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Xplor acquires NZ’s Discover, after $3.8b global merger
Xplor Technologies, the childcare tech start-up involved in the $3.8 billion merger with US payments giant Clearent last year, has bought New Zealand’s largest childcare centre platform and has plans to scoop up more.
Founded by defence force veteran and young rich lister Mark Woodland, Xplor’s brand and childcare administration software now forms the basis of the newly minted Xplor Technologies, which provides administrative software across childcare, health and fitness, boutique wellness, field services and personal verticals.
This week’s acquisition of fellow technology platform Discover adds more than 1500 childcare centre software contracts around New Zealand, bringing Xplor’s network to more than 8500 across Australia and New Zealand.
“Xplor’s mission has remained unchanged since we started over a decade ago to provide better access to, and equity of, early learning education for children everywhere,” said Mr Woodland, who now heads up the education vertical within Xplor Technologies.
“With the acquisition of Discover, we’ve edged ever closer to completing that mission.”
After 10 years of explosive growth and installation in more than half of Australia’s 14,000 childcare centres, Xplor caught the eye of New Zealand-based payments solutions provider Transaction Services Group.
TSG bought Xplor in January 2020 for an undisclosed amount and, after some corporate reshuffling by TSG’s parent, US-private equity giant Advent International, TSG merged with Clearent, a fellow portfolio company and payments business.
We now have this global vantage point from which to see how education is working across all different societies.
— Mark Woodland, Xplor founder
The new, merged entity was rebranded in June this year as Xplor Technologies and was valued at $3.8 billion.
“That whole deal started with us actually meeting with Advent International in 2019 and talking with them about their investment in QuickKids, which was this huge legacy-childcare system that they wanted to ultimately move to the cloud,” Mr Woodland said of the discussions that led to Xplor’s acquisition and Mr Woodland’s personal wealth ballooning from the $54 million slated in AFR’s previous Rich List analysis.
“We were this aggressively growing, venture-backed, cloud-based platform, and these guys wanted a way to bring their legacy system into the cloud and we wanted to go global.”
Xplor’s software originally underpinned an online platform for parents to interact with their children in real time during the day and where childcare centres and schools could manage their operations.
Using iBeacon technology, Xplor enabled parents to automatically sign their children in and out of a childcare centre or school through Bluetooth-enabled smartphones and track children at school when they headed to extracurricular activities such as sport or music lessons.
As head of the education vertical at Xplor Technologies, Mr Woodland sees the deal with TSG. and ultimately Advent. as a way to strip out inefficiencies in childcare and education and give time back to teachers at scale.
“We now have this global vantage point from which to see how education is working across all different societies,” he said.
COVID-19 has proved a sobering time for those involved in education, with visibility over the “haves” and “have nots” clearly demonstrated as schools and childcare centres closed and children were schooled remotely.
“The kinds of decisions families needed to make around technology – how three people could use the one laptop or choosing between work and paying the bills or letting your child do a class – that was the real reality for a lot of people in Australia,” Mr Woodland said.
As a result, Xplor partnered with The Smith Family, a children’s charity, sponsoring more than 100 students through the charity’s Learning for Life sponsorship program, as well as its career program, Work Inspiration.
Mr Woodland is critical of the Australian government’s inability to offer bipartisan policy on education and how technology is changing the way children learn and how teachers teach.
“There’s too much worrying about getting re-elected or not,” he said. “Let’s worry about how we can get kids access to education, whether that’s through digitisation or through a genuine understanding of how children use technology.”
Why Young Rich lister Mark Woodland didn’t bootstrap childcare centre platform Xplor
Mark Woodland, the founder of childcare software firm Xplor, is one entrepreneur who believes in the value of taking on venture capital funding while a company is in its early stages of growth.
While some extol the virtues of raising no funds and attempting to “bootstrap” their company and self-fund growth – BRW Young Rich debutant Nick Bell said he would be more careful spending his own money than funds put in by investors – Woodland is adamant raising capital is the way to go.
Xplor, which has created an online platform which is used to allow parents to interact with their children in real-time during the day, but also by the childcare centres and schools to manage their operations, announced in August a $6 million funding round from Sydney-based Airtree Ventures.The funding boosted the value of Xplor, which Woodland founded in 2015 after a stint in the Australian Army that was followed by working in his mother’s Melbourne childcare centre, enough for Woodland, 34, to debut on this year’s BRW Young Rich list with a $54 million fortune.
Woodland said the negotiations with Airtree began late last year. “I remember [Airtree founder] Daniel Petre calling me and it was close to Christmas, and I said if they were serious they should come down to Melbourne.
‘We just felt comfortable’
“Daniel actually said he stopped cooking the family Christmas meal and went off and booked a flight. Sure enough they turned up and that made it pretty clear they were serious about us.”
While the negotiations took the best part of six months, Woodland said he agreed to keep the original financial terms of the deal intact even though Xplor grew rapidly during the first half of the year and was therefore theoretically worth more than when talks with Airtree had commenced.
“We just felt comfortable with them. They [Airtree co-founders Petre and Craig Blair] have so much experience as entrepreneurs and had great careers themselves so I felt that we could learn a lot from them and just really absorb a lot of knowledge at the same time.”
“There would be daily phone calls between us, regular visits and so on. They have helped us find good recruiters to get better people into the business, accountants and lawyers as well. It has been really good in terms of putting proper structures into the business.”
From army to app
Woodland’s path to being a tech entrepreneur was not the usual one. He spent nine years in the Australian army, including a stint as a psychological examiner, before leaving in 2012 to help at his mother’s childcare centre. Initially developing software to manage the back end of the business, Woodland expanded its abilities into what is now Xplor.
The firm’s app has the ability to share photographs, videos and messages with children’s parents throughout the day, and it also maintains payments and other record keeping matters for centre owners.
Woodland’s next step is for Xplor to keep signing up centres in Australia, Malaysia and the US, where he sees big potential for growth that could mean additional funding. All of which will be done with Airtree’s help.
*The 2016 BRW Young Rich list is published on Friday in The Australian Financial Review Magazine and at afr.com
Making healthcare connections more accessible
Sydney Morning Herald Original Article
Mark Woodland is the founder and chief executive of Kismet, a health tech start-up designed to improve access to healthcare and disability support and minimise fraud. In the case of the National Disability Insurance Scheme (NDIS), Kismet connects patients with legitimate providers and helps them to manage their funds.
Why did you start Kismet?
To me, Kismet was a case of “I can’t believe anyone else hasn’t done this”. Everyone needs healthcare, but finding help is prohibitively confusing. It was clear the industry needed digitising and simplifying, so we created Kismet.
Kismet means destiny and fate, but to us it also means overcoming hurdles and supporting each other.
What is Kismet’s underlying philosophy?
Our philosophy has remained the same: to improve accessibility to healthcare and provide the tools to facilitate strong support systems. The first-ever Kismet search was by my mother-in-law, who had previously struggled to find the help she needed. When she succeeded in doing this, we knew we were on the right track.
How has the business fared in the post-pandemic era?
The pandemic highlighted inequalities within existing healthcare systems, and the need to provide more inclusive care. The already stretched healthcare system is set to face its biggest challenge with an ageing population that will see six million Australians aged over 65 in the next ten years.
Useful programs such as the NDIS were set up to help those living with disabilities. However, the lack of systems, processes and policies is holding it back from its full potential. The recent federal budget also reinforced the need for better cost and fraud controls and improved accessibility in healthcare, especially with the NDIS and aged care.
How are interest and inflation affecting your company and your clients?
Cost of living pressures will leave many vulnerable Australians to choose between health or housing.
Everyone is affected, but healthcare isn’t like a gym membership or a take-away order – you can’t just skip it to save money. The difficult economic times have highlighted the benefits of cost-saving solutions.
How does your company stay on top of its finances?
From a business perspective, I really appreciate my experience with my previous start-up as it means that my team and I can avoid the past mistakes, thus building the most efficient and effective version of Kismet.
What motivates you to stay passionate about the business?
It’s exciting to think about the difference we can make in Australia but even better when we consider how many millions or even billions of people we can help if – and when – we go global. Meanwhile, there are more than 550,000 Australians registered with the NDIS, but 4.4 million Australians – one in six – who need access to disability support and health care services that we can offer through Kismet.
What is your advice to other small business start-ups?
Start-ups and small businesses are not for the faint of heart, they are unpredictable and insecure. However, the reward when you make it through the woods is worth it.
Why this Young Rich Lister quit retirement in two weeks
When 40-year-old Mark Woodland sold his first software company, he briefly tried out life as a retiree, but when he couldn’t get a decade-old business idea out of his head, the Young Rich Lister decided to start the journey again from scratch.
The iPad had just been released when Mr Woodland, a former artillery gunner with the Australian army, dreamt up the idea for his new business, Kismet, which would use technology to improve services in the aged care and disability sectors.
“It was an idea I had 12 years ago, but when I pitched it at a pitch contest back in 2010, I was laughed off the stage. In fairness, they were probably right, no one wanted it or needed it,” Mr Woodland told The Australian Financial Review.
Instead, he turned his attention to the childcare sector, building software company Xplor, which after a decade of explosive growth was sold in 2020 to US private equity giant Advent International in a deal understood to have valued it around $100 million.
When Mr Woodland – whose personal wealth was slated at $55 million in AFR’s previous Rich List analysis – exited Xplor in September 2022, he tried out retirement for a fortnight and then jumped back into start-up land.
The world has changed since 2010, and Mr Woodland decided the time was right to build online tools to reduce the administrative headaches for the ageing population and participants in the National Disability Insurance Scheme.
Waiting game
“Education was ready. Aged care and disability was not. So, I’ve just been waiting and waiting,”
“I couldn’t miss that chance, so I jumped back in,” he said.
Investor Daniel Petre and VC firm Airtree have put their money behind the founder for a second time, with the start-up raising a $4 million pre-seed round, which also includes participation from Black Nova and Flying Fox.
Kismet is an online platform that provides a complete view of an NDIS participant’s plan, which helps them track where their funds are spent. There’s also an online marketplace of 27,000 providers, which have all been vetted, where participants can book appointments and leave reviews.
The start-up has also replicated the digital chick-in system feature it built in Xplor which allows parents to sign children in and out of childcare via smartphone. For Kismet, the digital check-in is used to ensure the services that the NDIS has paid for are actually being delivered.
Spending cuts
“We saw the same problems of fraud, inefficiencies and friction in childcare a decade ago,” Mr Woodland said.
Last week, Disability Minister Bill Shorten outlined plans to cut $74 billion out of projected NDIS spending over the next decade, as the cost of the scheme continues to grow.
The company’s first suite of products is designed for the NDIS, but Mr Woodland has plans to use the company’s new capital to expand into aged care sectors internationally.
Mr Woodland co-founded Kismet with four of his colleague from Xplor, Sam Armstrong, Stefan Cordiner, Lauren Grimes and Matt Ellis.
“We understand how difficult it is to build something like this and we love seeing repeat-founders build on past successes from lessons learnt,” said Elicia McDonald, Partner at Airtree Ventures.
