Kahoot acquires Clever, the US-based edtech portal, for up to $500M

Kahoot acquires Clever

Kahoot acquires Clever, a well-known edtech firm with headquarters in Oslo that has made a fortune by gamifying education and developing a platform for users to create their own learning games, is making an acquisition to increase its focus on K–12 education and its potential for expansion in the United States. It is purchasing Clever, a startup that created a single sign-on gateway for teachers, students, and their families to create and participate in digital learning classrooms. This portal is presently used by around 65% of all U.S. K–12 schools. According to Kahoot, depending on achieving specific performance objectives, the deal, which includes cash and shares, gives Clever an enterprise value of between $435 million and $500 million.

The goal is to continue increasing Clever’s 175-person U.S. workforce and provide it a lever for worldwide expansion alongside Kahoot’s larger portfolio of edtech products and services.

According to Eilert Hanoa, CEO of Kahoot, “Clever and Kahoot are two purpose-led firms who are equally enthusiastic about education and unleashing the potential within every learner.” “Through this acquisition, we see significant opportunity to collaborate on educational innovation to better serve all of our users, including schools, instructors, students, parents, and lifelong learners, and to use our global scale to provide Clever’s distinctive platform globally. The Kahoot family is pleased to welcome Tyler and his crew.

The announcement coincided with Kahoot’s release of good Q1 results and the closing of its unreported acquisition of Whiteboard.fi, a provider of whiteboard tools for instructors with a market cap of $4.3 billion on the Oslo stock exchange.

Clever and other edtech startups have benefited from the same currents that have helped Kahoot.

The startup was initially incubated in Y Combinator and launched with a vision to be a “Twilio for education.” Its vision was to create a unified way to be able to tap into the numerous student sign-on systems and educational databases in order to make it easier for those developing edtech services to scale their products and attract more customers (schools, teachers, students, and families) to use them. It turns out that the market for education is also rather fragmented, much like the markets for payments, general financial services, and telecommunications. Clever wanted to find a way to simplify the complexity and hide it behind an API so that others could use it more easily.

Over time, it also developed an application gallery (marketplace in its terminology) with some 600 software vendors and application developers who interact with its SSO, giving schools and districts access to a larger variety of edtech solutions. This has been increasingly important over the past year as schools have been compelled to stop offering in-person instruction in order to stop the COVID-19 pandemic.

Kahoot acquires Clever strategy has gained a lot of support from investors as well as educational institutions. With regard to the former, Clever claims that it is utilised by 89,000 schools and roughly 65% of K–12 school districts (13,000 in total) in the United States, 95 of the top 100 school districts in the nation included. This equates to 5.6 billion learning sessions and 20 million students logging in each month.

A rather amazing array of investors, including current and former YC partners like Paul Graham and Sam Altman, GSV, Founders Fund, Lightspeed, and Sequoia, have contributed to the latter company’s funding round. It hasn’t raised money since 2016, which in and of itself is an indication that it’s doing something well as a business. It raised little under $60 million, which may seem modest in today’s market. However, keep in mind that it has been around since 2012, when edtech was less hip and attention-grabbing.

Clever has been operating the business on “a cash flow neutral basis, redeploying all cash into development of its offerings,” according to Kahoot, who also pointed out that the company projects $44 million in billed revenues for 2021, with an annual revenue growth rate of about 25% CAGR in the last three years.

The pandemic and the enormous growth in remote learning and remote work contributed greatly to Kahoot acquires Clever successful year. In its results, it stated that it had 28 million active accounts in the previous year, which represented a 68% increase over the year before. It also stated that during that time, 279 million games were hosted, an increase of 28%, and more than 1.6 billion people participated in those games, an increase of 24%. 760,000 paid memberships were active in Q1; 255,000 of them belonged to the “work” (B2B) tier, 275,000 to school accounts, and 230,000 to the “home and study” category. Actual revenue for the quarter was $16.2 million (up from $4.2 million a year ago), increasing by 284%, while annual recurring revenue is now $69 million ($18 million for the same quarter last year).

In order to grow, the business, which is funded by companies like Disney, Microsoft, and Softbank, has made a number of acquisitions. The largest of these is clever at the moment.