Sept. 4 (Bloomberg) -- Desire2Learn Inc., an online-education startup from Research In Motion Ltd.’s birthplace of Waterloo, Ontario, raised $80 million in venture funding, aiming to prove that the area is more than just a BlackBerry town.
New Enterprise Associates Inc., a venture firm with offices in Menlo Park, California, and Omers Ventures, the investing arm of the Ontario Municipal Employee Retirement System, led the financing, according to a statement today.
Desire2Learn plans to use the money to hire more staff and step up its marketing and research spending. The company already delivers online teaching tools to 700 customers and 8 million students, John Baker, Desire2Learn’s founder and chief executive officer, said in an interview.
“The partners we’re working with are believers in helping to transform the educational experience in the U.S.,” he said.
Desire2Learn joins OpenText Corp. in providing a second act for Waterloo, which is suffering through thousands of job cuts at RIM. The BlackBerry maker has been paring its operations as sales plunge and its market share shrinks. CEO Thorsten Heins is counting on a new lineup of phones, due next year, to reverse the company’s fortunes.
OpenText, a 20-year-old maker of business software, saw revenue grow 17 percent to $1.21 billion in its most recent fiscal year and employs more than 4,500 workers worldwide. Desire2Learn has about 560 employees, up from 350 at the beginning of this year. It plans to add at least 150 more by the end of the year, Baker said.
For NEA, which recently completed a $2.6 billion fund, the deal continues its focus on the online-education market. Desire2Learn works with elementary schools, colleges and adult-continuing education across the U.S., including New York.
Desire2Learn is already profitable, Baker said. The cash injection, its first round of funding, will allow the company to ramp up its expansion, he said.
“We didn’t raise the money because we needed it but because we wanted to accelerate our growth,” Baker said. “We were a profitable high-growth company prior, and we’re hoping to remain a profitable high-growth company going forward.”
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