Kahoot acquires Clever, the US-based edtech portal, for up to $500M

Kahoot, the popular Oslo-based edtech company that has built a big business out of gamifiying education and creating a platform for users to build their own learning games, is making an acquisition to double down on K-12 education and its opportunities to grow in the U.S. It is acquiring Clever, a startup that has built a single sign-on portal for educators, students and their families to build and engage in digital learning classrooms, currently used by about 65% of all U.S. K-12 schools. Kahoot said that the deal — coming in a combination of cash and shares — gives Clever an enterprise value of between $435 million and $500 million, dependent on meeting certain performance milestones.

The plan will be to continue growing Clever’s business in the U.S. — which currently employs 175 people — as well as give it a lever for expanding globally alongside Kahoot’s wider stable of edtech software and services.

“Clever and Kahoot! are two purpose-led organizations that are equally passionate about education and unleashing the potential within every learner,” said Eilert Hanoa, CEO at Kahoot, in a statement. “Through this acquisition we see considerable potential to collaborate on education innovation to better service all our users – schools, teachers, students, parents and lifelong learners – and leveraging our global scale to offer Clever’s unique platform worldwide. I’m excited to welcome Tyler and his team to the Kahoot family.”

The news came on the same day that Kahoot, which is traded in Oslo with a market cap of $4.3 billion, also announced strong Q1 results in which it also noted it has closed its acquisition of Whiteboard.fi, a provider of whiteboard tools for teachers, for an undisclosed sum.

The same tides that have been lifting Kahoot have also been playing out for Clever and other edtech companies.

The startup was originally incubated in Y Combinator and launched with a vision to be a “Twilio for education“, which in its vision was to create a unified way of being able to tap into the myriad of student sign-on systems and educational databases to make it easier for those building edtech services to scale their products, and bring on more customers (schools, teachers, students, families) to use them. As with payments, financial services in general, and telecommunications, it turns out that education is also a pretty fragmented market, and Clever wanted to figure out a way to fix the complexity and put it behind an API to make it easier for others to tap into it.

Over time it built that out also with a marketplace (application gallery in its terminology) of some 600 software providers and application developers that integrate with its SSO, which in turn becomes a way for a school or district to subsequently expand the number of edtech tools that it can use. This has been especially critical in the last year as schools have been forced to close in-person learning and go entirely virtual to help stave off the spread of the Covid-19 pandemic.

Clever has found a lot of traction for its approach both with schools, and investors. With the former, Clever says that it’s used by 89,000 schools and some 65% of K-12 school districts (13,000 overall) in the U.S., with that figure including 95 of the 100 largest school districts in the country. This works out to 20 million students logging in monthly and 5.6 billion learning sessions.

Born in the pandemic, Moonfire’s first $60M Seed fund will combine remote investing with big data

During the pandemic, we’ve seen the rise of ‘Zoom investing’ – where VCs literally use remote video conference tools like Zoom and Google Meet to take pitches from entrepreneurs. Now a new European Seed fund plans to leverage that emerging behavior and bake it into their model.

Mattias Ljungman, the former co-founder of Atomico formed Moonfire when he left in December 2019, but few details were revealed about his new operation. Today Moonfire reveals it will be a $60 million seed-stage “data-driven” VC that will also leverage the new advantages of remote working which entrepreneurs themselves have had to adapt to.

Admittedly Ljungman didn’t have much choice. Starting in January 2020, he ended up having to found, raise and close the fund, as well as invest, almost all remotely. But, he says, that means it will continue to take advantage of this ‘new normal’. “We are doing zoom investing. It’s the death of geography, and people are now pretty comfortable with that way of living,” he told me, literally via Zoom.

Moonfire’s first fund has been raised from LPs spanning the usual swathe of institutional investors, entrepreneurs, and VCs. Cendana, the US-based seed fund investment firm, is the anchor investor. It is joined by Utah School & Institutional Trust Funds Office (SITFO) and Reference Capital, among others. Moonfire says the fund was significantly oversubscribed.

Moonfire will focus on a very broad range of areas which will include Health & Wellbeing, Work & Knowledge, Gaming, Community & Leisure and Capital & Finance. Its most recent investments across Europe include Humaans, Electric Noir Studios, Skunkworks, Pento, Awell Health, Mindstone, Business Score, Homerun, HiPeople, LoveShark, WillaPay, Oliva, Equify, and more.

Ljungman ‘knows his onions,’ as the phrase goes. As a co-founder of Atomico he spent 20 years investing tech startups-turned-unicorns including Klarna, Supercell, Viagogo and Climate Corp.

Mike Arpaia and Candice Lo. Arpaia will partner the firm with Ljungman. Former computer scientist Arpaia joins Moonfire with experience from Etsy, Facebook, Kolide, and Workday. Lo has been an entrepreneur but is an operator turned investor with experience at Uber in Europe and China, as well as an early-stage investor with the UK’s Blossom Capital.

Ljungman says data will form the cornerstone of the fund. He said: “Venture will always be a relationship business, but it should be powered by data, software, and machine learning to hone and optimize everything we do from discovery, screening, and evaluation to delivering better insights for our founders. We are able to enhance traditional thesis-driven investing and make decision-making quicker and more effective.”

Of course, just about every VC these days says it uses data to invest – Inreach Ventures in London, for instance, is just one of many that makes a great play of this idea.

Over a video call, Ljungman countered: “You’re looking at utilizing software, automation, and machine learning. If you look at any industry that is what happened – software is eating it up. It touches every component of your process from discovering companies to managing them, evaluating them, helping them with support. So we still have our thesis-driven approach, but what we’re doing is pairing it with software, like a bionic suit, so this is how to augment what we do and do it bigger and better.”

He added: “The European ecosystem is a lot bigger today, so relying on gut instinct, relationships, networking is not going to be efficient. Utilizing software is going to be critical for us. We have 1.4 million people already in our database. These entrepreneurs usually have a really nice history. The average entrepreneur is a lot older than it used to be, as well. If we’re looking at thousands of companies per year, there are real network effects. The more you build out your data the more you build out your portfolio, the more you make more investments, the better you are at helping and supporting your portfolio companies because you’ve institutionalized that knowledge.”

Graham Pingree, Partner at Cendana Capital, said in a statement: “We’ve been watching the European start-up ecosystem mature and grow in the past year and we’re excited to have the opportunity to partner with the team at Moonfire as they look to expand their portfolio. Moonfire, like Cendana, is passionate about supporting founders at the earliest stages of their journey and they have the skills and expertise needed to nurture a new generation of founders.”

Shift Technology raises $220M at a $1B+ valuation to fight insurance fraud with AI

While insurance providers continue to get disrupted by startups like Lemonade, Alan, Clearcover, Pie and many others applying tech to rethink how to build a business around helping people and companies mitigate against risks with some financial security, one issue that has not disappeared is fraud. Today, a startup out of France is announcing some funding for AI technology that it has built for all insurance providers, old and new, to help them detect and prevent it.

Shift Technology, which provides a set of AI-based SaaS tools to insurance companies to scan and automatically flag fraud scenarios across a range of use cases — they include claims fraud, claims automation, underwriting, subrogation detection and financial crime detection — has raised $220 million, money that it will be using both to expand in the property and casualty insurance market, the area where it is already strong, as well as to expand into health, and to double down on growing its business in the U.S. It also provides fraud detection for the travel insurance sector.

This Series D is being led Advent International, via Advent Tech, with participation from Avenir and others. Accel, Bessemer Venture Partners, General Catalyst, and Iris Capital — who were all part of Shift’s Series C led by Bessemer in 2019 — also participated. With this round, Paris and Boston-based Shift Technology has now raised some $320 million and has confirmed that it is now valued at over $1 billion.

The company currently has around 100 customers across 25 different countries — with customers including Generali France and Mitsui Sumitomo — and says that it has already analyzed nearly two billion claims, data that’s feeding its machine learning algorithms to improve how they work.

The challenge (or I suppose, opportunity) that Shift is tackling, however, is much bigger. The Coalition Against Insurance Fraud, a non-profit in the U.S., estimates that at least $80 billion of fraudulent claims are made annually in the U.S. alone, but the figure is likely significantly higher. One problem has, ironically, been the move to more virtualized processes, which open the door to malicious actors exploiting loopholes in claims filing and fudging information.

Shift is also not alone in tackling this issue: the market for insurance fraud detection globally was estimated to be worth $2.5 billion in 2019 and projected to be worth as much as $8 billion by 2024.

In addition to others in claims management tech such as Brightcore and Guidewire, many of the wave of insuretech startups are building in their own in-house AI-based fraud protection, and it’s very likely that we’ll see a rise of other fraud protection services, built out of fintech to guard against financial crime, making their way to insurance, as the mechanics of how the two work and the compliance issues both face are very closely aligned.

“The entire Shift team has worked tirelessly to build this company and provide insurers with the technology solutions they need to empower employees to best be there for their policyholders. We are thrilled to partner with Advent International, given their considerable sector expertise and global reach and are taking another giant step forward with this latest investment,” stated Jeremy Jawish, CEO and co-founder, Shift Technology, in a statement. “We have only just scratched the surface of what is possible when AI-based decision automation and optimization is applied to the critical processes that drive the insurance policy lifecycle.”

For its backers, one key point with Shift is that it’s helping older providers bring on more tools and services that can help them improve their margins as well as better compete against the technology built by newer players.

“Since its founding in 2014, Shift has made a name for itself in the complex world of insurance,” said Thomas Weisman, an Advent director, in a statement. “Shift’s advanced suite of SaaS products is helping insurers to reshape manual and often time-consuming claims processes in a safer and more automated way. We are proud to be part of this exciting company’s next wave of growth.”

Supercell likes Metacore’s games so much it just gave it another $180M credit line

Metacore, a Finnish mobile games company, seems to have an amazing ‘relationship’ with Supercell, another (quite successful) Finnish mobile games company.

Back in September 2020, Metacore raised $17.7 million in equity from Supercell and another $11.8 million line of credit, sometimes also called a debt round. That amazing relationship appears to be ongoing. Because Metacore has now raised yet another debt round from Supercell, but this time for €150 million ($180 million). These guys really like each other.

The simple reason for this is two words: Merge Mansion. This game has been so spectacularly successful that Supercell clearly wants a stake in that success, and it has the cash reserves to make that bet.

The puzzle discovery game has 800,000 daily players, and an annual revenue run rate of over €45 million, so it’s really on a growth curve.

Why so successful? Well, players have really loved the idea that they can literally merge two items they pick up in the game to make a brand new thing. So for instance, you can merge two rakes and you get another kind of tool that you can then can use somewhere else. This is a very unique mechanic in mobile games.

Supercell is also enamored of Metacore’s games development strategy: it creates games with two to three person teams and only adds resources when a game takes off. This innovative approach to game development is at least part of the reason Supercell is doubling down on its investment, not just Merge Mansion itself. It’s a sort of ‘fail-fast’ approach to game-making that is clearly paying dividends.

So why this approach to the latest financing?

I spoke to CEO and Co-Founder Mika Tammenkoski who told me: “Yes, it is it is credit line. We are more about scaling up the company as we are scaling up revenue. We already have meaningful revenue, we can invest the money, and we can expect a certain kind of return on investment. So this is the cheapest investment that we can get. Equity investment would dilute us. So this makes sense from that point of view. With Supercell, we have a really great partner, backing us. They know exactly what is ahead of us. They know exactly the kind of challenges that we have, and that makes us aligned in that sense… We both think long term, we both want to scale the game as big as possible. And with Supercell we get the best terms overall.”

So there you have it. Metacore and Supercell are locked in an embrace which any other outside investor is going to have to invest in big to get a look in on the action.

Disqus facing $3M fine in Norway for tracking users without consent

Disqus, a commenting plugin that’s used by a number of news websites and which can share user data for ad targeting purposes, has got into hot water in Norway for tracking users without their consent.

The local data protection agency said today it has notified the U.S.-based company of an intent to fine it €2.5 million (~$3M) for failures to comply with requirements in Europe’s General Data Protection Regulation (GDPR) on accountability, lawfulness and transparency.

Disqus’ parent, Zeta Global, has been contacted for comment.

Datatilsynet said it acted following a 2019 investigation in Norway’s national press — which found that default settings buried in the Disqus’ plug-in opted sites into sharing user data on millions of users in markets including the U.S.

And while in most of Europe the company was found to have applied an opt-in to gather consent from users to be tracked — likely in order to avoid trouble with the GDPR — it appears to have been unaware that the regulation applies in Norway.

Norway is not a member of the European Union but is in the European Economic Area — which adopted the GDPR in July 2018, slightly after it came into force elsewhere in the EU. (Norway transposed the regulation into national law also in July 2018.)

The Norwegian DPA writes that Disqus’ unlawful data-sharing has “predominantly been an issue in Norway” — and says that seven websites are affected: NRK.no/ytring, P3.no, tv.2.no/broom, khrono.no, adressa.no, rights.no and document.no.

“Disqus has argued that their practices could be based on the legitimate interest balancing test as a lawful basis, despite the company being unaware that the GDPR applied to data subjects in Norway,” the DPA’s director-general, Bjørn Erik Thon, goes on.

“Based on our investigation so far, we believe that Disqus could not rely on legitimate interest as a legal basis for tracking across websites, services or devices, profiling and disclosure of personal data for marketing purposes, and that this type of tracking would require consent.”

“Our preliminary conclusion is that Disqus has processed personal data unlawfully. However, our investigation also discovered serious issues regarding transparency and accountability,” Thon added.

The DPA said the infringements are serious and have affected “several hundred thousands of individuals”, adding that the affected personal data “are highly private and may relate to minors or reveal political opinions”.

“The tracking, profiling and disclosure of data was invasive and nontransparent,” it added.

The DPA has given Disqus until May 31 to comment on the findings ahead of issuing a fine decision.

Publishers reminded of their responsibility

Datatilsynet has also fired a warning shot at local publishers who were using the Disqus platform — pointing out that website owners “are also responsible under the GDPR for which third parties they allow on their websites”.

So, in other words, even if you didn’t know about a default data-sharing setting that’s not an excuse because it’s your legal responsibility to know what any code you put on your website is doing with user data.

The DPA adds that “in the present case” it has focused the investigation on Disqus — providing publishers with an opportunity to get their houses in order ahead of any future checks it might make.

Norway’s DPA also has some admirably plain language to explain the “serious” problem of profiling people without their consent. “Hidden tracking and profiling is very invasive,” says Thon. “Without information that someone is using our personal data, we lose the opportunity to exercise our rights to access, and to object to the use of our personal data for marketing purposes.

“An aggravating circumstance is that disclosure of personal data for programmatic advertising entails a high risk that individuals will lose control over who processes their personal data.”

Zooming out, the issue of adtech industry tracking and GDPR compliance has become a major headache for DPAs across Europe — which have been repeatedly slammed for failing to enforce the law in this area since GDPR came into application in May 2018.

In the UK, for example (which transposed the GDPR before Brexit so still has an equivalent data protection framework for now), the ICO has been investigating GDPR complaints against real-time bidding’s (RTB) use of personal data to run behavioral ads for years — yet hasn’t issued a single fine or order, despite repeatedly warning the industry that it’s acting unlawfully.

The regulator is now being sued by complainants over its inaction.

Ireland’s DPC, meanwhile — which is the lead DPA for a swathe of adtech giants which site their regional HQ in the country — has a number of open GDPR investigations into adtech (including RTB). But has also failed to issue any decisions in this area almost three years after the regulation begun being applied.

Its lack of action on adtech complaints has contributed significantly to rising domestic (and European) pressure on its GDPR enforcement record more generally, including from the European Commission. (And it’s notable that the latter’s most recent legislative proposals in the digital arena include provisions that seek to avoid the risk of similar enforcement bottlenecks.)

The story on adtech and the GDPR looks a little different in Belgium, though, where the DPA appears to be inching toward a major slap-down of current adtech practices.

A preliminary report last year by its investigatory division called into question the legal standard of the consents being gathered via a flagship industry framework, designed by the IAB Europe. This so-called ‘Transparency and Consent’ framework (TCF) was found not to comply with the GDPR’s principles of transparency, fairness and accountability, or the lawfulness of processing.

A final decision is expected on that case this year — but if the DPA upholds the division’s findings it could deal a massive blow to the behavioral ad industry’s ability to track and target Europeans.

Studies suggest Internet users in Europe would overwhelmingly choose not to be tracked if they were actually offered the GDPR standard of a specific, clear, informed and free choice, without any loopholes or manipulative dark patterns.

Sprout.ai raises $11m Series A led by Octopus Ventures to apply AI to insurance claims

It was way back in 2018 that Omni:us appeared to disrupt the insurance market by applying AI to this most legacy of all industries. It has now gone on to raise $44.1 million. In a similar vein, Shift Technology in France has raised $100 million.

Now a UK startup aims to do something similar, but this time it will be coming out of the key market of the UK, where the insurance industry is enormous.

Sprout.ai is an insurtech startup that use AI to help instance companies to settle claims within 24 hours. It’s now raised £8m/$11m Series A round led by Octopus Ventures. The round was joined by existing investors, Amadeus Capital Partners, Playfair Capital and Techstars. It was Seed funded buy Amadeus in 2020.

Sprout.ai supplies global insurers, such as Zurich, with a product that applies NLP and OCR to insurance claims (which might involve such as handwritten doctors’ notes for instance) to enable them to be resolved faster, in not a dissimilar fashion to Omni:us and SHift. Sprout.ai says it now has deployments in Europe, South America and APAC.

Niels Thoné, CEO of Sprout.ai, said in a statement: “Sprout.ai’s mission is to revolutionize customer service within global claims automation. Our innovative and industry-leading AI claims engine is poised to solve the current market inefficiencies, allowing insurers to focus on customers in their moments of need.”

Nick Sando, early-stage fintech investor at Octopus Ventures, said: “We are often at our most vulnerable when we submit insurance claims, and it doesn’t help when we then have to wait another month for it to be processed. Sprout.ai empowers insurers to process claims in a fraction of the time, creating much better outcomes for customers when they need it most.”

As we can see, the market is hotting up for this kind of service, so it will be interesting see if these startups end up ‘land-locked’ to their language markets or not. Certainly, I can see M&A opportunities for whoever starts to lead the pack.

Sprout.ai raises $11m Series A led by Octopus Ventures to apply AI to insurance claims

It was way back in 2018 that Omni:us appeared to disrupt the insurance market by applying AI to this most legacy of all industries. It has now gone on to raise $44.1 million. In a similar vein, Shift Technology in France has raised $100 million.

Now a UK startup aims to do something similar, but this time it will be coming out of the key market of the UK, where the insurance industry is enormous.

Sprout.ai is an insurtech startup that use AI to help instance companies to settle claims within 24 hours. It’s now raised £8m/$11m Series A round led by Octopus Ventures. The round was joined by existing investors, Amadeus Capital Partners, Playfair Capital and Techstars. It was Seed funded buy Amadeus in 2020.

Sprout.ai supplies global insurers, such as Zurich, with a product that applies NLP and OCR to insurance claims (which might involve such as handwritten doctors’ notes for instance) to enable them to be resolved faster, in not a dissimilar fashion to Omni:us and SHift. Sprout.ai says it now has deployments in Europe, South America and APAC.

Niels Thoné, CEO of Sprout.ai, said in a statement: “Sprout.ai’s mission is to revolutionize customer service within global claims automation. Our innovative and industry-leading AI claims engine is poised to solve the current market inefficiencies, allowing insurers to focus on customers in their moments of need.”

Nick Sando, early-stage fintech investor at Octopus Ventures, said: “We are often at our most vulnerable when we submit insurance claims, and it doesn’t help when we then have to wait another month for it to be processed. Sprout.ai empowers insurers to process claims in a fraction of the time, creating much better outcomes for customers when they need it most.”

As we can see, the market is hotting up for this kind of service, so it will be interesting see if these startups end up ‘land-locked’ to their language markets or not. Certainly, I can see M&A opportunities for whoever starts to lead the pack.

StudySmarter books $15M for a global ‘personalized learning’ push

More money for the edtech boom: Munich-based StudySmarter, which makes digital tools to help learners of all ages swat up — styling itself as a ‘lifelong learning platform’ — has closed a $15 million Series A.

The round is led by sector-focused VC fund, Owl Ventures. New York-based Left Lane Capital is co-investing, along with Lars Fjeldsoe-Nielsen (ex WhatsApp, Uber and Dropbox; now GP at Balderton Capital), and existing early stage investor Dieter von Holtzbrinck Ventures (aka DvH Ventures).

The platform, which launched back in 2018 and has amassed a user-base of 1.5M+ learners — with a 50/50 split between higher education students and K12 learners, and with main markets so far in German speaking DACH countries in Europe — uses AI technologies like natural language processing (NLP) to automate the creation of text-based interactive custom courses and track learners’ progress (including by creating a personalized study plan that adjusts as they go along).

StudySmarter claims its data shows that 94% of learners achieve better grades as a result of using its platform.

While NLP is generally most advanced for the English language, the startup says it’s confident its NLP models can be transferred to new languages without requiring new training data — claiming its tech is “scalable in any language”. (Although it concedes its algorithms increase in accuracy for a given language as users upload more content so the software itself is undertaking a learning journey and will necessarily be at a different point on the learning curve depending on the source content.)

Here’s how StudySmarter works: Users input their study goals to get recommendations for relevant revision content that’s been made available to the platform’s community.

They can also contribute content themselves to create custom courses by uploading assets like lecture slides and revisions notes. StudySmarter’s platform can then turn this source material into interactive study aids — like flashcards and revision exercises — and the startup touts the convenience of the approach, saying it enables students to manage all their revision in one place (rather than wrangling multiple learning apps).

In short, it’s both a (revision) content marketplace and a productivity platform for learning — as it helps users create their own study (or lesson) plans, and offers them handy tools like a digital magic marker that automatically turns highlighted text into flashcards, while the resulting “smart” flashcards also apply the principle of spaced repetition learning to help make the studied content stick.

Users can choose to share content they create with other learners in the StudySmarter community (or not). The startup says a quarter (25%) of its users are creators, and that 80% of the content they create is shared. Overall, it says its platform provides access to more than 25 million pieces of shared content currently.

It’s topic agnostic, as you’d expect, so course content covers a diverse range of subjects. We’re told the most popular courses to study are: Economics, Medicine, Law, Computer Science, Engineering and school subjects such as Maths, Physics, Biology and English.

Regardless of how learners use it, the platform uses AI to nudge users towards relevant revision content and topics (and study groups) to keep extending and supporting their learning process — making adaptive, ongoing recommendations for other stuff they should check out.

The ease of creating learning materials on the StudySmarter platform results in a democratization of high-quality educational content, driven by learners themselves,” is the claim.   

As well as user generated content (UGC), StudySmarter’s platform hosts content created by verified educationists and publishers — and there’s an option for users to search only for such verified content, i.e. if they don’t want to dip into the UGC pool.

“In general, there is no single workflow,” says co-founder and CMO Maurice Khudhir. “We created StudySmarter to adapt to different learner types. Some are very active learners and prefer to create content, some only want to search and consume content from other peers/publishers.”

“Our platform focuses on the art of learning itself, rather than being bound by topics, sectors, industries or content types. This means that anyone, regardless of what they’re learning, can use StudySmarter to improve how they learn. We started in higher education as it was the closest, most relevant market to where we were at the time of launch. We more recently expanded to K12, and are currently running our first corporate learning pilot.”

Gamification is a key strategy to encourage engagement and advance learning, with the platform dishing out encouraging words and emoji, plus rewards like badges and achievements based on the individual’s progress. Think of it as akin to Duolingo-style microlearning — but where users get to choose the subject (not just the language) and can feed in source material if they wish.

StudySmarter says it’s taken inspiration from tech darlings like Netflix and Tinder — baking in recommendation algorithms to surface relevant study content for users -(a la Netflix’s ‘watch next’ suggestions), and deploying a Tinder-swipe-style learning UI on mobile so that its “smart flashcards” can to adapt to users’ responses.

“Firstly, we individualise the learning experience by recommending appropriate content to the learner, depending on their demographics, demands and study goals,” explains Khudhir. “For instance, when an economics student uploads a PDF on the topic of marginal cost, StudySmarter will recommend several user-generated courses that cover marginal cost and/or several flashcards on marginal cost as well as e-books on StudySmarter that cover this topic.

“In this way, StudySmarter is similar to Netflix — Netflix will suggest similar TV shows and films depending on what you’ve already watched and StudySmarter will recommend different learning materials depending on the types of content and topics you interact with.

“As well, depending on how the student likes to learn, we also individualise the learning journey through things such as the smart flashcard learning algorithm. This is based on spaced repetition. For example, if a student is testing themselves on microeconomics, the flashcard set will go through different questions and responses and the student can swipe through the flashcards, in a similar way to Tinder. The flashcards’ sequence will adapt after every response.

“The notifications are also personalised — so they will remind the student to learn at particular points in the day, adapted to how the student uses the app.”

There’s also a scan functionality which uses OCR (optical character recognition) technology that lets users upload (paper-based) notes, handouts or books — and a sketch feature lets them carry out further edits, if they want to add more notes and scribbles.

Once ingested into the platform, this scanned (paper-based) content can of course also be used to create digital learning materials — extending the utility of the source material by plugging it into the platform’s creation and tracking capabilities.

“A significant cohort of users access StudySmarter on tablets, and they find this learning flow very useful, especially for our school-age pupils,” he adds.

StudySmarter can also offer educators and publishers detailed learning analytics, per Khudhir — who says its overarching goal is to establish itself as “the leading marketplace for educational content”, i.e. by using the information it gleans on users’ learning goals to directly recommend (relevant) professional content — “making it an extremely effective distribution platform”, as he puts it.

In addition to students, he says the platform is being used by teachers, professors, trainers, and corporate members — ie. to create content to share with their own students, team members, course participants etc, or just to publish publicly. And he notes a bit of a usage spike from teachers in March last year as the pandemic shut down schools in Europe. 

StudySmarter co-founders, back from left to right: Christian Felgenhauer (co-founder & CEO), Till Söhlemann (co-founder); front: Maurice Khudir (co-founder & CMO), Simon Hohentanner (COO & co-founder). Image credits: StudySmarter

What about copyright? Khudir says they follow a three-layered system to minimize infringement risks — firstly by not letting users share or export any professional content hosted on the platform.

Uploaded documents like lecture notes and users’ own comments can be shared within one university course/class in a private learning group. But only UGC (like flashcards, summaries and exercises) can be shared freely with the entire StudySmarter community, if the user wants to.

“It’s important to note that no content is shared without the author’s permission,” he notes. “We also have a contact email for people to raise potential copyright infringements. Thanks to this system, we can say that we never had a single copyright issue with universities, professors or publishers.”

Another potential pitfall around UGC is quality. And, clearly, no student wants to waste their time revising from poor (or just plain wrong) revision notes.

StudySmarter says it’s limiting that risk by tracking how learners engage with shared content on the platform — in order to create quality scores for UGC — monitoring factors like how often such stuff is used for learning; how often the students who study from it answer questions correctly; and by looking the average learning time for a particular flashcard or summary, etc.

“We combine this with an active feedback system from the students to assign each piece of content a dynamic quality score. The higher the score is, the more often it is shown to new users. If the score falls below a certain threshold, the content is removed and is only visible to the original creator,” he goes on, adding: “We track the quality of shared content on the creator level so users who consistently share low-quality content can be banned from sharing more content on the platform.”

There are unlikely to be quality issues with verified educator/publisher content. But since it’s professional content, StudySmarter can’t expect to get it purely for free — so it says it “mostly” follows revenue-sharing agreements with these types of contributors.

It is also sharing data on learning trends and to help publishers reach relevant learners, as mentioned above. So the information it can provide education publishers about potential customers is probably the bigger carrot for pulling them in.

“We are very happy to say that the vast majority of our content is not created or shared on StudySmarter for any financial incentive but rather because our platform and technology simply make the creation significantly easier,” says Khudir, adding: “We have not paid a single Euro to any user on StudySmarter to create content and do not intend to do so going forward.” 

It’s still early days for monetization, which he says isn’t front of mind yet — with the team focused on building out the platform’s global reach — but he notes that the model allows for a number of b2b revenue streams, adding that they’ve been doing some early b2b monetization by working with employers and businesses to promote their graduate programs or to support recruitment drives. 

The new funding will be put towards product development and supporting the platform’s global expansion, per Khudir.

“We’ve run successful pilots in the U.K. and U.S. so they’re our primary focus to expand to by Q3 this year. In fact, following a test pilot in the U.K. in December, we became the number one education app within 24 hours (ahead of the likes of Duolingo, Quizlet, Kahoot, and Photomath), which bodes well!” he goes on. 

“Brazil, India and Indonesia are key targets for us due to a wider need for digital education. We’re also looking to launch in France, Nordics, Spain, Russia and many more countries. Due to the fact our platform is content-agnostic, and the technology that underpins it is universal, we’re able to scale effectively in multiple countries and languages. Within the next 12 months, we will be expanding to more than 12 countries and support millions of learners globally.”

StudySmarter’s subject-agnostic, feature-packed, one-stop-shop platform approach sets it apart from what Khudir refers to as “single-feature apps”, i.e. which just help you learn one thing — be that Duolingo (only languages), or apps that focus on teaching a particular skill-set (like Photomath for maths equations, or dedicated learn-to-code apps/courses (and toys)). 

But where the process of learning is concerned, there are lots of ways of going about it, and no one that suits everyone (or every subject), so there’s undoubtedly room for (and value in) a variety of approaches (which may happily operate in parallel). So it seems a safe bet that broad-brush learning platforms aren’t going to replace specialized tools — or (indeed) vice versa.

StudySmarter names the likes of Course Hero, StuDocu, Quizlet and Anki as taking a similar broad approach — while simultaneously claiming they’re not doing it in “quite the same, holistic, end-to-end, all-in-one bespoke platform for learners” way.  

Albeit, some of those edtech rivals are doing it with a lot more capital already raised. So StudySmarter is going to need to work smart and hard to localize and grab students’ attention as it guns for growth far beyond its European base.

 

Pivoting from offline into virtual events for enterprises nets Tame a $5.5M Seed round

In March 2020, Tame had a digital event suite for offline corporate events. But with the pandemic hitting, it did a hard pivot into providing a highly customizable virtual events platform, primarily used by companies for their sales events. The result is that it has now raised a seed round of $5.5m, a large round for its native Denmark, led by VF Venture (The Danish Growth Fund), along with byFounders and and three leading angels: Mikkel Lomholt (CTO & Co-founder, Planday); Sune Alstrup (Ex-CEO & Co-founder, The Eye Tribe); and Ulrik Lehrskov Schmidt.

The investment will be used to scale from 20 to 60 new employees across Copenhagen, London, and Krakow; expand to the UK, and grow revenues.

Founder Jasenko Hadzic, CEO and Co-founder said the pivot to virtual grew revenues “by 700% organically last year. No sales. No marketing. Organically. Therefore, Tame sees a huge opportunity and is going all-in on expanding aggressively to position itself as a market leader.”

Jacob Bratting Pedersen, Partner, VF Venture, said: “At VF Venture, we want to help develop and drive innovation. The corona crisis has brought digital momentum with it, and here Danish IT entrepreneurs have the opportunity to seize that agenda and bring Danish technology and expertise to the global market. Tame is a really good example of that. Tame has great potential to create a strong, global business for the benefit of growth and jobs in Denmark.”

Hadzic himself is already a success story – he eventually made it into the tech industry after arriving in Denmark as a child refugee from war-torn Bosnia during the Yugoslavian civil war.

But don’t mistake Tame for a Hopin. Hadzic told me: “We’re not interested in getting TechCrunch Disrupt as a customer or, or the big trade fairs. We just want to focus on those enterprise companies which we sell to a marketing department or an HR department.”

London’s Stride VC raised second $138.6M seed fund, hunts for third partner

Stride VC, a London-based seed investment fund, has raised its second fund, which will be £100M ($138.6M) – identical to its first fund. The fund will invest primarily in London startups but also look at select European opportunities.

The breakup of the LPs in the fund is 10% fund of funds, 60% other institutional, 28% family offices, and 10% individuals. Stride said some 80% of this new fund came from returning LPs, and 20% from two new unnamed institutional investors. Stride does not have any public or government investment.

Investors include the founders of Cazoo, King, Pillpack, Dott, and institutional investors such as Delin Ventures, Draper Esprit, Mubadala, and CNP (Groupe Frere).

Stride Founder Fred Destin told me that while the fundraising was planned for June, the two new unnamed institutional investors “reached out in January, and confirmed their intention to invest around mid-Feb after a quick diligence process. We weren’t planning to raise until June. We secured all allocations March 12 and closed 31 March. Breakneck speed for a fund,” he said.

Stride has also gone through some personnel additions. The successful podcaster about VC, Harry Stebbings, who co-founded Stride with Destin, departed amicably in early February to set up his own fund. Cleo Sham is the new partner joining full-time in June, as announced on Twitter. In August last year it lost its Paris-based partner, Pia d’Iribarne, who has set up Newwave.vc.

Destin also told me he will be looking for a new third partner for the fund, and two more team members: “I’m mainly looking for exceptional talent. If they don’t fit some kind of mold, or don’t have an MBA and speak like MBA people, even better. What I mean is I don’t want people who just look for your references.” But, he added, “don’t @ me on Twitter about it!”

Shane Burgess has joined to head up talent; Pietro Invernizzi, formerly of The Family, runs the ‘First Check Programme’.

Destin says Stride remains “firmly committed to Seed”, usually leading or co-leading a funding round. But that it will also expand from pre-seed funding with £250K checks to sometimes larger investments in companies like Huboo where it invested £4.5M. Its core investment program ranges from £750K to £4M (usually £2M) and lower rounds from £250K.

Destin describes the fund as “artisan venture capital” where it invests in “small batches”. He said: “We understand startups are chaotic and we embrace the chaos. We value trust over everything else. We are not about control; we’re about impact. We’d rather do the work than talk about it, hence the minimal website.”

Over a call, he added: “We don’t take board seats, we prefer to provide something to the founders that’s meaningful to them. So we’ll do ad hoc things, such as a strategy session, help them recruit someone, pointed interventions. The founders seem to really like it.”

Stride’s Fund I has backed 29 companies so far. Perhaps the best know is Cazoo. Although much of its portfolio is undisclosed and defies ‘themes’ it’s known to have invested in:

  • API Infrastructure: STRAPI, Impala, WeGift
  • Ecommerce: Cazoo, Front of the Pack
  • SaaS: SEDNA, Cord, Unibuddy, WeGift

Destin told me: “We don’t necessarily think it’s helpful for companies to be announcing what they do and what they’ve raised. And for ourselves, we don’t need it to flatter our ego. A lot of our companies are happily operating below the radar.”