Podcast 55: From Derry kitchen table start-up to one of the world’s fastest growing players in online learning, Paul McElvaney talks about Learning Pool’s rapid growth trajectory.
In August last year Derry e-learning technology company Learning Pool reported annual revenues of £18.2m, up 32pc year-on-year, and on the heels of the acquisition of rival HT2 Labs earlier last year. Within months it repeated the feat by acquiring Colorado-based learning tech firm Remote Learner, accelerating its push into the North American learning management system (LMS) market.
This was the fourth acquisition by Learning Pool in recent years and by co-founder and CEO Paul McElvaney’s reckoning, the company has gotten very good at mergers and acquisitions (M&As).
“Dizzying is a good word to describe the growth over the last two years”
Learning Pool is a beacon for the quality of Northern Ireland’s tech scene and proof that innovation is alive and well in Ireland’s north-west.
“We set the business up at my kitchen table around an idea of using online learning to deliver value to some customers that we knew from some consulting work that we were doing.”
Why Derry? Why not Derry?
Established in 2006, Learning Pool comes from the same generation of companies as Twitter and Facebook, but unlike Silicon Valley or Harvard, the location was Derry, Northern Ireland.
The opportunity that McElvaney and Learning Pool’s co-founder Mary McKenna spotted was that organisations were struggling to shift their learning programmes online in a cost-effective way.
“We accidentally built a software as a service (SaaS) business. SaaS wasn’t a thing back in 2006. Well, at least, it wasn’t in Derry. We decided to build a business to solve a problem for a specific group of people and see where it goes.”
In the first year they had convinced their first 30 customers to sign up for what was the beginning of the subscription model that is commonplace for SaaS today. “If you use it I’ll come back and you can pay me again next year. And that was the basis of the revenue model we’ve been able to build on.”
So why Derry or why not Derry as a place to get started? “We just happened to be in Derry. We’re based in Nortern Ireland but strategically or otherwise we never had any ambition to sell to businesses in Northern Ireland, we were very much focused on mainland UK. But Derry was a reasonable place to get started and it’s become an essential part of the story. We quickly became a big fish in a small pond. Whenever I look back on the history of the business I’m not sure we would have survived or done as well without the Derry thing.”
McElvaney credits Learning Pool’s growth trajectory to the company’s people and doubts the company’s success would have been possible if they had tried as a start-up elsewhere like Dublin or London because of the talent wars of the past decade and the challenge of retaining good people.
Reflecting on the new talent landscape as the world emerges from the pandemic, he believes that once again the company’s location in the north-west as well as the reality that most talent will be drawn to remote working opportunities as well as a superior quality of life will serve LearningPool well. “It’s a different dynamic. And when you’re starting to bring up kids, there’s a lot to be said for it.”
Learning as they go
Learning Pool’s acquisitive growth strategy began with a private equity funding in 2016 led by the Carlisle Group. “Since then we have doubled the business and now we’re doubling it again. We did that through a combination of organic growth as well as bolt-on acquisitions.
“We’re enjoying coming to work every day and we have all the options in the world about how we go about growing the business. I have nothing to complain about”
“The next big pivot was HT2 deal. It was a relatively small company that had done two fairly special things: they had built a piece of technology that was representative of the next generation of tech the industry was looking for; and they had gone to the US.”
The HT2 acquisition has supercharged the Learning Pool tech stack with a learning experience platform called Stream, which McElvaney says is the future of the business and that is delivering a lot of traction already in the marketplace.
The acquisition of Remote Learner, which counts businesses like Indeed and Macy’s among its clients, also grows the tech stack and gives Learning Pool a beachhead in the US as well as a strong customer base.
“Dizzying is a good word to describe the growth over the last two years.”
With 30pc of revenues now coming from the US market and the tech stack pointed in the right direction, McElvaney admits he’s enjoying the ride. “The market is opening up. The pandemic has been very tough in terms of logistics and on certain sectors like hospitality, but it has marked a real shift to delivering online.”
In many ways the pandemic has also redrawn the boundaries of businesses and has had a seismic impact on the geography of business and for this new world training and learning will be crucial, particularly for sectors that have to grasp new ways of doing things.
“All of that translates into speed, consistency, cost, reliability and fundamentally behaviour change. It has driven a severe increase in the usage of our technology and content by customers.”
Learning Pool, McElvaney says, has been largely protected from the impacts of Brexit. “We are in Northern Ireland and the Northern Ireland Protocol gives businesses here the promise of the best of both. We’re in a very lucky spot.”
That said, because of the variety of businesses he works with, he is cognisant of the pressures businesses owners are under. “The impact on our customers is the thing that we are watching very carefully.”
He is also watching closely how Brexit will impact talent, particularly the UK’s attractiveness as a destination for talent.
Overall, he feels sorry for businesses across the UK that have been impacted by the execution of Brexit. “Businesses deserve better than this.”
With 260 people, of which 150 are Northern Ireland, scaling Learning Pool is McElvaney’s focus for the immediate future.
“The strategy is always to grow organically and make acquisitions where it helps us to do that faster.”
Following the Remote Learner acquisition Learning Pool restructured its management team. “I’ve taken on this new title as group CEO and that’s about allowing us to build out the management capability of the business and in all honesty to give people who have masses of potential a bigger chance. I think we will grow substantially this year.”
While the typical Learning Pool customer would have up to 20,000 users, McElvaney said that a recent deal will see its technology deployed to a workforce of close to 1m users. “We want to do more of that. We’re building out our sales capability. We’ve become very good at acquisitions, actually. Acquisitions are very tricky. The first one nearly killed me but after that we’ve gotten into a groove and we’ve got a process that’s great for the businesses we’ve acquired and the people who work in those businesses.
Looking to the future, McElvaney says it is about staying on the current trajectory.
“People always ask me what’s the future. Look, I’m 44, there’s a pandemic. We’re enjoying coming to work every day and we have all the options in the world about how we go about growing the business. I have nothing to complain about.”
By John Kennedy (email@example.com)
Published: 6 April 2021