Kahoot, the popular e-learning platform that provides a range of games to teach subjects (it has described itself as the “Netflix of education”), has made its first acquisition: it has acquired DragonBox, a startup that builds math apps, for $18 million in a combination of cash and shares.
Åsmund Furuseth, Kahoot’s CEO and co-founder, said in an interview that the deal was being done at an uptick to Kahoot’s previous valuation of $376 millon; the bigger company is now creeping up to $400 million.
It’s a relatively strong exit for DragonBox, which had raised less than $500,000 since 2012 primarily from going through incubators and accelerators, according to PitchBook.
The plan will be to bring DragonBox — which, like Kahoot, has roots in Norway — on wholesale to continue growing DragonBox’s existing business, as well as to supplement Kahoot’s offering. Today the smaller startup already has millions of users in Europe, including schools that use it to teach K-12 math curriculum subjects, but alongside that it will also to start to develop more educational content for the main Kahoot platform.
That Kahoot platform up to now has grown organically through a combination of both Kahoot-created, and user-created content (users can build their own games on Kahoot); as well as through serving two markets: K-12 users, and enterprise customers for corporate training. Furuseth sees DragonBox as supplementing the first of these, specifically by helping it expand into more parent-led and home learning that supplements what children might be getting in classrooms.
That’s an area where Kahoot already has a sizeable business. Furuseth said that of the 1 billion plays that its platform saw in 2018, 700 million came from K-12 classrooms, 30 million came from enterprises, and the rest — around 270 million — came from people using Kahoot at home, playing around 100 million games. That speaks to an opportunity to build more content to serve that third sector, which is where DragonBox will fit.
“Since day one, DragonBox has made learning math more fun and engaging for children around the world. Together with Kahoot!, we will enable millions of more users to enjoy learning math in an awesome way,” said Jean-Baptiste Huynh, math teacher, CEO and co-founder of DragonBox.
Furuseth added that the company is also looking at making further acquisitions to continue growing Kahoot alongside its own organic growth, tapping into the fact that there are dozens of smaller startups in the world of education that will be challenged to scale up on their own. (Not the small number of enterprise users in the mix today: my guess is that’s an area where the company may try to grow through more bolt-on businesses.)
“In general, it’s hard for many small and even successful ed-tech companies to reach a large mass of users because it’s difficult to cut through the noise,” Furuseth said in an interview. “We think our brand can help by reaching out with more learning experiences now and in the future.”
Under Furuseth as CEO, the company has been trying to tap into that also by way of a new accelerator that it launched last year called Ignite, which it sees partly as a way to help grow those businesses, as well as a way to find promising startups that it might worth with or acquire itself.