China’s NetDragon to Acquire Edmodo for $137.5 Million
By Betsy Corcoran and Tony Wan Apr 9, 2018 https://www.edsurge.com/news/2018-04-09-china-s-netdragon-to-acquire-edmodo-for-137-5-million
NetDragon Websoft, a publicly-traded company based in Fuzhou, China, has agreed to pay $137.5 million for Edmodo.
The deal could mark the beginning of the end for the “free” model of education technology, at least for standalone education companies without other strong revenue streams to support them.
Edmodo was started in 2008 by a teacher and IT support person as a “Facebook-like” community aimed at connecting educators with students and with one another. Also like Facebook, Edmodo grew rapidly. Currently, the company, now based in San Mateo, Calif., claims more than 90 million registered users (both teachers and students) in 400,000 schools across 192 countries.
Edmodo struggled, however, to find a business model that would support its burgeoning community. It raised close to $100 million in funding, and began seeking another round last year. The company had shifted to an advertising-based model—although one in which the company was trying to move carefully and respect its audience of teachers and students.
According to a financial statement published by NetDragon, Edmodo lost $19.5 million in 2017, based on revenue of approximately $1 million.
That seems to be an increasingly popular path. A decade ago, the big education companies were traditional textbook providers such as Pearson. Now the most powerful players are technology companies that offer devices and software. At the top of the list: Google, which supports Chromebooks as well as Google Classroom, and Apple, which sells iPads, Macs and now the Schoolwork app.
By contrast, NetDragon began in 1999 and built its initial financial muscle with games. It has, however, long identified education as one of its top areas of interest. Recently the company has begun purchasing education technology assets at a rapid clip. In 2015, NetDragon paid approximately $130 million to acquire U.K.-based interactive whiteboard maker, Promethean, which gave it a hardware-based entry into classrooms.
The company, which refers to the hardware as “interactive panels,” is equipping 13,000 classrooms in Moscow with digital whiteboards.
Last year, NetDragon also acquired JumpStart, an educational game company behind iconic titles including Math Blaster. And earlier this year, it bought Sokikom, an online game-based math program.
more about Edmodo in this IMS blog