluey’s gross profit margins have also been consistently improving, from 33% in FY2019 to 48% in FY2020. Cluey is forecasting a further 218% growth in revenue in FY2021F.

Experienced Board, management and personnel

The Company has assembled:
  • an experienced Board with relevant industry and listed company experience as well as a diverse skill set and proven track record of building businesses and a desire to promote strong corporate governance; and
  • a multidisciplinary team of management and employees with high technical expertise.

  Financials

What is the financial performance of Cluey before and after the Offer?

- - - - Pro Forma Consolidated Historical Pro Forma Consolidated Forcast Satutory Consolidated Forecast
$'000s Notes FY2018 FY2019 FY2020 FY2021F FY2021F
Revenue 1 3 901 4,879 15,475 15,475
Cost of Sales 2 (34) (608) (2,540) (7,153) (7,173)
Gross Profit - (30) 293 2,330 8,322 8,322
Marketing Expenses 3 (310) (2,141) (4,427) (6,622) (6,622)
Occuppancy Expenses 4 (117) (313) (350) (336) (336)
Administration Expenses 5 (1,983) (2,018) (3,079) (3,244) (2,902)
Employee benefit Expenses 6 (3,557) (7, 791) (11,003) (13,314) (13,531)
Loss on revaluation of financial instrument 7 - - - - (16,392)
Capital raising transaction cost 8 - - - - (1,951)
Operating Expenses 8 (5,966) (12,262) (18,860) (23,517) (41,734)
Operating Profit(loss) (5,997) (11,969) (16,531) (15,194) (33,412)
Interest Expenses - - - - - -
Disposal of Assets - - - - - -
Other Income 9 10 328 455 426 476
Other Income(expenses) 10 328 455 426 476
Profit/(loss) before tax (5,987) (11,641) (16,075) (14,768) (32,936)
Income tax Expenses - - - - - -
Net Profit/(loss) after tax (5,987) (11,641) (16,075) (14,768) (32,936)
Total comprehensive income (5,987) (11,641) (16,075) (14,768) (32,936)

   Use of funds

What is the proposed use of funds raised under the Offer?

Source of funds $M %
Offer Proceeds 30.0 100%
- - -
- - -
- - -
Total Source of Funds 30.0 100%
Use of funds $M %
Sales & Marketing1 10.9 36.3%
Product, Customer Care, Education & Technology2 5.8 19.5%
Expenses associated with IPOs3 3.4 11.3%
Working Capital4 9.9 32.9%
Total Use of Funds 30.0 100%
  1. Sales & marketng refers to cost related to acquiring new students and comprises of marketing expenses( media spend and affiliate commissions ), marketing employee salaries, learning advisors ( slaes personnel) salaries and commissions.
  2. Product, customer care, education & technology refers to costs related to the salaries of the customer care and support, operations, product development, education and technology teams, as well as software and hosting costs paid to third-party providers.
  3. Expenses associated with the IPO are exclusive of GST amounts payable
  4. Working capital is the capital required to fund day-to-day operating (for example payment of salaries, rent and other operational expenses) The more significant areas of expenditure in respect to working capital have been separately identified, being sales & marketing, and product, customer care, education d technology Cluey wil likely use the remainder of the capital to fund its growth objectives especially for additional customer acquisition and other general cash requirements.

  Ownership & Escrow

Pro Forma Ownership and Voluntary Escrow

Who are the Existing Shareholders and what will their interest in the Company be at Completion of the Offer?

Shares held at the
prospectus date 		Shares held on completion of the offer
Holder Shares(m) Shares(%) Shares Shares(%)
Founderds1,2 36.5 38.6% 36.5 30.5%
Intitutional Share-holder 33.4 35.4% 33.4 28.0%
Other Existing Share-holders (excluding Founders and Institutional Shareholders) 24.6 26.0% 24.6 20.6%
New Shareholders3 - - 25.1 21%
Total 94.5 100.0% 119.6 100.0%
 
  1. Founders are Robert Gavshon, Mark Rohald, Sam Linz and Greg Fordred.
  2. On a fully diluted basis, including the number of Shares represented by employee options and Convertible Notes on a notional as-converted basis. Options and Convertible Notes will not be converted into Shares until shortly prior to settlement of the IPO. This information assumes that the Shares that will be issued to these holders on Completion(i.e issues in exchange of their current securities holdings in Quartet Education) were issued on Prospectus Date.
  3. Includes any new Shares to be issued under the Employee Gift Offer
 

Will any Shares be subject to restrictions on disposal following Completion of the Offer?

Total Number of Shares held on completion of the Offer Total number of Shares subject to voluntary escrow Voluntary escrowed Shares as a percentage of total issues Shares Total number of Shares estimated to be subject to mandatory escrow Estimated mandatory escrowed Shares as a percentage of total issued Shares1 Estimated Shares as a percentage of total issued Shares subject to escrow1
Founderds2,3 36.5 million 11.0 million 30.2% 25.4 million 69.8% 100.0%
Institutional Shareholders 33.4 million 15.4 million 46.0% 11.4 million 34.0% 80.0%
Other Existing Shareholders 24.6 million 7.9 million 32.2% 4.7 million 19.3% 51.5%
Total 94.5 million 34.3 million 36.3% 41.5 million 44.0% 80.3%
 
  1. Total % may not equal 100% due to minor rounding difference.
  2. Founders are Robert Gavshon, Mark Rohald, Sam Liz, Greg Fordred
  3. On a fully diluted basis, including the number of Shares represented by employee options and Convertible Notes on a notional as-converted basis. Options and Convertible Notes will not be converted into Shares until shortly prior to settlement of the IPO. This information assumes that the Shares that will be issued to these holders on Completion(i.e issues in exchange of their current securities holdings in Quartet Education) were issued on Prospectus Date.

  Management Team

Mark Rohald

Co-Founder, Chief Executive Officer & Executive Director

Mark co-founded Cluey in 2017, following a 30-year career in private education and training in the UK, South Africa, Canada and Australia. He has founded a number of private and publicly listed education and EdTech companies. He has served as a Board member of more than 30 education organisations across the K-12, Vocational and Higher Education segments. Previously, Mark was the co-founder and Director of Educor, one of the largest private education companies in the world, listed on the JSE and NASDAQ. Mark was the co-founder and Joint CEO of the Think Education Group – one of Australia’s leading providers of campus-based vocational and higher education. In 2010, Mark co-founded the Open Colleges Group which developed into the largest private provider of online learning in Australia. Mark holds Bachelor of Commerce and Bachelor of Commerce with Honours (Economics) degrees.

Greg Fordred

Co-Founder & Chief Financial Offer

Greg is a co-founding Executive and Chief Financial Officer of Cluey. Greg has over 20 years’ experience in executive and senior finance positions with companies in the Financial Services and Education sectors. In the last 15 years, Greg held CFO/Company Secretary positions at Open Colleges, Think Education Group and Kaplan Australia. Greg played an instrumental role in the corporate development and growth of these organisations, creating significant shareholder value, whilst ensuring high standards of governance. Greg is a Chartered Accountant and Chartered Secretary. He holds a Bachelor of Business and several post-graduate qualifications in Company Secretarial Practice and Governance of ASX Listed Entities.

Michael Allara

Chief Product Officer

Michael has 20 years' experience in digital product and strategy domains across several industries undergoing major transformation, in both Australia and the UK. He has worked in product and strategy roles in the video game (Sony Computer Entertainment Europe), digital media (NineMSN), and education (Open Colleges, Cluey) industries, as well as through professional services engagements with PricewaterhouseCoopers and Oakton. Michael holds a Bachelor of Commerce from the University of New South Wales.

Trevor McDougall

Chief Operating Officer

Trevor has over 10 years’ experience in senior leadership positions with a focus on scaling technology and operations. Previously, Trevor held the position of CIO at Open Colleges and Think Education Group. Trevor has global experience across entertainment, supply chain, operations and education, working for businesses including Sony & IDP. Trevor has led the development and execution of digital product strategies in high growth environments and has run commercial operations. Trevor holds a Bachelor of Commerce from Macquarie University and an MBA from MGSM.

Matteo Trinca

Chief Customer Officer

Matteo has 15 years’ experience in customer intelligence and strategic marketing in the gaming and education sectors. Driven by a strong passion for decision science, he started his career in data and analytics, transitioning to revenue management roles, holding senior positions at William Hill Australia and Paddypower Plc (now Flutter Entertainment Plc). Originally from Italy, Matteo has lived, studied and worked in Spain, Ireland and Australia. Matteo holds double degrees in Industrial Engineering and an eMBA from INSEAD Business School.

Dr Selina Samuels

Chief Learning Officer

Selina has over 25 years’ experience in the education sector. She has been a university lecturer at the University of London and UNSW, Head of English at Ascham School in Sydney and held other senior education leadership roles. She has unique experience in developing new education enterprises. Selina designed and implemented a framework for an international network of schools that transformed pedagogy, physical and digital learning environments, and she worked with the Dalton Foundation in Hong Kong to develop a new kindergarten and primary school. Selina holds an Arts/Law degree with the University Medal, a Masters of Education and a PhD.

  Board of Directors

Robert Gavshon

Chairman and Non-Executive Director

Robert migrated to Australia from South Arica in 1978 where he was a partner in a large law firm. Shortly after arrival in Australia, he was appointed Group General Counsel and Director of Corporate Affairs with worldwide responsibility for a multinational corporation listed on the ASX. Robert later became a significant shareholder in and served as a director of public companies including Executive Deputy Chairman of Barbeques Galore Ltd, a Nasdaq listed company and Rebel Sport listed on the ASX. He has also been involved in several successful equity ventures where he took Board and advisory roles including Oporto, Hipages and The Optical Company. Robert has been engaged in the education sector for over two decades and was a shareholder in and Chairman of Think Education Group and Open Colleges until their sale. He has also occupied leading positions in the not-for-profit sector. In 2019 Robert was recognised as a Member of the Order of Australia (AM) for his services to education, business and community. He holds Bachelor of Commerce and Bachelor of Law degrees

Mark Rohald

Co-Founder, Chief Executive Officer & Executive Director

Mark co-founded Cluey in 2017, following a 30-year career in private education and training in the UK, South Africa, Canada and Australia. He has founded a number of private and publicly listed education and EdTech companies. He has served as a Board member of more than 30 education organisations across the K-12, Vocational and Higher Education segments. Previously, Mark was the co-founder and Director of Educor, one of the largest private education companies in the world, listed on the JSE and NASDAQ. Mark was the co-founder and Joint CEO of the Think Education Group – one of Australia’s leading providers of campus-based vocational and higher education. In 2010, Mark co-founded the Open Colleges Group which developed into the largest private provider of online learning in Australia. Mark holds Bachelor of Commerce and Bachelor of Commerce with Honours (Economics) degrees.

Professor Ian Young

Non-Executive Director

Ian has over 20 years’ experience in the higher education sector. He was previously the Chief Executive (Vice-Chancellor) of the Australian National University and Swinburne University of Technology and has also held several senior faculty and teaching positions across a range of tertiary institutions. Ian also has extensive experience with boards in the education, government and research sectors. He was previously the Chair of the Group of Eight universities, VERNet and Education Australia and has held board member positions at the Australian Research Council, IDP Education and Online Education Services. Ian holds a Bachelor of Engineering (Honours) in Civil Engineering, a Master of Engineering Science in Coastal Engineering and a PhD in Coastal Engineering Science. Ian is an independent Director as in the Board's view he is free from any business or other relationship that could materially interfere with or reasonably be perceived to materially interfere with the independent exercise of his judgement.

Michael Stibbard

Non-Executive Director

Michael has over 40 years’ experience in the accounting profession. He was an audit and business consulting partner with Horwath NSW Pty Limited, Chartered Accountants for 23 years and managing partner for 6 of those years. When the company merged with Deloitte in February 2007, he continued to act as an audit and business consulting partner until his retirement from the firm in September 2017. Since leaving Deloitte, Michael has continued to provide business advisory services. He holds a Bachelor of Commerce degree (UNSW). Michael is an independent Director as in the Board's view he is free from any business or other relationship that could materially interfere with or reasonably be perceived to materially interfere with the independent exercise of his judgement.

  Key Risks

Limited operating history and evolving digital offerings makes it difficult to evaluate future prospects

Cluey is an early stage education technology company with a limited trading history. Since its commencement in July 2017, Cluey’s activities have principally involved developing its technology and products, launching its services and building itsbrand. Given Cluey’s limited trading history, it is difficult to make an evaluation of Cluey’s business or its prospects and there is significant risk that Cluey is not able to continue its growth at the current rate or successfully execute on its business plans and strategies.

Cluey may be unable to scale its business and achieve profitability

The ability of the Group to increase revenue and achieve profitability is dependent on its ability to profitably scale Cluey’s business in its key markets. While Cluey has been successful in achieving a rapid level of growth in a relatively short period of time, there is no guarantee that Cluey will be able to achieve the same level of rapid growth in the future. The Group’s ability to profitably scale Cluey’s business in Australia and other markets is dependent on Cluey both expanding its existing customer and tutor bases and retaining existing and new customers for repeat use of Cluey’s services. Failure to expand in this way may materially and adversely impact the Group’s ability to increase revenue, achieve economies of scale, optimise its systems and expand its operations, any of which may have a negative impact on the Group’s profitability.

Loss of key management personnel

Cluey has to date relied on the collective skills and expertise of a limited number of top management executives. Retaining these key management personnel in their current positions is critical to the Group’s short- and medium-term success.

Customer acquisition, retention risk and competitive pricing

The Group’s growth depends on Cluey’s ability to attract new students to use its products and services and to increase the level of engagement by existing students with Cluey’s learning platform. Cluey may not succeed in attracting more students to its services or the use of its learning platform and if students do not increase their level of engagement with the platform, revenues may grow more slowly than expected or decline. If Cluey’s efforts to satisfy its existing student user base are not successful or become less effective, or if the cost of such efforts were to significantly increase, it may not be able to attract new students as successfully or efficiently as it has been able to in the past and, as a result, its, and therefore the Group’s, business, results of operations, and financial performance and condition would be adversely affected. Cluey may be unable to maintain and grow its student user base if it is unable to offer competitive prices for its products and services. If Cluey fails to expand its user base, its, and therefore the Group’s, business, results of operations, and financial performance and condition would be adversely affected.

History of losses and uncertainty on future profits

Quartet Education (the holding company of Cluey) and Cluey have reported significant net losses since their establishment in July 2017, and is expected to continue to experience net losses in the future. Net losses for FY2018, FY2019 and FY2020 were $5.2 million, $10.0 million, and $15.2 million, respectively. The Group expects to make ongoing investments in the development and expansion of Cluey’s business and investment in customer acquisition and operating expenses may increase. Cluey may not succeed in increasing revenues sufficiently to offset these higher expenses, and efforts to grow the business may prove more expensive than currently anticipated. Cluey may incur significant losses in the future including as a result of slowing demand for its products and services; increasing competition, particularly for online tutoring services; decreasing spending on education; and other risks described in the Pathfinder Prospectus.

Failure to effectively manage growth

The Group expects continued growth in Cluey’s business which could place significant strain on current management, operational and finance resources as well as the infrastructure supporting Cluey’s current services. Cluey’s and, therefore the Group’s, future success depends on its ability to effectively manage this growth. Failure to appropriately manage growth could be detrimental to Cluey’s reputation and to the services provided by Cluey. This could result in failure to retain existing customers and a failure to attract new customers, which could adversely affect the Group’s operating and financial performance.

Competition

The Group expects that existing competitors and new entrants to the outside-of-school K-12 education segment will constantly revise and improve their business models in response to challenges from competing businesses, including Cluey. If these or other market participants introduce new or improved delivery of online K-12 education and technology-enabled services that Cluey cannot match or exceed in a timely or cost-effective manner, the Group’s business, financial condition and performance and profitability (if applicable) may be adversely affected.

Adoption of online tutoring may be slower than anticipated

Online delivery of tutoring services is a relatively new offering which is being increasingly adopted by customers in the broader tutoring market as an alternative to traditional offerings such as in-person tutoring and physical learning centres. If increased penetration and adoption of online tutoring services occurs at a slower rate than anticipated, Cluey may be unable to expand its user base and/or its business and the results of operations, and financial performance and condition of the Group could be adversely affected. Management believes that the COVID-19 pandemic has contributed to the accelerated adoption of online tutoring services in Australia. If the demand for online tutoring services reduces post the COVID-19 pandemic, Cluey’s rate of customer acquisition may slow which may adversely affect the Group’s operating and financial performance.

Cybersecurity and data protection

Cluey collects and holds a significant amount of personal information about its customers. Cluey’s systems, or those of its third-party service providers, may fail, or be subject to disruption as a result of external threats or system errors. Cyber-attacks could also compromise or breach the safeguards implemented by Cluey to maintain confidentiality of such information. Cluey has an IT Disaster Recovery Plan in place but is still in the process of completing and updating its Business Continuity Handbook which at present is incomplete. Cluey is also in the process of reviewing and updating other relevant procedures to ensure that it has appropriate, up-to-date and effective data security processes in place. Unauthorised access to, or breach or failure of, Cluey’s digital infrastructure due to cyber-attacks, negligence, human error or other third-party actions, could disrupt Cluey’s operations and result in the loss or misuse of data or sensitive information. Loss of such data may expose Cluey or any member of the Group to litigation, claims, fines and penalties as well as significant reputational damage, or result in a breach of Cluey’s obligations under applicable data protection laws or contractual agreements. These breaches may adversely affect the Group’s financial performance and could result in a loss of trust by Cluey’s customers, tutors and employees, each of which could adversely affect Cluey’s reputation and ability to maintain and attract existing and new customers, tutors and employees. In addition, laws relating to data privacy are evolving. If data privacy standards are adopted in Australia, or other markets the Group enters, which are more stringent than those which Cluey’s systems are currently designed to comply with, then this could lead to additional costs for compliance and negatively impact the Group’s financial condition and/or performance.

Cluey’s technology platforms, communications systems and hosting platforms may be disrupted, become redundant, cease to operate efficiently, or fail

Cluey is reliant on the performance, reliability and availability of its technology platforms, communications systems, servers, the internet, hosting services and the cloud-based environment in which it provides its services (whether provided in-house or sourced from third parties). There is a risk that these systems may be adversely affected by various factors such as damage, faulty or aging equipment, power surges or failures, computer viruses, or misuse by staff or contractors. Other factors such as hacking, denial of service attacks, or natural disasters may also adversely affect these systems and cause them to become unavailable. This could result in a reduction of Cluey’s ability to generate income, as well as adversely affecting its reputation. This could have a material adverse effect on Cluey’s, and therefore the Group’s, financial position and performance.

Other risks

A number of other key risks relating specifically to an investment in the Company and generally to an investment in the Shares are included in Section 5 of the Pathfinder Prospectus and listed below:

  • Execution of growth strategies during seasonal peak enrolment periods
  • Tutor selection, retention, quality control and tutor costs
  • Employment
  • Acquisitions, expansion or growth initiatives by Cluey may not be successful
  • Changes in curriculum and standardised testing
  • New products or expansion into new territories may not achieve intended outcomes
  • Need to attract and retain skilled staff in specialised roles and management personnel
  • Speed of innovation required
  • Reputation damage
  • Internet availability, cost and reliability
  • Changes in law and regulations
  • Failure to protect intellectual property rights

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