Google Capital Invests in Firm That Sells STAR Assessments, Accelerated Reader
Renaissance Learning Inc., a K-12 assessment and learning analytics company based in Wisconsin Rapids, Wis., has received $40 million from Google Capital, an equity fund focused on growth companies.
The move represents Google Capital's first funding of an education company, and gives the investors a minority ownership position in Renaissance Learning, which is known in K-12 circles for its STAR assessments, and its Accelerated Reader and Accelerated Math curricula.
Renaissance's current valuation is $1 billion—more than twice what it was worth in 2011, when it was acquired for $455 million by Permira, a London-based private equity firm. A Google Capital representative will join Renaissance Learning's board of directors.
Jack Lynch, CEO of Renaissance, said the opportunity was serendipitous. "We were at Google, talking to them about a number of opportunities to collaborate. Google Apps and Google Play for Education are making really good headway in the K-12 market," he said.
Now, Google's devices and applications reach 30 million students and educators, representing collaborative opportunities with Renaissance, which Lynch said reaches 40,000 schools and nearly 20 million students and teachers.
"With social, mobile, cloud-based technologies, we see the teacher at the intersection of those major forces for change," Lynch said in a phone interview before the announcement. "We're not looking to harness the power of technology; we're really looking to use technology to unlock the power of the teacher."
Renaissance helps teachers plot students along a learning path that has been validated by researchers.
"The distinction I would draw [from other companies] is that, at the core of our business, is a learning progression that we built with experts in the industry," he said.
The company's offerings are cloud-based, and rely on data sets that the company said are "anonymized." In the interview, Lynch indicated that none of the student data his company generates is shared, except with the school district.
Gene Frantz, general partner of Google Capital, said in a statement that Renaissance Learning's "ability to use data to support effective teaching and drive student growth is unparalleled."
Discussing his company's growth strategy at a conference last December, Lynch said, "For us, our strategy has been historically to identify a sub-segment [of the market] and achieve leadership there before moving into an adjacent sub-segment."
Last August, Renaissance Learning acquired Subtext, an e-reading platform for K-12 instructional e-reading, as a complement to its Accelerated Reader independent reading platform. Google Ventures was an early investor in Subtext, and users of the Subtext platform access Google Books as their source for e-book purchases and rentals, according to the Renaissance release.
Compared to last year's figures from CB Insights, the $40 million investment from Google Capital would have been the sixth largest ed-tech financing. No comparable statistics are available yet for 2014 investments.