Leading K-12 instructional content platform Newsela announced today a $100M Series D investment led by new investor Franklin Templeton and existing investor TCV, with participation by Owl Ventures, Tao Capital Partners, Chan Zuckerberg Initiative, and Waycross Ventures.
Private U.S. edtech companies raised a record-setting $2.2B in 2020 across K-12, higher ed, and workforce education. That's a 30% increase over 2019, and more than double the 14% YoY increase enjoyed by all venture-backed U.S. companies. Newsela's latest fundraise is a validation of the disruption taking place in the $10B U.S. K-12 instructional materials market, and a strong acknowledgment of much-needed investment in our K-12 education system as a whole.
Newsela was founded on the belief that classroom learning can be massively more engaging, effective and meaningful for all students. Launched in 2013 at the dawn of accelerating technology investments in high-speed internet and laptops, Newsela quickly became the SaaS platform of choice as the structural shift from paper-based materials to digitally delivered content unfolded in schools across the country.
With 37 million registered students and 2.5 million registered teachers in 90% of all U.S. schools, Newsela is well on its way toward making legacy materials like textbooks and the long-term lock-in commitments they represent, a relic of the past.
"The demands of remote learning amplified pre-existing weaknesses in how K-12 instructional content is evaluated, procured, and delivered," said Chris Anderson, Research Analyst and Portfolio Manager at Franklin Templeton. "The widespread shift of traditional classrooms to digital experiences spurred by the pandemic has greatly accelerated the transition from paper-based materials to SaaS solutions already underway."
Newsela's 2020 annual recurring revenue grew 81% over 2019, with new bookings surging 115%, rivaling many of the top-performing public SaaS companies in the world.
"This is a continuation of the rapidly accelerating growth we've been experiencing for years," said Matthew Gross, founder & CEO of Newsela. "Education leaders are breaking free from the limits of an antiquated marketplace that locks schools into a static, unengaging curriculum while the world continues to change around us. School administrators are taking this opportunity to future-proof their schools, and they're not looking back."
When it comes to content in the classroom, educators face an over-abundance of choice with few good options. Textbooks deliver alignment to academic standards, but they're outdated on arrival, don't address the different learning needs within a single classroom, and do a terrible job promoting inclusiveness and engaging students. The internet provides a wealth of engaging content, but it's unvetted, difficult to map to learning standards, and rarely at a reading level that's accessible to every learner. Between those extremes are a host of solutions that are simply digital versions of textbooks, use content "manufactured" for instruction that isn't engaging or representative of all students, or forces teachers to surrender control of their classrooms to software.
Newsela solves that problem with its deep catalogue of over 14,000 high-quality, high-interest, standards-aligned texts across 20+ genres, carefully curated from over 175 trusted publishers, including the Associated Press, National Geographic, The New York Times, Scientific American, USA Today, Atlanta Black Star, Human Rights Watch, and Encyclopedia Britannica.
All content is then made ready for classroom instruction by reproducing every text at multiple reading levels, adding instructional supports such as assessments, lesson ideas and professional development, and mapping all content to learning standards by subject and grade. Educators access these instruction-ready materials on a single platform where they can search, remix, modify and bundle resources into comprehensive, engaging lessons, or choose from a wealth of pre-built collections.
"Even before COVID-19, only half of students reported feeling engaged in school, with a fourth described as actively disengaged," said Dan Cogan-Drew, co-founder and Chief Academic Officer of Newsela. "To that end, traditional educational materials have failed us. They leave students unengaged, uninspired, and as a result, unmotivated to learn. Newsela's foundation lies in creating authentic student learning engagement as the key to academic outcomes."
Newsela will use these additional funds to build and acquire features and content that help teachers plan and execute more effective lessons, advance the digitization of K-12 classrooms, and accelerate its rapidly expanding customer base.
Newsela takes authentic, real world content from trusted sources and makes it instruction ready for K-12 classrooms. Each text is published at five reading levels, so content is accessible to every learner. Today, over 2.5 million teachers and 37 million students have registered with Newsela for content that's personalized to student interests, accessible to everyone, aligned to instructional standards, and attached to activities and reporting that hold teachers accountable for instruction and students accountable for their work. With over 14,000 texts in our platform and 10 new texts published every day across 20+ genres, Newsela enables educators to go deep on any subject they choose.