Newsela, an NYC-based startup that provides digital educational content for students K-12, announced Thursday it closed on a $100 million Series D round led by Franklin Templeton. This fresh funding brings the eight-year-old company’s total valuation to $1 billion.
This is not the first edtech startup to reach unicorn status lately. Companies including Quizlet and Course Hero have hit $1 billion valuations, too, spurred on by the remote education boom brought on by the COVID-19 pandemic.
“The demands of remote learning amplified pre-existing weakness in how K-12 instructional content is evaluated, procured, and delivered,” Chris Anderson, a research analyst and portfolio manager at Franklin Templeton, said in a statement. “The widespread shift of traditional classrooms to digital experiences spurred by the pandemic has greatly accelerated the transition from paper-based materials to SaaS solutions already underway.”
In Newsela’s case, the company has created a platform that does away with the antiquated, expensive world of print textbooks without having to rely on the uncensored Wild West that is the internet.
The platform houses a catalog of more than 14,000 pieces of digitized content published by the likes of the Associated Press, National Geographic, the New York Times and Encyclopedia Britannica. This content is reproduced at a variety of reading levels, and is accompanied by assessments and lesson ideas designed according to the standards of specific subjects and grades. Teachers can access all this material in one place, then remix and modify it, or simply follow the pre-built lesson plans.
Today, Newsela claims to work with 37 million students and 2.5 million teachers in 90 percent of all U.S. schools. In 2020 alone, the company’s annual recurring revenue grew by more than 80 percent, with new bookings surging 115 percent.
Newsela’s founder and CEO Matthew Gross says that, while the pandemic has been instrumental, this recent surge in demand is simply “a continuation of the rapidly accelerating growth” the company has been experiencing for years.
“Education leaders are breaking free from the limits of an antiquated marketplace that locks schools into a static, un-engaging curriculum while the world continues to change around us,” Gross said in a statement. “School administrators are taking this opportunity to future-proof their schools, and they’re not looking back.”
Looking ahead, Newsela says it plans to use this fresh funding to build and acquire more features and content, as well as accelerate its rapidly expanding user base. The company is also hiring, with more than 60 open tech positions at its NYC headquarters.
