On the first Friday in May, Tyler Bosmeny called an all-staff Zoom meeting for 9 a.m. The sale of his company鈥攅d-tech juggernaut , founded in 2012 and now used by more than half the country鈥檚 50 million public school students鈥攈ad been announced the previous evening. The CEO planned on striking his usual optimistic-but-pragmatic tone. But when he saw the faces of his 180 employees staring back from the rectangles on his screen, he was overcome with emotion.
鈥淲e achieved more than we ever could have dreamed,鈥� Bosmeny, now 34, explained in an interview this month. 鈥淲hen we launched, there weren鈥檛 many examples of companies in the K-12 space that had reached a milestone like this.鈥�
This includes a sticker price that could hit $500 million, to be paid by the Norwegian game-based learning platform Kahoot! when becomes official. The sale marks one of the largest K-12 ed-tech startup exits in history, surpassed in recent memory only by three months earlier.
Together, the transactions mark a coming-of-age moment for the ed-tech sector. Both San Francisco-based Clever and , whose headquarters are in Aventura, Fla., emerged during the heady startup days of the early 2010s, when hordes of young tech entrepreneurs hoped to capitalize on the new computing devices, broadband infrastructure, and cloud-based learning software starting to pour into public schools.
Unlike many of their competitors, however, Clever and Nearpod shied away from hyperbole about transforming education, choosing instead to focus on solving the everyday problems schools faced in a fast-changing technology environment. The strategy was a hit, leading both companies to exponential adoption curves and value that was made plain when the COVID-19 pandemic forced districts to reach for easy-to-use solutions to support online learning.
Now, leaders in schools and Silicon Valley alike would be wise to reflect on what the moment means.
Flush with billions of federal stimulus dollars, many of the nation鈥檚 K-12 school districts are looking to make permanent the most promising online learning experiments of the past year. In response, the largest companies in the ed-tech marketplace are consolidating their positions, gobbling up smaller entities they view as complementary so they can offer a bundle of related products and services鈥攏ot just in the United States, but to schools across the world.
鈥淲e don鈥檛 think this is a one-time spike,鈥� said Todd Brekhus, the chief product officer for ed-tech giant Renaissance Learning, whose acquisition of Nearpod is part of a larger spending spree.
鈥淭his is the long-term transition that those of us involved in this sector for decades have been waiting for.鈥�
鈥榃e have to start a company鈥�
Back in the early 2010s, Facebook was still preparing to go public, Twitter CEO Jack Dorsey hadn鈥檛 yet begun growing his signature beard, and the so-called platform economy was starting to transform industries like finance and retail sales, thanks in large part to a software tool called an application programming interface (API), which facilitates online transactions by allowing software systems to seamlessly share information.
As ever, though, America鈥檚 K-12 sector was behind the curve. 69传媒 were starting to offer high-speed broadband connections and personal computing devices to every student, and hundreds of small companies were responding with new digital learning programs that whet the appetites of teachers eager to experiment. But all that new software couldn鈥檛 talk to the 100 or so different student information systems used by school districts to track enrollment, attendance, and grades. As a result, teachers and district administrators were forced to spend ungodly amounts of time manually importing and exporting spreadsheets every time they wanted to let their students try a new math app or reading program.
鈥淭he infrastructure just wasn鈥檛 there,鈥� said Clever co-founder Dan Carroll, who was working as the tech director at STRIVE Prep charter school in Colorado at the time. 鈥淚 was going crazy.鈥�
In February 2012, Carroll took a trip to the Bay Area to compare notes with colleagues. His school鈥檚 travel budget didn鈥檛 include money for a hotel, so he slept on the couch of Bosmeny, a former Harvard classmate who鈥檇 caught the startup bug in San Francisco. By day, Carroll listened to other tech directors desperate for a simple way to get students rostered into learning software. By night, he listened to Bosmeny extol the Silicon Valley mantra he鈥檇 been absorbing: If the world doesn鈥檛 work the way you think it should, go improve it yourself.
On the day Carroll was to depart, the pair had a two-hour conversation in a rental car.
鈥淲hat are you going to do next?鈥� Bosmeny asked.
鈥淲hat do you mean?鈥� Carroll responded.
鈥淲e have to start a company,鈥� Bosmeny said. 鈥淚t鈥檚 the right time.鈥�
A week later, they were back together in San Francisco with Rafael Garcia, a third friend from Harvard. After sketching out a business plan, they reviewed their bank accounts, then committed to quitting their jobs, jointly signing a napkin to make it official.
The basic idea was to launch an API for education. Instead of directly offering their own digital curricula or learning software, Clever would serve as a hub, doing all the back-end legwork necessary to integrate other ed-tech products with schools鈥� student information systems. Crucially, they decided to make their service free for schools; any revenue would come instead from charging companies to plug into the new platform.
At a time when other entrepreneurs were raising millions by promising to revolutionize education, it was a decidedly unsexy plan. But from the beginning, Carroll insisted that Clever staff eliminate phrases like 鈥渄isrupting education鈥� from their vocabulary.
鈥淲e saw our role as lifting up all the great teachers and uncelebrated tech directors who were the ones actually making stuff happen,鈥� he said.
The first schools to sign up were part of charter networks with whom Carroll had personal connections. They showed the service could work. But it was an early conversation with Putnam City 69传媒, a by-the-book traditional public school system in Oklahoma, that convinced Carroll that Clever really was on to something. As soon as the call started, the district鈥檚 tech director launched into a lengthy lament about losing three years and hundreds of thousands of dollars to a faulty system that was supposed to automate his data integrations.
鈥淚 said, 鈥楽ir, I think we鈥檒l be able to get this done by tomorrow, and the cost to you is zero dollars,鈥欌�� Carroll recalled. 鈥淗e just laughed and said, 鈥業f you can do that, I鈥檓 gonna use you forever.鈥欌��
Within a year, Clever had 6,000 schools on board鈥攊ncluding Putnam City, which remains a client today.
soon came pouring in. The company launched a new feature that allowed students to use a single login and password to access dozens of different software programs, helping solve another huge K-12 technology headache. In 2014, Clever also rolled out a host of new partnerships, including an unlikely collaboration with the nation鈥檚 second-largest teachers鈥� union, many of whose members had previously been wary that Silicon Valley aimed to replace them.
鈥淲e鈥檙e starting to see fewer entrepreneurs going around teachers and instead starting to say, 鈥楬ow can we talk to them to find out what they really need?鈥欌�� American Federation of Teachers president Randi Weingarten told Education Week in 2014. 鈥淐lever knew that from the beginning. And that鈥檚 one of the reasons they鈥檝e been so successful.鈥�
鈥楧emand went through the roof鈥�
Friends from Argentina鈥擣elipe Sommer, Guido Kovalskys, and Emiliano Abramzon鈥攊nitially found success in the software industry with a company that specialized in customized digital marketing. Their $650 million ed-tech idea started with an attempt to synchronize corporate promotional pitches delivered to multiple mobile devices at the same time.
鈥淎fter seeing the early prototypes, the potential of this technology for education became obvious,鈥� Sommer in 2012.
All over the country, teachers were struggling to keep kids engaged and on-task in classrooms where nearly every student had his or her own personal mobile device. Within months, newly-formed Nearpod was rolling out a platform that allowed those educators to create digital lessons and presentations, deliver them to students鈥� iPads, control and monitor how students advanced through the material, and check for understanding with embedded quizzes, games, and polls. The company soon began adding a library of digital content developed by third-party publishers, positioning their platform in an intermediary-hub role roughly analogous to Clever鈥檚.
Educators loved it.
鈥淏y 2015, I was jealously watching teachers flock to them in the ISTE hall,鈥� said Renaissance Learning鈥檚 Brekhus, who at the time was promoting an ed-tech startup of his own at events like the annual conference of the International Society for Technology in Education.
That year, Nearpod hit nearly 2 million student users per month. Investors like , a founder and partner at venture firm Reach Capital who would ultimately participate in seven rounds of investment in Nearpod and assume a seat on the company鈥檚 board, began making huge bets the company would keep growing.
By Spring 2020, Nearpod was in 1,800 school districts. Then COVID-19 hit, serving as an accelerant for the forces that had fueled the company鈥檚 success.
鈥淔rom Day Zero, I knew we were in for a big moment,鈥� said Pep Carrera, who started as Nearpod鈥檚 new CEO March 16, just as schools began their frantic search for solutions that would help teachers deliver lessons to students working remotely on digital devices.
鈥淒emand went through the roof,鈥� he said.
Roughly 1.2 million teachers would ultimately use Nearpod in 2020, a five-fold increase over the previous year. The company also saw huge spikes in the number of teachers looking for high-quality pre-made lessons, and its engineers worked round-the-clock to adapt features like interactive games so they could be used asynchronously, helping Nearpod dramatically grow its .
According to Carolan, the first acquisition offer came in late 2020. Before the process was over, she said, there would be approximately nine more, from a wide range of companies enticed by Nearpod鈥檚 tremendous popularity with everyday teachers who just want their classrooms to run smoothly.
69传媒 had changed the way Silicon Valley thought about education, not the other way around.
鈥淲hen we started investing 10 years ago, people complained about ed tech鈥檚 鈥榯otal addressable market,鈥欌�漵aid Carolan, who not coincidentally is a former public school teacher herself, with a Master鈥檚 degree in education completed before she entered the world of venture capital.
鈥淏ut by the tail end of COVID, there was great awareness of just how large these companies could get,鈥� she said.
Consolidation and global aspirations now drive a vibrant ed-tech market
Nearpod鈥檚 decision to go with Renaissance Learning鈥檚 $650 million offer鈥攚hich was not the highest dollar figure on the table, according to Carolan鈥攔eflects one of the big market trends poised to sweep through the post-pandemic K-12 sector.
Consolidation.
With existing offerings like Accelerated Reader and its Star line of assessments, the bigger company already had a strong position in key segments of the ed-tech market. Recent acquisitions of companies such as Freckle and Schoolzilla helped it expand into new arenas such as personalized math instruction and learning analytics. Now, Renaissance Learning wants Nearpod to help tie the pieces together, by doing what it鈥檚 always done, just on a bigger scale.
鈥淲e鈥檙e aiming to create a unified teacher experience,鈥� said Brekhus, the chief product officer.
The sale of Clever, meanwhile, began with a friendly conversation between Bosmeny and Kahoot! CEO Eilert Hanoa about getting the company鈥檚 game-based digital content and quizzes onto Clever鈥檚 platform. The initial focus was on the benefits of Kahoot! expanding its U.S. footprint. Soon, though, the potential upside of taking Clever worldwide became evident.
鈥淗e said to me, 鈥榊ou know, we should be talking about something bigger,鈥欌�� Bosmeny said.
That was in January 2021.
By early May, Kahoot! was formally announcing the news that had prompted that all-hands Clever staff meeting. Nine years removed from couch-surfing and quitting their jobs, Clever鈥檚 founders had decided to cash out, for a payday that will be at least $435 million and could go as high as $500 million, depending on performance next year.
Like Nearpod, the company says it will retain its brand and continue to function independently.
Eyes still on the future, Bosmeny described the transition as more like a 6th grade promotion than a full-fledged graduation, given how much room he thinks both the company he started and the ed-tech sector at large still have to grow.
鈥淭he industry is growing up,鈥� he said. 鈥淓very CEO I talk to is trying to figure out how to serve a global market.鈥�
