A)plan coaching is raising a tiered crowd note (SWIFT) at a $20 million valuation with a 20% conversion discount. That valuation is rather high even with a)plan’s projected 2021 revenues of roughly $1.78 million. With a revenue-to-valuation multiple of 11x, it seems that a)plan views itself primarily as a technology company. While that multiple would be reasonable for a technology startup, it is far too high for a services-based business. It’s debatable whether a)plan’s mobile app for coaching is sophisticated enough for the company to be considered a true software business, so the company’s valuation is rather shaky.

There is a relatively large market for business coaching in the United States. Coaching is commonplace among executives at large companies, and it is gradually growing in popularity among earlier-stage companies and less senior employees. As of 2022, the business coaching market in the US is estimated at $11.2 billion. 

However, recent trends in coaching are concerning. The industry has actually declined in value over the past five years at an average annual rate of 1.7%. That decrease in demand starkly contrasts the boom in coaching supply. The International Coaching Federation has measured a steady uptick in the number of coach practitioners in recent years. 

Another headwind that may impact a)plan coaching’s outlook is the possibility that the future of work involves more independent contracting than traditional employment. Younger employees value the ability to work remotely, create flexible schedules, and other perks of contracting. If companies begin pivoting to hiring more contractors and investing less in nurturing full-time staff, a)plan coaching could struggle to sign contracts. 

Overall, a)plan coaching seems to sit in a struggling – and perhaps even shrinking – market that is not a particularly compelling area for investment. 

A)plan coaching was founded by Sara Ellis Conant and Michael Counts. The pair offer a good blend of strengths. Conant, the CEO, is a long-time coach with a decade of experience running her own coaching practice. Counts appears to be more of a part-time advisor at a)plan. He is a seasoned entrepreneur and creative consultant. He has almost three decades of experience designing immersive experiences and other artistic productions. 

Beyond Conant and Counts, the a)plan executive team includes three other experienced coaches, each with their own practice and decades of experience in business leadership roles. For example, Lawrence Ellis is an “executive consultant and thought leader” at the globally renowned professional services firm Accenture. 

It’s important to note that Conant appears to be the only executive who works full-time at a)plan coaching. Each of the other management team members are engaged in their own projects, usually a coaching practice or other consulting operation. In addition, a)plan does not have anyone with technical expertise on the leadership team, which runs counter to the notion that a)plan is an innovative software company. Despite a deep well of experience in the coaching industry, a)plan’s team has relatively low capacity and some major skill gaps. 

A)plan coaching is up against two types of competitors: traditional coaches – who typically run sole proprietorships or boutique firms – and other startups looking to scale a coaching business model. Against traditional coaches, a)plan has compelling differentiators. Its mobile app offers much more frequent support and access than a traditional coach, keeping employees engaged with frequent check-ins and tangible ways to track their progress. Plus, traditional coaches wouldn’t have the capacity to take on large-scale corporate contracts with multiple employees and teams in the way that a)plan can. 

However, a)plan is not as well differentiated when compared to the landscape of other startups pitching similar technology solutions to democratize coaching. Take the well-funded startup BetterUp, which recently raised $300 million in its Series E round at a $4.7 billion valuation to further develop a scalable coaching and wellness technology platform that is far ahead of a)plan’s simple app. There are several other companies with a similar vision. A)plan points to a list of specific app features that apparently can’t be found on BetterUp, but they seem minor and uncompelling for the average buyer. 

A)plan coaching certainly has the potential to continue garnering corporate contracts and growing at a decent clip. However, it seems unlikely that the company can ever compete with giants like BetterUp that are much further along. 

A)plan coaching is growing revenue steadily. The company was bringing in less than $175,000 per quarter for most of 2020, but 2021 saw quarterly revenues of closer to $300,000. Plus, a)plan projects bringing in more than $4.5 million in revenue for 2022. If the company can achieve those numbers, year-over-year growth from 2020 to 2022 would be very impressive. In addition, a)plan seems to have recently turned the corner into profitability. According to audited financial statements for 2020, a)plan posted a net loss of more than $400,000. Projected financials for the end of 2021 show an inflection point of expected profitability in November 2021 and beyond. 

This financial data demonstrates the validity of a)plan’s business model, which rested on the assumption that coaching with the help of a mobile app could be both affordable for the buyer and lucrative for the seller. Top-tier companies and organizations like Stripe, MetLife, Lovevery, and the Haas School of Business at UC Berkeley have trusted a)plan to coach their employees and students. Overall, a)plan coaching has a good deal of traction strengthening its future prospects.

A)plan coaching is a relatively low-risk investment given that the company has raised crowdfunding before, is generating sizable revenue quarter-over-quarter, and is led by a large team of experienced coaches who have run similar businesses before. There is some concern around the company’s financials. A)plan had more than $650,000 in debt on its most recent financials. While the company is projecting revenue of more than $1 million for 2021, it’s unclear what the status of that debt will be. There is also a time risk associated with a)plan. The startup seems to be taking a long time to develop truly differentiated technology that could catapult it beyond the ranks of standard coaching service businesses. 

When a)plan coaching first raised a crowdfunding round in early 2020, the company was in its infancy. A)plan had only generated a few hundred thousand dollars in revenue, and it still needed to prove that coaching aided by a mobile app was scalable and lucrative. This raise offers a strong proof of concept. A)plan has now generated millions in revenue, grown a team of almost 50 coaches, and inked deals with exciting new clients like Stripe. Overall, it’s clear that a)plan has made a great deal of progress since its last round. 

It is worth noting that a)plan’s mobile app does not seem to have improved greatly since 2020. Across both rounds, the company seems to be struggling to develop a well-designed, feature-rich platform that would truly differentiate it from other coaching software companies. A)plan still lacks any technical expertise on the leadership team, which could continue to slow product development. At the same time, the company’s valuation cap has doubled from $10 million in 2020 to $20 million in this round. As a result, a)plan’s rating has been downgraded from Deal to Watch to Neutral Deal in this round.

A)plan coaching has grown impressively in the last two years, particularly when compared to the young company that first raised capital in early 2020. However, this investment feels risky in the long term. The market for business coaching has actually declined over the last five years, which is never a good sign for a new startup. In addition, a)plan is up against a large range of competitors pitching a very similar vision for technology-enabled coaching. BetterUp in particular seems to be accomplishing exactly what a)plan aims to do but with the advantages of many years of software development and hundreds of millions of dollars in venture capital. 

All in all, it’s difficult to see a)plan as much more than a coaching services business similar to hundreds of others on the market. The company’s app doesn’t seem to be that distinctive or game-changing, and its brand is more reminiscent of a sole proprietorship than an audacious software startup. As a result, investors might fear that a)plan will eventually hit a revenue plateau with minimal investment upside.

A)plan coaching’s long-term prospects may seem questionable given the state of the business coaching market and the presence of well-established competitors. However, a)plan coaching is a very successful company based on current metrics. The company has demonstrated steady, impressive year-over-year growth. Even better, a)plan projected profitability as of November 2021. When comparing today’s business against the one that first raised capital two years ago, it’s clear that a)plan has generated more traction than the average early-stage business. 

A)plan is unlikely to ever compete with massive coaching technology companies like BetterUp. However, it may find success within a different niche. There are enough potential clients to go around, and some might prefer a coaching approach that doesn’t reek of Silicon Valley. A)plan has a clear focus on diversity and progressive values, which resonates with many companies and employees in 2022. With continued careful management and growth, a)plan coaching could provide decent returns for investors. 

A)plan coaching is a business-to-business company that arranges high-quality professional coaching for its clients’ employees. This coaching is conducted through the company’s mobile app, which provides more frequent check-ins and better coach access than traditional service providers can offer. A)plan is growing steadily and projects hitting more than $4.5 million in revenue this year with a net profit. 

On the other hand, a)plan’s valuation is debatably high, and the market for professional coaching is stagnant. While some corporations are clearly willing to invest in coaching, it’s not clear that there’s an overwhelming trend toward one-on-one coaching for all employees. In addition, a)plan is competing against a crowded landscape of other startups that provide tools for better employee development and engagement. A)plan’s best hope is to invest more in its technology, but its pace of development is slow and the company has no senior technical leadership. Therefore, a)plan coaching has been rated a Neutral Deal. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to [email protected]. 

Analysis written January 28, 2022.