Knewton has raised $51 million to accelerate growth in the coming year.
Raising another round of funding wasn’t an entirely obvious decision for us. We had a couple of profitable months at the end of 2013, and expected to be profitable all of 2014. But Knewton has lofty goals. We want to bring predictive analytics and personalized recommendations to publishers, schools, and, ultimately, students around the globe. We want to make it possible for any content creator to create high-quality adaptive experiences. We want to launch a public portal so that anyone anywhere can use Knewton to learn anything.
Every entrepreneur longs for the day when the company becomes profitable. Profitability means freedom and security, and maybe even an end to sleepless nights. But, for Knewton, this happens to be the exact moment we want to step hard on the gas. We want to invest in our platform and increase headcount dramatically in the next two years.
When we decided to raise this round, we called a few investors who had previously expressed interest in Knewton. We decided to go with Atomico, an international investment firm led by Skype co-founder Niklas Zennström. There were several reasons we chose Atomico to lead the round:
- Strong personal chemistry between our team and theirs
- Strong global presence in Europe, Asia, and Latin America — we are doing a lot of things in Europe right now
- They have staff, whom we can borrow for local expertise and connections, in each of the numerous international regions we are focused on
- They are founders who have experience scaling tech companies from inception to global platform
We also decided to make some room for a fund that focuses on edtech – Michael Moe’s GSV Capital. I’ve known Mike for years and felt he would add value during this rapid growth phase of ours. Atomico and GSV were joined by our existing investors – Accel Partners, Bessemer Venture Partners, First Round Capital, FirstMark Capital, and Founders Fund — along with debt financing by Silicon Valley Bank.
Knewton will use this capital to invest significantly in product enhancements and international growth. While this new funding wasn’t strictly necessary, the idea of growing aggressively now was too appealing to pass up.
For more on the announcement, check out this blog post from Atomico.