By Vijay Tirathrai, Managing Director of the Techstars Hub71 Accelerator
Academic institutions today are adapting to the reality of online education and it is paving the way for digital capabilities. Over the past year the pandemic dramatically accelerated the use of various technologies. Blockchain is one in particular.
Educhain helps academic institutions issue blockchain-secured verifiable digital records, supporting academic institutions issuing to hundreds of thousands of learners. Founded in 2017 by Mark Balovnev and Marek Termanowski, the Canadian startup took part in the Techstars Hub71 Accelerator in 2020 and recently sold their company to a Private Equity firm.
When I moved from Washington D.C to Dubai in 2017, I had to get a whole slew of paperwork in order to apply for a work permit. One thing that caused angst was obtaining an original diploma from my university in the United Kingdom and then getting attested by the Accreditation Board in the United States. It took me four months, 36 emails, lots of fees and back and forth couriers to obtain this. Luckily, I finally got my work visa for Dubai at the risk of overstaying in a country illegally. This is an unnecessary nightmare that many expatriates face around the world.
I met with Mark Balovnev, CEO of Educhain, in Dubai, where he spoke passionately about Educhain enabling issuance, sharing, and verification of blockchain-secured digital credentials. I was totally sold on the idea as an absolute no-brainer. Mark and Marek have been working on the product since 2017, when blockchain was only just emerging as a new technology that could transform business, beyond cryptocurrencies.
“As Educhain gained traction and a growing user base, we knew this was the future of education, but had to take it to the next level of growth, with a competitive business model and sales approach that could scale and reach global markets.” Mark elaborates. “We needed the support of a global network and launchpad to accelerate our business, and get access and mentorship. Having convinced Vijay, Techstars became our biggest investor and supporter that truly believed in us and backed us all the way.”
Marek adds, “Joining Techstars gave us even more than we envisioned. We got access to a huge knowledge base, a wealth of perks, and the incredible Techstars network and community. Together with Vijay and our mentors, we were able to exponentially advance our product development, refine our strategy, iterate on the business model, and the go-to-market approach, which were game-changers for us.”
No one forecasted the impact of the COVID-19 pandemic. When it came to Demo Day in April 2020, whilst the whole world was in lockdown, Educhain was well prepared. Mark says, “Thanks to the introductions and access to the Techstars and Hub71 Networks, the response we had from Demo Day was overwhelmingly positive. The demo day pitch resonated with viewers who felt that education was long overdue for transformation, and that there was a big shift coming.”
And a big shift did materialize. By mid 2020 as academic institutions around the world were forced to shift to remote learning and work (with some countries even going as far as mandating all academic institutions to go fully paperless), Educhain was already well positioned to support them in their efforts. As COVID-19 put extreme pressure on all institutions to ensure continuity of education, they had to pivot completely to digital, and Educhain was there to help them serve learners safely and securely as they went fully online.
Throughout, Educhain had a lot of inbound inquiries for business development and investment opportunities. Whilst Mark was back in Vancouver, Educhain’s technology and successes post-Techstars caught the attention of a Canadian Private Equity (PE) firm. They were very impressed by Educhain’s business model, capabilities, and potential.
“We quickly developed a strong rapport with the partners at the PE firm, talking about our shared experiences and vision for the education sector. It was more like building a friendship than anything else.” Mark continues, “We were also impressed by their expertise and track record in scaling high-growth technology companies within the education sector and beyond.”
I probed Mark further as to why exit now, 12 months after demo day, when Educhain has so much potential to grow with further rounds of funding. To this he says, “The Private Equity firm really has the capacity to take the business to the next level, given their considerable capital, synergies with portfolio companies, network, and expertise, backed by a strong track record and intimate knowledge of the future of education. I believe the acquisition of Educhain will accelerate the development of new offerings for our customers, integrations with new partners, and expansion to new markets. We knew it was time for Educhain’s next stage of growth and so scaling by acquisition rather than organic growth made sense.”
Educhain has seen exponential growth in the last year and it certainly makes founders contemplate if this is the right time to exit. “Having worked with so many remarkable people and customers throughout our journey, it feels incredibly rewarding to have everything come together so well in this transaction,” said Marek, just days after signing the paperwork for the deal. “As everyone has invested so much emotion and effort into the company, it was really important for us to have a close relationship and confidence in our new partners. I’m really excited about our shared vision for the education space and helping academic institutions adapt and transform.”
Mark and Marek will continue to work at Educhain as strategic advisors, before their next adventure. A proud moment for these two founders.
Vijay Tirathrai is a serial entrepreneur, early stage investor and has served as a leader of notable global organizations. He has made a lifelong mission to help other entrepreneurs to succeed through compassion, thought leadership and networks. Vijay is currently the Managing Director of the Techstars Hub71 Accelerator based in the Middle East.