Edmodo has raised a $30 million venture round led by Index Partners, bringing the total amount of funding raised to $87 million according to Xconomy.
Investors participating in the four venture rounds to date include Learn Capital, Benchmark, Union Square Ventures, Greylock Partners and others.
With that amount of money raised it is highly unlikely that Edmodo will ever become an acquisition target which means that all signs are now set on an IPO as we saw with other startups in the edtech space. Chegg raised $252 million in ten rounds. 2U raised $95.9 million in six rounds before its IPO earlier this year. Instructure raised $39.1 million in three rounds and hinted that the next step would be the stock market.
There is of course a difference between 2U and Chegg on the one hand and Edmodo and Instructure on the other. Whereas 2U and Chegg had a clear business model from day one, Edmodo and Instructure followed the path of organic growth and adding paid options later on. In the case of Edmodo offering the platform for free brought the product into the hands of over 35 million users, teachers and students, in over 220.000 schools across the world to date.
That the platform is now adding premium options like professional development courses and its analytics suite Snapshot is another sign that Edmodo is preparing for an IPO. The team has been famously tight lipped about its business model but EdSurge shared that Edmodo charges $7500 for a six week PD course and that Snapshot is priced between $1275 to $2000 per school per year. If half of the 220k schools signed up for the small plan, Edmodo would be making over 140 million per year.
For comparison, Chegg had digital revenue of $18.7 million and 2U reported $24.7 million in revenue for the second quarter of 2014.
All in all there is huge potential in Edmodo as it has managed to become more than just another edtech product. In November 2012 I wrote that
“A second candidate for an IPO might be Edmodo. Similar to 2U the platform, Edmodo is building a product and not just a feature. It’s a platform that adds new features, and has seen great traction amongst its users.”
Index Ventures gave a similar reason why it invested in Edmodo in a blog post
“There are many characteristics of successful start-ups. But at the core, there are three models that we love the most: businesses that are marketplaces, businesses with network effect and businesses that become platforms for an ecosystem. In Edmodo, we see an opportunity for all three of these models in a sector that has fundamentally been a technology laggard. We’re thrilled to back one of the world’s most promising education startups, and we can’t wait to work side-by-side with the team as they continue to transform the education sector.”
- Bringing innovation to our educational systems: Why Index invested in Edmodo | Index Ventures
- Edtech Companies Foresee Boost from New K-12 Standards | Xconomy
- Edmodo Raises $30M Round Led by Index Ventures | EdSurge
- 2U, Inc. Reports Second Quarter 2014 Financial Results | PR Newswire
- Chegg outsources Textbook Distribution to Ingram in its Transition to Digital Company | EDUKWEST
- All is well in Edtech Land | EDUKWEST