Starting a business in one's 40s and taking it public.

Recently, Jiangsu Cloud School Network Technology Co., Ltd., a holding company of Cloud School Group Holdings Limited, founded in Suzhou, submitted a prospectus to the SEC, preparing for an IPO on NASDAQ.

On February 7th of this year, Cloud School obtained an overseas listing registration notice from the China Securities Regulatory Commission.

Cloud School's primary business is providing corporate training, having established a comprehensive training system that integrates "software + content + services." For instance, it assists companies in conducting mass training for new employees to equip them with essential job skills and in upgrading the skills of in-service employees to adapt to changing environments.

Founded in Suzhou in 2011, Cloud School now has dual headquarters in Beijing and Suzhou. Beijing serves as the marketing and content center, while Suzhou is the R&D center.

Cloud School's founder, Lu Xiaoyan, was born in 1969 and graduated from Beijing Information Engineering Institute in 1995 with a degree in Management Information Systems, making her one of the early software professionals in China. After graduation, she worked at Suzhou Materials Trade Group and co-founded a software company under its umbrella.

Feeling ill-suited to the atmosphere of state-owned enterprises, Lu Xiaoyan began her entrepreneurial journey in Suzhou in 1998, successively founding Ouso Software, Jintu Technology, and Huizhi Network, all of which were involved in software development and IT training, primarily serving governments and enterprises.

In 2011, Lu Xiaoyan handed over the successful businesses she had founded to her colleagues and embarked on a new venture, Cloud School, applying internet thinking to corporate training.

At that time, IBM had just introduced the concept of cloud platforms, and Lu Xiaoyan believed that cloud computing was the future trend, deciding to revamp corporate training using cloud-based methods.

In the mobile internet era, information changes rapidly, and corporate employees must constantly acquire new knowledge and continue to grow to keep pace with development. However, traditional offline corporate training has limitations, covering only 5%-10% of the total workforce, often benefiting only middle and senior management, leaving the grassroots employees who most urgently need training underserved. Furthermore, most companies' in-house training quality is not high, failing to achieve the desired results.

Cloud School addresses these issues by scaling, modularizing, and rapidly customizing corporate training through online methods. According to an interview with China Business Review, Lu Xiaoyan revealed that Cloud School is the first in the industry to resolutely pursue a SaaS (Software as a Service) model rather than software privatization, investing heavily in SaaS products and firmly opposing privatized software businesses, regardless of their profit margins. This is because privatized software businesses can fall into the trap of traditional software enterprises, where the more they do, the more they lose.

In addition, Cloud School has invested heavily in content development, creating a vast array of courses through a combination of internal development and external collaboration. As of March 31, 2024, Cloud School offers over 8,200 courses covering approximately 20 industries, with a total learning time exceeding 20,500 hours, including more than 6,800 hours of proprietary courses. This content serves as a content mall for companies to choose from, partially addressing the market's pain point of a lack of high-quality training content.

Cloud School has received a total of five rounds of investment from institutions such as Longmarch Venture Capital, SIG Asia, Yunfeng Capital, Centurium Capital, Tencent, Matrix Partners China, Sequoia Capital China, and Hongzhuo Capital, with a valuation exceeding $1 billion (approximately RMB 7.2 billion).

Before the IPO, Lu Xiaoyan held a 16.9% stake in Cloud School, while Centurium Capital was the largest institutional investor with a 20.1% stake. Yunfeng Capital held 15.1%, and Tencent held 13.2%.

The prospectus reveals that Cloud School's revenue for 2022, 2023, and the first three months of 2024 was RMB 431 million, RMB 424 million, and RMB 83 million, respectively, with net profits of -RMB 615 million, -RMB 220 million, and RMB 35 million over the same periods. In the first three months of this year, Cloud School achieved profitability.

According to Frost & Sullivan data, Cloud School is China's largest provider of digital corporate learning solutions in terms of total revenue, subscription revenue, and the number of subscription customers in 2023.

Some say that Lu Xiaoyan is similar to Lei Jun, both being peers who started their careers in software and re-entered the entrepreneurial world in their early 40s, focusing on internet-related businesses and taking their new companies public.

This article does not constitute any investment advice. This article is based on reports from TechNode, China Business Review, and the Economic Observer, to whom we express our gratitude.