Dr Jamie Beaton's Crimson claims unicorn status with billion-dollar valuation

26/10/20225 minute read
Dr Jamie Beaton's Crimson claims unicorn status with billion-dollar valuation

The Origins of Crimson Education

Alongside fellow teens Fangzhou Jiang and Sandre Kushor, Dr Jamie Beaton founded Crimson in 2013.  He emerged as an almost fully-formed tycoon aged just 20. He leveraged his own educational accomplishments - acceptance into the 25 of the world’s top universities, aged 17 and electing to study at Harvard - into a job with the late and legendary investor Julian Robertson, and then bent ears and wallets of his billionaire employers into backing a startup business based out of a dorm room in Boston.

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Originally named Crimson Consulting, later morphing into Crimson Education with a pre-pandemic tilt into online secondary education, the business has since proceeded to raise and deploy more than $100m in capital, buying up extra-school tutoring services domestically and then internationally as the scale of his ambitions became apparent.

Skepticism about the company, largely over its unashamed focus on elite education and the closed-book nature of private company accounts, has persisted but in the eight years since its founding, Crimson is fast becoming too big to dismiss or ignore.

The billion-dollar valuation

A recent $19m capital raise led by New Zealand venture capital fund Icehouse - which tipped on $10m - values the company at US$550m. Combined with the recently strengthened greenback, Crimson’s valuation may just have nudged a billion in New Zealand dollars and seen it crowned New Zealand’s next “unicorn” - as billion-dollar growth companies are often called.

This sort of valuation would make Beaton - who has happily seen his shareholding shrink to 26.5% as the capital raises stacked up - worth $265m.

Icehouse was one of the 1st outside investors in Crimson, tipping in $100,000, after a 2014 pitch from the braces-wearing Beaton where he interned earlier in that year. Icehouse has since kept tipping in money during each capital raise, and its stake in Crimson is now worth $60m.

Crimson’s growth

Icehouses’ now CEO Robbie Paul initially backed the jockey over the horse - he characterized the almost one-man-band Crimson as “just a consulting business” - but says Icehouse’s backing has now morphed into “very, very high conviction based on not isolated datasets, but consistent patterns of performance” based on the length of the relationship and insider details of results over the past eight years.

Crimson’s annual revenue topped $100m for the first time when it reached $110m for the year to July after having grown at around 65% during each of the two previous years. It is likely on the precipice, given the substantial foreign ownership, of having to file audited annual accounts to the Companies Office and is said to employ 600 people full-time around the globe.

The evolution of this business from being a luxury accessory for Auckland private secondary school parents into a genuinely mid-sized global education services provider was seen from the inside by Paul, who was as surprised as anyone by its trajectory.

It went from just a capable guy with a unique perspective on education, certainly with his credentials, to a roll-up strategy. And he [Jamie] seemed pretty good at that,” he says.

“And then the next round happens. And it’s like ‘Wait a second, you’re a technology company? How many developers have you hired?’ and basically becoming in many ways the tech intermediary, like the Uber for education.

He says the next expansion of horizons came with Dr Beaton’s 2019 announcement that he planned to move into secondary schooling with an online offering - Crimson Global Academy (CGA), which now accounts for 20% of group revenue.

College counseling is still the largest contributor to group income, and is now well-established as an export earner.

These days more than 95% of our college counseling revenue is outside of New Zealand,” Beaton says, pointing to China, Korea, Singapore and the United States as key markets.

“But no one market is more than 10% of revenue, and I’ve been very intentional about pushing globally.

What Dr Jamie Beaton says

Beaton for his part, has walked his own talk and while building Crimson has juggled a beyond-full-time course load. He is mid-way through his seventh degree - including a PhD form Oxford on a Rhodes scholarship - a Juris Doctor from Yale Law School. “Over the years, I developed some curiosity in law. So I thought I would master the art myself, or at least not master, but get some exposure,” Beaton says of his law studies.

Reflecting on his long relationship with the recently-departed Julian Robertson, who even after his death is recorded as the second-largest shareholder in Crimson, Beaton rates the hedge fund manager as the most formative figure in his life, aside from his mother who raised him as sole carer.

I had no perspective on what the wide world entailed; I didn’t know what Wall Street was; I didn’t know what entrepreneurship was. And he took me under his wing.” Beaton says of the billionaire Tiger Management founder.

“I’ll always be thankful for that incredible role he played in my life, it was truly transformational and is the kind of thing I’ll be grateful for all the days I’m on this earth, basically.

Robertson’s passing will pose no issues for Crimson, Beaton says, noting that his son Alex was also an early investor and remains a mentor.

With Crimson carrying no debt, having fueled its growth so far solely from capital raises, Beaton is comfortable with his creation being called a unicorn.

“At this stage, I think we are”, he says.

**As seen in the article published in *NZ Herald