Kahoot raises $28M for its user-generated educational gaming platform, now valued at $1.4B

Ingrid Lunden and Natasha Mascarenhas

As schools stay closed and summer camp seems more like a germscape than an escape, students are staying at home for the foreseeable future and have shifted learning to their living rooms. Now, Norwegian educational gaming company Kahoot -- the popular platform with 1.3 billion active users and over 100 million games (most created by users themselves) -- has raised a new round of funding of $28 million to keep up with demand.

The Oslo-based startup, which started to list some of its shares on Oslo’s Merkur Market in October 2019, raised the $28 million in a private placement, and said it also raised a further $62 million in secondary shares. While it’s not a privately held startup in the traditional sense -- the Merkur Market is essentially like a stepping stone between being a fully private startup and a publicly-listed company, more explanation here -- Kahoot still raises rounds from VCs and counts a number of them on its cap table. In this latest raise, the new equity investment included participation from Northzone, an existing backer of the startup that is a big name in Nordic investing, and CEO Eilert Hanoa.

At market close today, the company’s valuation on the Merkur was $1.39 billion (or 13.389 billion Norwegian krone).

Existing investors in the company include Disney and Microsoft, and the company has raised $110 million to date.

Kahoot launched in 2013 and got its start and picked up most of its traction in the world of education through its use in schools, where teachers have leaned on it as a way to provide more engaging content to students to complement more traditional (and often drier) curriculum-based lessons. Alongside that, the company has developed a lucrative line of online training for enterprise users as well.

The global health pandemic has changed all of that for Kahoot, as it has for many other companies that built models based on classroom use. In the last few months, the company has boosted its content for home learning, finding an audience of users who are parents and employers looking for ways to keep students and employees more engaged.

The company says that in the last 12 months it had active users in 200 countries, with more than 50% of K-12 students using Kahoot in a school year in that footprint. On top of that, it is also used in some 87% of “top 500” universities around the world, and that 97% of Fortune 500 companies are also using it, although it doesn’t discuss what kind of penetration it has in that segment.

It seems that the coronavirus outbreak has not impacted business as much as it has in some sectors. According to the midyear report it released earlier this week, Q2 revenue is expected to be $9 million, 290% growth compared to last year and 40% growth compared to the previous quarter, and for the full year 2020, it expects revenue between $32 million and $38 million, with a full IPO expected for 2021.

As it has been doing even prior to the coronavirus outbreak, Kahoot has also continued to invest in inorganic growth to fuel its expansion. In May, it acquired math app maker DragonBox for $18 million in cash and shares. The company also runs an accelerator, Kahoot Ignite, to spur more development on its platform.

However, Hanoa said that Kahoot is shifting its focus to now also work with more mature edtech businesses.

“When we started out, we were primarily receiving requests on early stage products,” he said. “Now we have the opportunity to consider mature services for either integration or corporation. It’s a different focus.”

Update: A previous version of this story said that DragonBox was acquired in March. It was acquired in May. The story has been updated to reflect this change.