As LightSail Education charts a new course, the New York City-based developer of K-12 literacy software has had to make some difficult, unpleasant decisions over the holidays, EdSurge has learned.
Last September, the company tapped Good Harbor Partners, a Boston firm that advises on business transactions in the education technology industry, to explore strategic and financial opportunities for the company. Lightsail executives met with roughly a half-dozen companies to gauge their interest, according to Gideon Stein, LightSail’s founder and former chief executive.
Ultimately, LightSail decided to sell to Agile Investment Group, an international private equity firm.
That decision carried serious consequences for the staff. In an email, Stein wrote that “in anticipation of consummating the transaction with Agile Investment Group at the beginning of 2018, we did make a number of difficult layoffs given overlaps with Agile’s existing sales, operations and product teams.”
Multiple sources confirmed to EdSurge that these layoffs happened across two rounds over the 2017 holiday season. The first round, which impacted about 15 employees, happened in late November. That was followed by another round that axed another 10 staff around Christmas.
The cuts affected staff and senior-level directors alike. The marketing, sales and product teams were slashed entirely, leaving behind a handful of staff in the operations and instructional-support roles.
LightSail had approximately 45 employees before these layoffs, according to Stein. He and Ryan Alexander, the company’s president, are no longer involved in running the company.
Founded in 2012, LightSail Education offers a digital library of reading materials, along with annotation features and quizzes that test for a student’s understanding of the content. For a base subscription price of about $10 per student, educators and students could access to a library of public-domain digital content, as well as news articles through a partnership with The Washington Post.
The company also had a deal with Baker and Taylor, a major book distributor, that allowed educators to purchase additional reading content for students. Yet sources said that the cost of purchasing those digital copies were not much cheaper than the print version, and proved to be too costly for some schools.
LightSail was hardly alone in building a digital literacy platform. At least two other competing startups launched in the same year: Curriculet and Newsela. The former struggled to build a viable business model and briefly shut down before it was acquired by a nonprofit. Newsela is still around. The literacy market is further crowded with older companies, including Renaissance Learning and Achieve3000, that also provide digital reading materials and assessment tools.
Lightsail has raised more than $23 million in funding from investors that include Scott Cook, the co-founder of Intuit, and The Bezos Family Foundation (run by the parents of Amazon CEO and founder, Jeff Bezos). In 2016, the company had upwards of 55 full-time employees and claimed that more than 700 schools, serving roughly 250,000 students, were paying customers.
Without Stein and Alexander, and with a barren “team” page on its website, it’s unclear who now runs the company. The only name offered in the press release is Eric Solat, whose current title is “Vice President of Sales in North America” at LightSail, per his LinkedIn profile. Stein said there are roughly 45 employees working on LightSail.
Stein added that Agile will continue working to refine the LightSail product, and rolled out a HTML5 version of the program that was recently deployed in school districts. (The company initially developed LightSail for iPads before adding compatibility with Chromebooks and Android devices.) It is also working on parent-facing features on the LightSail platform. Stein did not share any details about how many schools and districts use LightSail today.