Edtech startup BEGiN raised $50M in Series C funding for its early learning platform HOMER, which will launch a comprehensive new program next week. Strategic investors LEGO Ventures and Sesame Workshop participated in the round. Liquidity Capital pitched in an additional $25M in trajectory-based funding for growth.
HOMER historically focused on reading with HOMER Reading and HOMER Stories, which comprise the top reading program in Apple’s App Store for children 5 and below. The company says the program can increase early reading scores by up to 74% in just 15 minutes of use a day.
The new funding will help BEGiN launch “the industry’s first fully comprehensive early learning program,” combining reading, math, creativity, socio-emotional learning, and critical thinking skills. The program is delivered across digital, physical, and in-person learning experiences.
HOMER will co-develop curriculum with partners like Sesame Workshop, and Gymboree will serve as a global distribution partner. Steve Youngwood, President of Media & Education and COO of Sesame Workshop, Jyoti Parikh, head of Brand, Insights & Communication at LEGO Education, Xinkai Chen, Group SVP of Gymboree Global Education Group, and Michael Cohn, Partner at GSV will join BEGiN’s board. Siddharth Mathur, former Chief Strategy and Development Officer for Mattel and President of Babytree, will head the board as the new executive chairman.
The coronavirus pandemic has created a learn from home shift that has Chegg (CHEGG) shares up 91% YTD, 2U (NASDAQ:TWOU) up 43%, and K12 (NYSE:LRN) up 31%. HOMER stands out in both the young age of its target audience and the largely independent nature of the learning experience.
The pandemic-related school and preschool closures have increased HOMER annual subscriptions by 280% compared to last year. Website subscriptions are up 230%, and children are accessing 30% more lessons. The closures have put early childhood education largely back in the hands of parents, who are often also working from home. HOMER’s new program could provide overtaxed parents with a guiding hand.
“Parents today are overwhelmed with too many choices to help their children learn critical skills such as reading or math. HOMER aims to alleviate some of the stress that families are facing by offering a comprehensive, expert-designed program focused on both school and life skills that grows with a child and is personalized to their specific age, stage and interests. HOMER is the only solution in the industry that delivers learning across digital, physical, and in-person experiences and enables children to choose the way they would like to learn,” BEGiN CEO and co-founder Neal Sheony tells Seeking Alpha.
Sheony notes that 80% of the time, kids can use the curriculum independently, which “offers parents some precious moments to themselves, while trusting their kids are both learning and having fun.”
Socio-emotional learning and critical thinking skills were important parts of building the new program’s structure.
“Specifically, socio-emotional learning is more important than ever given the epidemic of anxiety and depression that many children experience in an increasingly complex world. Our hope is to give children the tools to become the most confident, empathetic, kind, and optimistic versions of themselves and we are working with beloved brands such as Sesame Workshop to do so.”
LEGO Ventures was founded in 2018 and the VC arm’s portfolio currently only includes 11 investments. What inspired LEGO to join up with HOMER?
Rob Lowe, Head of Value Creation at LEGO Ventures, tells SA, “ We believe that HOMER is bringing a playful, personalized edge to digital learning and their plans to expand their system into new areas is very exciting to us as we look to explore new iterations of the “Learning through Play” idea.”
Lowe says HOMER “has a chance to become one of the major Education platforms for parents and kids to learn and play together” and that LEGO Ventures can offer support “both through investment but also with the skills, knowledge, and insight within the LEGO entities.”
(Image credit: HOMER)
Other top VC deals of the week:
- SoftBank (OTCPK:SFTBF,OTCPK:SFTBY) Vision Fund led the $319M Series C for biotech XtalPi, which uses its AI-backed drug discovery process to help industry giants like Pfizer identify and learn about promising molecules. The funds will help build up the existing operations with more tech and computing power.
- Vroom’s (NASDAQ:VRM) overseas competitor Cazoo raised $311M in equity funding at an over $2.5B valuation. General Catalyst, D1 Capital Partners, and funds managed by Fidelity and Blackrock led the round for the used car e-commerce platform. The raise comes as more people are avoiding public transportation due to the pandemic.
- E-commerce solution and strategy builder VTEX raised $225M at a $1.7B valuation in a round led by Tiger Global and Lone Pine Capital with SoftBank among the other backers. VTEX clients include Walmart and Sony. Sales are up 114% this year and $8B in GMV was processed over its platforms.