As an entrepreneur from St. Petersburg made a small technological revolution in autoopravna, creating the most advanced network of driving schools in Russia, why he decided to make the company public and how the future is going to bring it to IPO.
St. Petersburg company "Svetofor" has begun collecting bids for the initial placement of exchange-traded bonds with a volume of RUB 50 million According to experts of the high-yield bond market, the release promises to be one of the most interesting in the sector of high yield in 2018. Talk about how the businessman from St. Petersburg made a small technological revolution in autoopravna, creating the most advanced network of driving schools in Russia, why he decided to make the company public and how the future is going to bring it to IPO.
The first private school appeared in St. Petersburg in 1989 — it was a cooperative "Svetofor". Opened it Victor Dagaev. "At that time in St. Petersburg driving only taught units and DOSAAF driving school all-Russian society of motorists (VOA). Father was the first who has registered a cooperative and opened a private driving school, — tells Artem Dagaev. I began to connect to the business process when I was doing my first year of high school. Dad gave me the green light, delegating some of the powers, and I began scaling business in parallel with the construction of a network in St. Petersburg, we began to develop the branch network in the Leningrad region. Then he opened a few schools in other regions, testing the business model."
As a result, in 2010, Artem Dagaev finally took the helm of the group of companies — from this moment began a new phase of business.
Market autoopravna in Russia
At the end of 2017 in Russia there were 6.8 thousand driving schools, including private schools, divisions DOSAAF driving school all-Russian society of motorists (VOA). This is almost two times less than it was in 2014. "The market autoopravna greatly shrank after the reform, 2014 — says Artem Dagaev. — Then the school is obliged to comply with the new requirements to material-technical base (equipment, training premises, venues). For example, under the new rules, each school now had to have a pad circuit area of at least 0,24 ha. For many players, these innovations proved to be too costly, as a result, they were forced to leave the market".
Three years after the reform reduced the number of students — from 2.46 million people in 2014 to 1.33 million people in 2017. The fall in market demand for services driving schools due to the demographic "pit" of the late 1990s, believes Dagaev. But 2018, the market began to rise again due to increased demand for the services of driving schools by young people born in 2000-ies.
While competitors have saved the business from the effects of the reform, Dagaev figured out how to take a promising new niche in the market autoopravna, deciding to invest in innovative IT platform and launch distance learning for students driving school. "In 2014, a full distance learning none of the driving schools on the market are not offered. You can learn remotely, but in fact it was a self study for the students: the classical online learning when you listen to a lecture teacher in real time, you can ask him questions and solve problems in the market autoopravna was not. We first asked the audience such a classic online learning, — tells Artem Dagaev. — Then there were interesting ideas how to use certain characteristics of the users, in order to build individual learning paths. According to the research of the Agency for strategic initiatives to 2022 needs to appear educational technology, personalized learning, taking into account individual psychophysiological characteristics of the people and for them to adjust learning process. We figured out how to put it in the system autoopravna".
In the process of learning is assessed many of the behavioral characteristics of the student: concentration, frequency cues, and variations in the choice of answers. Thus the program brings out your individual behavioral characteristics, for example, your attitude to risk.
"We can analyze which materials affect you the best: video, text or audio. In addition, during the lecture, the system offers interactive tasks. explains Dagaev. Depending on your selection, the program will generate for you additional tasks, thereby correcting your attitude towards a particular topic. For example, if you have in principle a high risk appetite, then you are more prone to cases of getting into an accident, speeding, running a red light and so on. Our task is in learning to reduce your risk tolerance to a minimum or to normal levels, thus minimizing the likelihood of getting into an accident in the future."
An e-learning platform was launched in 2015. Led the development team of a former classmate Artem Dogaeva — Michael Koziakov, who is having more 10 years experience in the development and implementation of software. The method of evaluating psychophysiological features of students helped to develop the head of the Department of psychophysiology, SPbSU.
In the development of e-learning platform has already invested more than 100 million rubles.
The project has allowed "Svetofor Grupp" to obtain the status of resident "SKOLKOVO". A group of independent experts evaluated it on a list of criteria: level of competence of the team, a potential competitive advantage over global peers, whether the product has significant potential for commercialization on the Russian and global market, is the project theoretically feasible and so on.
Participation in the SKOLKOVO project gives a number of advantages for start-up companies, including tax breaks. For example, the project participants shall be exempt from the duties of accounting and payment of income tax if annual revenues did not exceed 1 billion rubles.
Now in the development of the platform has already invested more than 100 million rubles. the Next stage is a complete revision and product launch of a mobile app. "Today one of the most active consumers in the market is the millennial generation — people born between the mid 90s to 2000-ies. This is a digital generation that is actively interested in science and technology, they are characterized by another system of consumption: they are used to obtain all services through a smartphone. The challenges are ready," — said the Dagaev.
The mobile app will allow comfortably carry the listener through the entire learning process, to remotely monitor the results of practical classes and examinations. Now does not do this, no driving school in Russia.
The share of students online will grow to about 75% by 2022-2023.
Currently, about 30-40% students are enrolled in the "Svetofor" online. Peter followers "numbers" more — about 40%. In the regions, while on the contrary listeners prefer traditional forms of learning. There are on-line training are about 30% of the student body. "In three years we will see quite a big step forward in online education. The share of online will grow to about 75% by 2022-2023.", — predicts the owner of "Svetofor Grupp".
Now the Svetofor 55 training classes in St. Petersburg, the Leningrad region, Moscow, Podolsk, Nizhny Novgorod, Kursk and Chelyabinsk. In the coming year, Dagaev expects to seriously increase the company's presence in the first place in St. Petersburg. "Yes, this is a very competitive market, — says the owner of the "Svetofor" — But Peter "Svetofor" — a very recognizable brand. We have room to grow. This is our main city presence, we are planning a substantial increase market share here to increase the number of missions schools in Petersburg to 100. For us it exhaust business process, we know how this business is scale".
Overall, the regional network of schools "Svetofor" in Russia will grow twice.
The growth of your own network is not the only priority, says Dagaev. Not less ambitious plans are connected with the implementation of B2B strategy.
"Many schools today would like to implement online learning, it reduces the costs of business allows us to expand the circle of potential listeners. But they have no technology as we have. Therefore, one of the main objectives for the coming year — a major investment in the development of the system of distance learning. This will allow us to offer other companies access to the e-learning platform as a standalone product. We can not only give access to partners in the regions, but also to help sell the distance learning. We understand how to find customers, we know how much each customer. Many small companies in the regions do not have the budget or resources to independently conduct such an analysis, we can help them to do it, having signed a contract with them for lead generation. That is to offer them not only training, but also ready leads.
In the future the "Svetofor" will be able to sell access to the platform is not only the driving but major aggregators taxi operators freight
The owner of "Svetofor Grupp" is convinced that the regional partnership will give companies a very powerful impetus to the development. "Plus the fact that the system starts to work immediately: we have a working environment, conclude the contract with partners, offer them, give recommendations for its set-up and promotion."
In the future the "Svetofor" will be able to sell access to the platform is not only the driving but major aggregators taxi companies, cargo operators who need instruments for testing drivers. "The tests on knowledge of traffic rules can't tell you anything about the driver. Analysis of its physiological characteristics in the learning process gives quite different results."
Next year the company plans to test more and the ability to work in franchising. "We now can offer their brand, their technology, and the partner on the spot to open a school and to pay us some form of royalties, franchise fees range from 250 thousand rubles — says Artem Dagaev. — Educate potential partners we can online. This reduces costs for all. So we quickly teach them how profit drive this business."
Dagaev recognized that not once thought about the expansion in Moscow and even received offers to purchase existing companies in the capital market. A few years ago, the innovation Agency of the city of Moscow invited him to take part in the session devoted to education. So the idea of a train driving high school students, using the capabilities of online learning platforms: students are distance learning, pass the exam and get a driver's license upon reaching 18 years of age. The project has already been approved by the city customers.
"This is a huge market, and we get it to consumers before they officially came on him, that is before they turned 18. Once we have a completed product, we can offer it to the Department of education of the city of Moscow continue to choose partners among Moscow networks of driving schools: local players have the resources and logistical base in order to organize the process of learning, and we have a product that can be embedded in the learning process, making it more technological and efficient."
Still "Svetofor Grupp" entirely funded the development through its own profits. But it's time to make the company public, I'm sure Artem Dagaev. "We wanted to hold an IPO a year ago, he says. But decided to postpone these plans and begin to form a public credit history with the bond market. It is the ideal bridge for the company with small capitalisation. The bonds will allow investors to meet with business groups to generate positive public history. For us it is an opportunity to Express themselves, to learn how to create and publish reporting, develop a clear payment discipline. In addition, the bond market offers more flexible terms than Bank lending, for example. The profitability of EBITDAМы quite able to digest the rate at 17-18% per annum."
Bond issue of "Svetofor Grupp" — the first public offering of the company from among the residents of "SKOLKOVO"
Now the "Svetofor Grupp" collects applications of investors for the placement of debut issue two-year exchange bonds worth RUB 50 million annual offer. About 40 million rubles of borrowed funds, the company plans to direct development in the field of IT and 10 million rubles will be invested in marketing. The development of the branch network will be financed by provided for this purpose own funds.
"This is the first public offering of the company from among the residents of "SKOLKOVO", — said Artyom Dagaev. — Before that none of the residents did not put stocks or bonds, such companies have traditionally used venture capital financing.
From idea to IPO "Svetofor" also did not refuse. According to the businessman, the next year the company expects to implement the announced plans to expand its network and launch of the project in the B2B market, assess the cash flow from these areas, to evaluate the company and to offer investors up to 25% of shares under a public offering in the market sector innovation and investment market of Moscow Exchange".
One of the most interesting markets for international expansion "Svetofor Grupp" — China. "The Chinese market has the largest network of driving schools in the world — a Pioneer Driving School. Its shares are listed on the Shanghai stock exchange. Now this network offers primarily classical classroom training, in the future the Chinese may be interested in our distance learning technologies that take into account the psychophysiological features of students. They have the interest, now the baton is in our hands — our objective is to offer them a decent product. - says Artem Dagaev.
Another promising area for expansion of geography of business in the future — the United Arab Emirates studying and working a lot of expats. In this country has a point system for violation of traffic rules. For the systematic violation of traffic law can be deleted. To get them again, you need to pass a certain test. Using our platform this can be done including remotely monitoring physiological parameters".
The future of business
The question that will be driving in the future when the market will win unmanned vehicles equipped with automatic control system, without human intervention, Artem Dagaev greets with a smile: "of Course, it may happen, but in 20-30 years, when there will be a certain infrastructure. Yes, the world has changed and will change cars, but believe me, the driver's license will remain, and so our business will live and grow. In addition, the IT platform we develop can be applied not only to educate drivers but also to broadcast educational programs in related fields. This is the future".
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