Desire2Learn Inc., a Canadian education-technology startup, raised $85 million in its second round of funding and plans to use the proceeds to develop its cloud-based learning software and speed international expansion.
Columbus Nova Technology Partners, Graham Holdings Co., Four Rivers Group and Aurion Capital Management Inc. contributed to the round, which was led by an unnamed institutional asset manager, Desire2Learn said in a statement. It’s the second fundraising for the company, based in BlackBerry Ltd.’s hometown of Kitchener-Waterloo, Ontario, after raising $80 million in 2012.
The market for education technology and online teaching tools is swelling, and Desire2Learn plans to add at least 80 new employees to its workforce of 800, John Baker, founder and chief executive officer, said in an interview. Desire2Learn, which operates the Brightspace website, has more than 1,100 clients, including grade schools, colleges and corporations.
“We’re seeing very rapid growth in Europe, we’ve seen triple-digit growth in Latin America and Asia Pacific. In terms of new accounts we’re seeing great growth basically everywhere we look,” Baker said. Desire2Learn is prioritizing growth in “key hubs,” including Brazil, Mexico, the U.S. and Singapore, he said.
The company plans to add new directors to its board, though they won’t necessarily be from its investors. Baker, who said in 2012 that the company was already profitable, declined to comment on Desire2Learn’s revenue. The company’s value is “up significantly” since the last round of funding, he said, declining to elaborate.
Previous investors New Enterprise Associates Inc. and Omers Ventures also contributed to the financing round. The asset manager that led the funding is a U.S. bank, according to Baker.
Desire2Learn is part of a crop of Canadian startups including Hootsuite Media Inc. and Shopify Inc. reinvigorating Canada’s technology scene in the wake of BlackBerry’s decline.
John Ruffolo, who’s invested in all three companies through Omers, the venture capital arm of the Ontario Municipal Employees Retirement System pension fund, said in March they should be ready to go public within two years.
Baker said there are no definitive plans for an initial public offering of Desire2Learn.
“We’re head-down focused on building a great company,” he said.
More than $800 million has been invested in education technology companies globally this year, compared with less than $80 million in 1999, when Desire2Learn was started, Baker said.
“In the past it used to be considered a nice thing to do, to go online or support blended learning, but now it’s a competitive necessity for schools and universities,” Baker said. “It’s no longer an option.”