Edtech startups flirt with unicorn-style growth

Published July 21, 2020

When Quizlet became a unicorn earlier this year, CEO Matthew Glotzbach said he’d prefer to distance the company from the common nomenclature for a startup valued at or above $1 billion.

“The way Quizlet has gotten to this point is by building and growing a very responsible business,” he said. “It’s the result of the hard work of the team for a decade. We’re much more like a camel.”

It’s clear, though, that the tides might be changing. In edtech, the rich are getting richer. Last week, Mountain View-based Coursera announced it had raised a $130 million Series F round a day after The Information broke a story about Udemy reportedly raising new financing at a $3 billion valuation.

For anyone who has been following my edtech coverage in recent few months, this momentum is hardly surprising. Earlier in the pandemic, MasterClass raised $100 million, Quizlet became a unicorn and Byju’s became India’s second-most-valuable startup.

While edtech’s boom is predictable, the industry is known — to the chagrin of founders and to the benefit of long-time investors — for being conservative. Today we’ll look to understand how a boost in late-stage funding may impact the market on a broader scale.

High-flying camels

Ian Chiu, an investor at Owl Ventures, tells TechCrunch that the rise of big rounds brings a “watershed moment” to the $6 trillion education market. Owl Ventures was founded in 2014 and is one of the biggest edtech-focused firms out there, but Chiu says the recent strong capital flow shows that the sector is finally emerging as a sector other investors are noticing.

4 edtech CEOs peer into the industry’s future

Published May 11, 2020

When Zach Sims first started pitching his coding startup, Codecademy, he framed it to investors as a corporate tutoring company. That was intentional, despite the fact that edtech is a $5 trillion business.

“It was much easier for investors to understand instead of an education company,” he said, noting that the industry has long been defined by tight budgets and slow sales cycles.

But, as millions adopt remote learning overnight, edtech’s reputation is changing — and investors are scrambling accordingly. The revitalization means that a new wave of edtech startups is upon us. We asked four entrepreneurs who have been working in this space to share what they think the next billion-dollar business will look like. While we’ve covered the investor side of edtech quite a bit, it was refreshing to hear from founders and executives who are on the ground making decisions:

Matthew Glotzbach, CEO, Quizlet
Jessie Woolley-Wilson, CEO and president, DreamBox Learning
Darren Shimkus, general manager, Udemy for Business
Zach Sims, co-founder and CEO, Codecademy

How to sell: Classroom and outside the box

According to Matthew Glotzbach, CEO of Quizlet, “any edtech solution tailored toward schools and classrooms may find a significant headwind,” such as games or VR/AR headsets that need to be used within classroom settings. “Not because physical spaces are going away, but in this limited time, limited budget environment, teachers and administrators are going to spend their money on solutions that are more tailored toward distance.”

Startups should plan to be useful in both a pre-coronavirus and post-coronavirus world, likely hybridizing tech solutions that are useful for day-to-day classroom operations as well as remote learning.

How to reach scale: B2C or B2B?

Quizlet hits 50M monthly users

Published October 25, 2018

Most students in the U.S. have used or at least heard of Quizlet, the website for creating digital flashcards.

The company leverages machine learning to predict in which areas its users need the most help and provides 300 million user-generated study decks, maps, charts and other tools for learning.

Roughly eight months after closing a $20 million financing, Quizlet chief executive officer Matthew Glotzbach has disclosed some notable feats for the emerging edtech: it’s reached 50 million monthly active users, up from 30 million one year ago, and though it’s not profitable yet, its revenue is growing 100 percent YoY.

As a result of its recent growth, the company is opening its first office outside of Silicon Valley, in Denver.

“We by no means feel like our work is done; 50 million is a very small fraction of the 1.4 billion students on the planet,” Glotzbach told TechCrunch. “Our focus is growing the platform. If we continue to be successful in that mission, we will be the largest study and learning brand.”

The company has been around for a while. Founded in 2005 by then 15-year-old Andrew Sutherland, Quizlet was fully bootstrapped until 2015.

Its growth really began when Glotzbach, a seasoned executive most recently at YouTube, took the reigns in 2016. The $20 million round earlier this year, its largest yet, has allowed the company to blossom, too. Led by Icon Ventures, with participation from Union Square Ventures, Costanoa Ventures and others, it brought Quizlet’s total raised to just over $30 million.

Quizlet raises $20 million for virtual flash cards

Part of its growth, according to Glotzbach, has to do with its recent focus on its international users. The site has always been accessible around the world, but not until late 2016 did Quizlet begin offering the tool in other languages. Today, it’s available in more than 15 languages, a number the company is actively working to expand.

Newly added capabilities have also contributed to recent spikes in MAUs. Students can now access diagram-based content, which is helpful for STEM subjects, an area the company has historically been less helpful with.

Quizlet operates a freemium model but has three subscription products for power users. At $12 per year, Quizlet Go has no ads and provides an offline studying option on mobile. Quizlet Plus, at $20 per year, also provides an ad-free study experience, as well as image uploading and voice recording capabilities. Finally, Quizlet for Teachers offers educators a $35 per year option that lets them create their own decks for students and access to additional data, analytics and reporting.