Classroom, a virtual classroom that integrates exclusively with Zoom, today announced that it has raised $105 million in financing led by the SoftBank Vision Fund II. The 10-month-old startup has raised a total of $146 million in venture funding so far known, which eclipses the amount of capital raised by founder Michael Chesson’s now-public previous company Blackboard.
Despite its infancy, the class is fast approaching unicorn status, confirming that it currently sports a post-money valuation of $804 million. Other investors in the class include GSV Ventures and Emergence Capital, which led a pre-seed round of startups, as well as top US edtech funds including Reach Capital, Ullu Ventures, Insight Partners and Learn Capital.
Class, formerly Class for Zoom, uses management and instruction tools to enhance the video conferencing call experience. Since launch, Class has notably integrated with the videoconferencing giant, which rose to prominence as a household name during the early months of the pandemic and remains a mainstay in synchronous communications. It’s part of a wave of Zoom alternatives and enhancements that have launched over the past year — and have more than 250 customers to date.
Today’s announcement from the SoftBank Stamp of Approval means that Class is making two statements: one, it is taking global expansion seriously, and second, it is indicating that it is just one for Zoom. The acquisition target is not visible.
Globalization of EdTech
SoftBank likes to back what it sees as a “winner” in a sector and spends millions in it to help it gain a foothold in international markets. Earlier this month, the Japanese conglomerate invested millions in Clearco, formerly ClearBank, to help develop alternative financing startups in new geographies beyond Europe, Canada and the United States. At this point, I think SoftBank is looking for opinionated startups that are naturally drawn to international, and then fund the heck of them.
The class is no different. Chesson explained how the international demand for the product has been high since the announcement of Class’s seed round. Schools in Europe, the Middle East, and Japan arrived before classes began general availability. Now, with Class’s general availability on Mac, Windows, iOS, Android and Chromebooks, Chasson is focusing on converting customers on the waitlist.
The class’s international expansion will see it build local teams in target regions such as the UK and Ireland, EMEA, Latin American and APAC. The startup is hoping to add 100 new team members worldwide to its already 200-person team.
Chasson estimates that 65% of the funding will lead to internationalization of the class and the remainder will be allocated to product development. One criticism of Class is that the platform provides the same experience to a second grade class as it does to a higher-education class. Chasson agreed that the startup needed to add more exclusivity to its product – perhaps gamification for the K-12 and test proctoring for the higher version – in future versions.
“V1 gives you what we believe is the bare minimum you need to teach online,” he said, noting features like tests and grade trackers. “Right now, we need a product that works well in every market, and in the future we will make improvements that are specific to the markets.”
And so far, users are paying for it. Klass said its revenue grew nearly 4X quarter over quarter in 2021.
friends with zoom benefits
While there’s a nagging effect around large rounds and attractive valuations, Class’s recent growth could quell the question of whether it’s preparing itself for an eventual acquisition by Zoom.
When ClearTips first spoke to Chasson, he said that Zoom is focused more on scale than the kind of in-depth expertise that Class wants to provide.
Still, the company was with Zoom’s early investors and acted as a Zoom reseller in several markets, suggesting that a perception consolidation down the road wouldn’t be too wild. After today, however, it is clear that Klass sees itself as a standalone business. Startups don’t just raise nine-figure funding rounds from knowledgeable investors unless they have ambitions to grow bigger than a consolidation.
Going forward, Classes can use some of those millions to establish its brand as the go-to option for schools or institutions that want a classroom-friendly Zoom environment. On the careers page per category, marketing is its most aggressive hiring focus right now. The company has six open roles on the marketing team, including an International Marketing Manager and a Content Marketing Manager.
The class’s closest competitor is Angeli, which last raised a $33 million Series A in May 2021. Angeli’s co-founder and COO, Jamie Farrell, left for another edtech startup in February 2021, and the company doesn’t hire too aggressively. Through online job boards. While the details are anecdotal, Angeli may now face stiff competition in terms of bandwidth and marketing as KLASS gains new capitalization – and a growing team of global employees.