Some startups raise a lot of money with much fanfare before they’ve ever shipped a product, but some grow under the radar, building something that clicks, and then slowly amassing users and revenues before most even realise they’ve arrived.
Now, one of the latter — an education startup called Age of Learning — has moved into the billion dollar valuation club on the strength of one highly-grossing, popular app called ABCmouse. The company has quietly raised $150 million at a $1 billion valuation from Iconiq Capital, TechCrunch has learned and confirmed.
Iconiq itself is a somewhat quiet affair, too. Part investment fund and part family office for the likes of the Zuckerbergs, Sheryl Sandberg, Reid Hofmann and Jack Dorsey, the company does not make much of a song and dance about its investments and other activities. In this case, Will Griffith, a partner at Iconiq and a board member at Age of Learning, also confirmed the investment in an email to me after we asked about it.
Perhaps because education tends not to be as flashy other areas of tech, and perhaps because Age of Learning has not been in the business of talking up its investors and other milestones that usually form the path of mainstream and tech media coverage, Age of Learning has largely remained out of the limelight compared to some of its peers in the world of successful apps.
But ABCmouse has cornered its market. For the last year and a half, it has consistently stayed in the very top ranks as most downloaded and highest grossing educational and kids apps. From what we understand, the app has annual revenues of over $100 million, and the business is profitable. (And although we heard that it’s raising more money, apparently this is not on the cards.)
What’s interesting is the targeted approach the company has taken. ABCmouse only offers content for children between two and seven years of age, soon to be two and eight (that is recent: it used to be just 2-6). It is currently active in only two markets, its home base of the U.S., and more recently China.
But as it grows, and with the kind of funding it’s raising, my guess is that Age of Learning is likely to expand in both age range and geography.
“Age of Learning is an extremely innovative ‘education first’ technology company,” said Griffith. “We are thrilled to partner with them in their unparalleled commitment to creating the highest quality early learning curriculum and support their continued success in improving educational outcomes for kids around the world.”
All together, the company has over one million subscribing families. It says millions of children use ABCmouse in-home through paid subscriptions — $7.95/month for unlimited access to 7,000+ activities and 3 unique child profiles. Schools, libraries, Head Start programs, and community centers can use the app free of charge.
Founded around 2007 by Doug Dohring — a serial entrepreneur who had previously started and sold Neopets to Viacom in 2005 (Viacom then sold it on in 2014 to JumpStart) — Age of Learning had previously raised around $30 million in 2011 and 2012 from an undisclosed group of investors before its round with Iconiq.
Its history up to now is an example of how tech companies do not need to follow a specific pattern of moving fast and breaking things, but rather doing what works for a particular product.
In its case, although Glendale, CA-based Age of Learning has been around for nearly a decade, it started slow, spending nearly four years building things before launching its products, first for families in 2010, then adding tools for teachers in 2011.
Age of Learning’s growth spurt appears to have happened around 2013-2014, when it consolidated some 20 different apps into a single flagship product filled with lots of different subjects, now some 7,000 activities in all.
(When you think about it, this is in contrast with others like Facebook, which runs several strong app brands, but it’s a route that works in ABCmouse’s specific patch: it’s the same strategy followed by other educational publishers like language app maker Monkimun.)
It looks also like some recategorizing of the app in November 2014 also played into the app’s favor.
While ABCmouse’s audience and approach are targeted, the offering is actually pretty vast, like an ever-expanding book: ABCmouse now has over 7,000 learning activities that include reading and language arts, math, science, social studies, health, art, and music, with development steered by a board that includes teachers, academics and others, and several awards to its credit.
And while publishers in categories like games are always trying to figure out what will be their next big hit, spinning more apps out of their development factories in pursuit of this goal, it seems there are no plans to return to an array of different apps outside of the flagship app.
“We’re focused on continuing to expand ABCmouse,” Zac Katz, SVP of corporate development at Age of Learning, told TechCrunch.