Last week, Edmodo was acquired by the Chinese gaming company NetDragon for $137.5 million. The deal to acquire the K-12 student and teacher social platform prompted a good deal of speculation. But the biggest, takeaway considering Edmodo\u2019s past rounds of investment, is that NetDragon got a deal.<\/p>\n
In 2014, they rounded up $30 million in Series D funding, putting their valuation at $236 million.<\/p>\n
Edmodo allows teachers and learners to interact online in a school-friendly environment. Many instructors use it much like they would a learning management system. It allows them to put out assignments, get in touch with parents, or even answer some quick questions from students when class isn\u2019t in session. Many have called it the Facebook of K-12 education.<\/p>\n
And with 90 million users, Edmodo had good claim to that title. But despite several signs of healthy growth, Edmodo\u2019s sale at a 42% discount wasn\u2019t a surprise to everyone.<\/p>\n
One of those would be Christopher Nyren. Having worked previously at Apollo Education Group, he started Educated Ventures in 2011.<\/p>\n
\u201cAs far back as 2014 at the Harvard-Goldman Sachs Global Education conference, I found myself at a table with investors and entrepreneurs spouting off my usual diatribe against Silicon Valley’s approach to edtech and the doomed fates awaiting their most hyped start-ups like Edmodo,\u201d Nyren said.<\/p>\n
\u201cAnd while most of my neighbors began to shy away for fear of being associated with the crazy guy, one leaned over and asked if I had any plans to be in the Bay Area and could meet.\u00a0Turned out it was the new acqui-hired CEO of Edmodo.\u00a0 He was quite open admitting they were a bit DOA and this was shortly after they raised a further $30mm venture round too.\u201d<\/p>\n
As the Financial Times pointed out<\/a>, NetDragon paid just $1.52 per user. Edmodo CEO Vibhu Mittal has often publicly struggled to figure out how to leverage a profit from his growing base. \u201cIf I can only [make] 30 cents or 40 cents per user per year, [we] would be profitable,\u201d\u00a0Mittal said at the 2016 ASU GSV Summit<\/a>.<\/p>\n