On Learning My Lesson and Getting on an EdTech Rocketship

tl;dr 500 Startups Vietnam (500VN) portfolio company ApplyBoard announced the close of a > US$200M Series D financing from OTPP, Fidelity Investments, and others.

Many people have asked me why a Vietnam-focused fund would make a seed investment in a Canada-based startup. It's a fair question, and one I would have also asked myself 15 years ago. But the answer is obvious to me now. Read on to learn what I learned.

15+ years ago on a snowy December morning in Boston, I met up with a Vietnamese guy named Khoa over coffee.?The same age as me, he had reached out seeking my advice as he aimed to fundraise for his new nonprofit helping Vietnamese high school students lean about higher education in the U.S.?I helped him how I could, but I must admit that I was skeptical about the need for such a nonprofit and its potential to scale.?It may have been justified by contemporaneous data: worldwide there were fewer than 20,000 study abroad students from Vietnam, and that nonprofit’s first conference ultimately had fewer than 100 participants.?But the skepticism overlooked the unstoppable demand for Vietnamese to get a better education.?By 2017, Vietnam’s study-abroad population grew +400% to nearly 100,000 students.?Khoa’s nonprofit -- VietAbroader -- not only survived, but thrived, helping tens of thousands of Vietnamese pursue a global future.?And Khoa parlayed his VietAbroader experience to launch a successful PE-backed education business.

So by the time I heard about ApplyBoard in 2017, I needed little convincing.?Its mission: to empower students around the world to access the best education available, using technology to streamline the application process, from discovery and application to enrollment. (1) This time the market opportunity was obvious to me.?We estimated that the annual revenue potential for ApplyBoard was $1B in the U.S. alone, let alone other markets and ancillary revenue opportunities. (2) The lead founder, Martin Basiri, was a force of nature.?He has a knack for seeing the big picture.?His positive energy is infectious.?He’s humble and generous.?He was already entrepreneurial, having developed and sold a number of patents in his early 20s. (3) We liked that there was a clear social impact, for both talented emerging markets students (including Vietnam!) and for budget-pressured higher education institutions.

ApplyBoard was one of the first five investments I led for 500VN and one of our fastest investments from intake to close.??And when more allocation unexpectedly opened up two months later, we snapped that up too.

By the following year as ApplyBoard continued to grow, I felt fortunate for us to have gotten on something special.?But their story could have gone the other way back in the early days.?By Martin’s telling in a mid-2020 fireside chat [edited for brevity/clarity]:

"We started the company in May 2015.?We raised $900,000 and grew to 20 people, but by the end of 2016, we were down to less than $200,000, almost bankrupt.?We had cash flow issues because we didn’t receive revenue until students actually matriculated.?We had to reduce headcount to 12 people.?And I couldn’t raise capital because my English was not very good.?I had one investor who said, “Oh, come to China.?We’ll fund you.”?So I went to China with the hope of raising money there.?But soon after the government reduced money flows out of China.?So a couple of months later I had to come back.?Until June 2017, we were struggling.?And then, you know, we raised from 500 and others.?And then revenue started coming."

Besides money, we provided help here and there.?For example, in the same fireside chat, in response to a question on how to get value out of investors, Martin shared: "The first thing is good talent. Reach out and say, 'Guys, I need someone.'?For example, [500VN] helped me to find my first employee in Vietnam, and the person is amazing." We introduced several other job candidates to them as well.?We also did one-offs such as helping get Wall Street Journal coverage of their next fundraising round, connecting them with several top-tier U.S. investors, etc.

Me, Martin (co-founder & CEO), Josh (finance director), and then 500VN associate Hau Ly getting dinner in Ho Chi Minh City, Vietnam, October 2017

But of course that’s all tiny compared to the amazing work that the ApplyBoard team has done over the years, such as building out a team of ~1,000 employees, expanding to the UK and Australia, developing partnerships with 1500+ universities & other schools worldwide, and launching tech tools like their automated admissions document verification.?Through efforts like these, the company has been able to help students around the world access quality higher-education, from major markets like China, India, and Vietnam as well as frontier markets as tough as South Sudan.

So I’m delighted to share that ApplyBoard raised their Series D, led by OTPP. I’m asked from time to time if 500VN would sell its shares.?Each time, we decline.?There’s still so much more to be done for international education, and I’m excited to see what ApplyBoard does next.

P.S. I’m grateful to ApplyBoard’s founders -- Martin, Meti, and Massi -- for bringing us along for the ride, to Neha Khera (now Toronto-based partner at North American pre-seed firm 2048 Ventures) who told me to take a look in the first place, to colleagues Alvin Bui (who helped us see the deal through) and Hau Ly (who was the one who identified the Vietnam job candidate).