
When Kahoot,
the startup that operates a popular platform for user-generated educational
gaming, raised $15 million in October of this year, we mentioned that Disney
had a stake in the company by way of the Disney Accelerator, and it had an
option to become a larger shareholder if it exercised its warrants.
Now with
some 60 million games on its platform, today Kahoot announced that this has
come to pass: Disney is taking that option, working out to a four percent stake
in the startup at a $376 million valuation, based on the current share price of
28 Norwegian kroner (shares of Kahoot are traded on the Norway OTC as an
unlisted stock). It makes Disney’s stake in the app worth about $15 million,
although the actual value of the warrants Disney is exercising is smaller than
this.
Kahoot
declined to comment for this story beyond the investment announcement posted on
the exchange, but for some context, this is a nice bump up in Kahoot’s
valuation from October, when it was at $300 million. Other sizeable and notable
investors in the company include Microsoft and Nordic investor Northzone (which
has backed Spotify and other significant startups out of the region).
On the part
of Disney, it’s not clear yet whether its Kahoot stake will lead to more Disney
content on the platform, or if this is more of an arm’s length financial
backing. The two have already put Lucasfilm content on Kahoot and there may be
more to come. The entertainment giant has made nearly 50 investments by way of
its accelerator program. In some cases, it increases those to more significant
holdings, as it has in the case of HQ Trivia, Sphero, Epic Games (the company
behind Fortnite, a very different take on gaming compared to Kahoot), Samba TV
and more.
Disney has
been dabbling in both gaming and education as vehicles to market its many
brands, and also as salient businesses of their own — no surprise, given that
one primary focus for it has been on younger consumers and their needs and
interests.
In some
cases, it seems it may use strategic investments to do this, for example with
Disney-themed nights on HQ Trivia. Interestingly, although it doesn’t appear
that Disney invests in the Indian educational app Byju’s — which itself just
raised $300 million — the educational app, which has been described as
“Disneyesque,” teamed up with Disney in October to develop co-branded
educational content, another sign of Disney’s interest in the field.
Kahoot has
been around in one form or another since 2006 — originally as a gamified
education concept called Lecture Quiz before launching as Kahoot in 2013 — but has
seen a sharp rise in users in the last few years on the back of strong growth
in the U.S. — benefiting from a wider trend of educators creating content on
mediums and platforms that they know students already use and love.
Kahoot’s
last reported user numbers come from January, when it said it had 70 million
registrations, but its CEO and co-founder Åsmund Furuseth told TechCrunch in
October that it was on track to pass 100 million by this month. Kahoot didn’t
release updated figures today, but my guess is that Kahoot has hit its target
(maybe even passed it), and that is one reason Disney decided to exercise its
investment option.
Kahoot is
not your average gaming company: some games are created in-house, but the
majority of them are user-generated — “Kahoots” in the company’s parlance —
created by the people setting the learning tasks or those trying to create a
more entertaining way of remembering or learning something. These, in turn,
become games that potentially anyone can use to learn something (hence the
name).
There have
been about 60 million of these games created to date, a pretty massive amount
considering this is educational content at the end of the day.
Kahoot has
developed its business along two avenues, with games for K-12 students and games
for business users, building training and other professional development in a
wrapper of gamification to engage workers more in the content.
In practice,
about half the games in Kahoot’s catalogue are available to the public and half
are private, with the split roughly following the company’s business model:
games made for corporate purposes tend to be kept private, while the
educational ones tend to be made publicly available. The business model also
follows that split, with Kahoot’s business users accounting for the majority of
its revenue, too.
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