Oslo-based gamified education technology startup Kahoot has been acquired in a $1.7 billion acquisition led by global financial firm Goldman Sachs. This may seem incredible if you know what Kahoot is, a simple Edtech platform offering online live quizzes, but $1.7 billion is only half of its peak valuation.
Kahoot Acquired for 35 NOK Per Share, Led By Goldman Sachs
According to a blog post, Kahoot announced that its educational technology platform, Edtech, had been purchased by Goldman Sachs Asset Management – the venture firm of the financial giant.
— Jin-Soo Huh (@JinSooDHuh) July 14, 2023
This significant deal also involves long-term investors General Atlantic, Kirkbi Invest, and Glitrafjord.
The acquisition was finalized with an offer price of 35 Norwegian Kroner (NOK) per share, encompassing all issued and outstanding shares of the Edtech service.
This put the total acquisition value at $1.7 billion or 17.2 billion NOK in local currency. Kahoot puts its total shares at 492,836,049.
To effect the purchase, the Goldman Sachs Asset Management firm made the offer through a Norwegian company named Kangaroo BidCo AS which was created for that particular purpose.
Speaking on the recent development, CEO Eilert Hanoa espoused the integral role Kahoot has played in the learning journeys of its millions of users in 200+ countries.
According to Hanoa, Kahoot has focused on making learning an awesome experience for its users by driving billions of learning interactions from its Oslo headquarters.
Hanoa also highlighted that the recent Goldman Sachs Asset Management acquisition would further the Kahoot mission. Additionally, it would make it easier to promote education for millions of learners worldwide.
The offer by Goldman Sachs Asset Management and other investors represents a premium value of 53.1% compared to Kahoot’s share closing price on the Oslo Stock Exchange. This occurred on May 22, 2023, when it traded at 22.86 NOK.
Additionally, the offer price represents 33.3% of the three-month weighted average price of 26.36 NOK as of July 13, 2023, and 62.1% of the six months value of 21.59 NOK for the same period.
While this might be perceived as good news, the company’s fortunes have declined sharply as the world returns to the classrooms.
At the height of the COVID-19 pandemic, Kahoot traded at 109 NOK per share and raised over $500 million from eager investors like SoftBank and Creandum during this period.
The platform also locked in billions of non-unique participants who turned to the gamified service to learn, play games, and interact with one another as physical interactions were ruled out.
Could This Be the End or Beginning?
Kahoot’s acquisition provides an avenue for the company to cut some of its losses and sell to a capital-rich firm like Goldman Sachs.
Ever since school came back to the classrooms, online live Edtech platforms like Kahoot bled users and tumbled in value.
Inflation and economic uncertainty, as well as the boom of artificial intelligence across several landscapes, have further slowed down the growths of tech companies like Kahoot, Chegg, and many others who have been forced to sell their platforms at relatively low valuations or lay off workers.
However, many of these companies were likely at unrealistic valuations due to the sudden need for tools to facilitate online, at-home learning.
The global pandemic catalyzed the new way people learn and socialize driving these platforms (like Kahoot and Zoom) to incredible heights.
The edtech sector is certainly not as exciting as it was during the height of the pandemic but it’s still grew significantly over the past year.
According to an Edtech market report by ReportLinker, the educational technology landscape grew from $140.24 billion in 2022 to $162.89 billion in 2023. This represents a compound annual growth rate (CAGR) of 16.2% within a year.
This is not where the trajectory of the Edtech industry is expected to stop.
According to the same report, the nascent industry is expected to hit $304.63 billion by 2027 at a CAGR of 16.9% within the next four years.
This still provides an avenue for edtech companies to succeed at churning out valuable learning services in the coming years.
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