US-based EdTech Provider zSpace, Inc., with UAE’s Gulf Islamic Investments as a major securityholder, announces business combination with EdtechX Holdings Acquisition Corp. II
zSpace facilitates immersive, innovative learning experiences for over one million students annually in major US school districts
Business combination implies a pro forma enterprise value of $195 million
Dubai, United Arab Emirates, May 18, 2022 – Gulf Islamic Investments (GII) backed zSpace, Inc., a leading provider of commercial augmented reality (AR) and virtual reality (VR) technology in the global education market, has announced its merger with EdtechX Holdings Acquisition Corp. II (EdtechX II), a publicly traded Special Purpose Acquisition Company (SPAC) with an implied pro forma enterprise value of $195 million. Following the anticipated fourth quarter 2022 closing of the proposed business combination, the combined company is expected to be renamed zSpace Technologies, Inc. and listed on the Nasdaq Stock Market. GII, and funds managed by GII, are key securityholders of zSpace and zSpace’s current stockholders will roll 100% of their existing equity holdings into the combined company.
Based in San Jose, California, zSpace offers differentiated hardware and immersive learning software modules for K-12 science, technology, engineering, game design, mathematics applications, as well as workforce-oriented career and technical education applications.
zSpace is an established leader within the emerging ‘Eduverse’ and is currently present in 94% of the top 100 school districts in the US, with a user base of over 2,400 US school customers, and over one million students annually. It has a pipeline of potential acquisition targets to further promote scale and international growth to markets in Asia, Europe, and the Middle East.
Between 2021 and 2024, zSpace expects to drive revenue growth at a CAGR of 47%, with annual recurring revenues (ARR) growing at a CAGR of 62%. In addition, the Company expects gross margins to expand at a CAGR of 44% within this period, and it believes it may achieve operating profitability by year-end 2023.
Commenting on the landmark deal, Pankaj Gupta, co-CEO at GII, and chairman of the board of directors of zSpace, said: “As a key existing securityholder in zSpace, we are committed to continue supporting zSpace through its debut on Nasdaq and its next stage of growth. EdTech is continuously thriving globally, especially as the COVID-19 pandemic accelerated new ways of delivering and receiving education.”
Mohammed Alhassan, co-CEO at GII, added: “This deal represents GII’s commitment to investments in key industries. We believe investors, across the region and the globe, have an important role to play in championing innovation in vital areas such as education. True to our mission of being an effective partner for growth, we are excited to be supporting these high-growth companies. We remain resolute to delivering meaningful opportunities for our stakeholders.”
The global AR, VR, and mixed reality market reached $28 billion in 2021, and is predicted to rise to over $250 billion by 2028. Spending on AR and VR is also expected to grow from $1.8 billion in 2018 to $12.6 billion in 2025.
In the Gulf region, several governments have set out ambitious strategies to modernize their economies, allowing advanced applications in technology to flourish. Education has been identified as a top priority in these national strategies, especially in upskilling the local population.
About zSpace
zSpace is a leading evidence-based augmented/virtual reality (AR/VR) platform providing innovative hands-on, experiential learning to improve achievement in science, math, and career and technical education credentialing. Over U.S. 2,400 school customers, technical centers, community colleges, and universities use zSpace to provide equitable access to instruction for millions of learners preparing for success in college and careers. A privately held, venture-backed company located in San Jose, California, it has more than 70 patents. zSpace was named "Cool Vendor" by Gartner, Inc., "Best in Show at ISTE" by Tech & Learning Magazine for three consecutive years and ranked two years in a row on the Inc. 500 list of fastest-growing companies.
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