Achieve3000 Acquires Literacy Startup Actively Learn

Mergers and Acquisitions

Achieve3000 Acquires Literacy Startup Actively Learn

By Tony Wan     Oct 2, 2018

Achieve3000 Acquires Literacy Startup Actively Learn

Stuart Udell has overseen nearly two dozen mergers and acquisitions across his career in the education industry, which spans stints at Penn Foster, Catapult Learning and K12 Inc. Now, just a few months into his current role as CEO at Achieve3000, Udell is already adding another company to the list.

Achieve3000, a provider of online reading and literacy tools, announced it has acquired Seattle-based Actively Learn, which also provides a suite of online reading materials and instructional supports aimed at helping students build literacy and critical-thinking skills.

Founded in 2000, Achieve3000 offers online literacy tools for a range of students, from English language learners in schools to working adults. The company offers reading materials that are rewritten at 12 different levels in English (and eight levels in Spanish), so that students can all engage in the same content regardless of their reading skills.

The company claims its products are used by more than 3 million users across 9,000 schools around the world. And the U.S. market makes up 95 percent of its users. Equally important: The company is cashflow positive, currently generating an estimated $100 million in revenue each year. (Stuart adds Achieve3000 is “nicely profitable.”)

For its first 18 years, Achieve3000 was led by its founder, Saki Dodelson. In 2015, the company was acquired by private equity firm Insight Venture Partners. Dodelson stepped down as CEO in April 2018 and was succeeded by Udell who took over the job in May. “Almost immediately,we started looking at inorganic growth opportunities, and put out offers and outreach to bankers,” Udell tells EdSurge.

What made Achieve3000’s offer attractive was a common interest in driving measurable student growth in literacy skills, says Jay Goyal, co-founder and CEO of Actively Learn. According to Evidence for ESSA, a group headed by Johns Hopkins researchers, Achieve3000 has shown “significant positive effects” in a study of sixth- and ninth-grade students using the product.

“Through this deal, we’ll make a bigger impact,” says Goyal. At a practical level, he adds, “we wanted access to a larger sales team for distribution.”

Actively Learn’s library includes 30,000 digital texts on subjects covering topics across English language arts, science and social studies subjects. Embedded within each text are notes, videos, practice questions and other multimedia learning materials. As the company’s name implies, its tools aimed at help teachers to get students deeply engaged in the materials and build critical-thinking skills through discussion and open responses.

The deal pairs two companies in pursuit of a common goal through different, but complementary assets, says its chief executives. Where Achieve3000’s library skews toward nonfiction and informational materials (such as news articles), Actively Learn focuses heavily on fictional texts, including literary classics. Actively Learn also offers tools that allow teachers to upload their own content for use in the platform.

Financial terms of the deal were not disclosed. Udell only offered that Achieve3000 “paid a healthy price,” noting that Actively Learn received other competing offers from other literacy companies. Educated Ventures, a Chicago-based education investment and advisory firm in the education industry, helped facilitate the deal.

Actively Learn will retain its brand as a subsidiary of Achieve3000, and its 22 employees will join the new owner. After this deal, Achieve3000’s team will number over 400 employees.

For the time being, users of both products should not expect any changes. “We’ll do long-term road planning and build some hooks between the products,” says Udell. “We have lots of teachers who want to pair fiction with nonfiction texts, and users who want to use the platform at home offer differentiated instruction.”

Actively Learn was founded in 2012, at a time when other startups also launched competitive offerings in the online literacy offerings. Newsela, which provides leveled reading practice for news articles, is still growing at a steadily clip. But the market has not been kind to other startups. Curriculet closed shop in 2016 before its assets were acquired by a nonprofit last year; LightSail underwent multiple rounds of layoffs before selling to a private equity firm earlier this year.

Relative to its competitors, Actively Learn raised a relatively modest sum of investment capital. The company received $1 million in equity funding, and another $1.4 million in grants from the Bill and Melinda Gates Foundation and National Science Foundation (Disclosure: EdSurge has received grant funding from the Bill and Melinda Gates Foundation). Goyal says Actively Learn has been used by more than 1.5 million students.

Amidst the noise and competition, Goyal says what has kept his team focused is “not chasing the latest fads” in the literacy market. Among them, he recalls, is the push towards providing content and features that focus on providing independent reading practice for students. “Unless the teacher is an active participant in the literacy experience, the learning for students won’t happen to the extent that it should,” he adds.

“We are not a reading-and-answering questions kind of company,” states Goyal. When it comes to improving students’ literacy, “teachers need to be able to see the student’s thinking in real-time, and provide instructional support and feedback on writing and revisions.”

This deal marks the second acquisition for Achieve3000, following its purchase in 2015 of Smarty Ants, a literacy tool tailored for students in grades preK to 2. Expect the company actively pursue other acquisitions, too, as Udell says his team is also looking for math and writing tools to add to its growing portfolio.

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