New Delhi:- Big strides await Kahoot, an Oslo startup that has built a popular platform for creating, sharing, and playing educational “games” played by billions of students and adults over the years. The company values ​​Kahut at US$1.7 billion (NOK 17.2 billion) and announced that it would be fully privatized in a cash PE transaction of NOK 35 per share.

The private equity arm of Goldman Sachs Asset Management is leading the deal. Existing Kahoot backers General Atlantic (currently the largest shareholder), LEGO Group's KIRKBI Invest A/S ("KIRKBI"), and Glitrafjord (run by Kahoot CEO Eilat Hanoa) are named as other major shareholders in the transaction. are in a row. Other unnamed investors and management will also own Kahoot shares. 

The transaction represents a premium of 53.1% over Kahut's listed shares as of yesterday, specifically the closing price on the Oslo Stock Exchange on May 22, 2023 (22.86 NOK at the time).

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But that's a significant drop from the company's highest valuation at the height of the COVID-19 pandemic, and it's one of many tech companies struggling to raise money despite growing in the economic climate. This is a new example.

Kahoot is one of a wave of distance learning startups that have swept in as people moved away from physical classrooms and office spaces, with the company split into two divisions to serve K-12 students and adults/businesses. It's been a great opportunity to win a lot of business. And it's getting a lot of attention from investors. 

Kahoot has so far hosted “hundreds of millions of learning sessions with 9 billion (non-unique) participants in over 200 countries and territories,” and currently has over 1 million paying users. More recently, however, the company, like other tech companies, has struggled in the public markets as investors adjust to the new post-pandemic reality.

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As the world faces recession and inflation, consumers and businesses are reducing their use of digital services (such as e-learning and e-commerce) that they had high hopes for just a year ago. Kahoot today released a number of financial data that paint a complicated picture to support this. 

The company today announced second-quarter revenue of $41 million, up just 14% year-over-year. “Invoiced Revenue” increased by 8% to $40 million. EBITDA increased 60% from $11 million. Operating cash flow increased by 90% to $10 million.

But Kahoot, which has raised more than $500 million in total over the years, also noted that it only had $96 million in cash equivalents at the end of the second quarter.

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At its peak in 2021, Kahoot was trading at NOK 109 per share. This stock has fluctuated wildly over the years. One year ago, in June 2022, the price was NOK 17.92 per share. The acquisition removes some of that volatility and marks the culmination of years of Kahoot's two-tiered approach to corporate financing. 

The company launched its first product in 2018 and for many years has traded on Oslo's Merkur market, which is seen as a transit point between a fully private startup and a listed company. The path will help the company capitalize on both private and public funding opportunities as it scales and will be open to investment from traditional VCs such as regional powerhouses Northzone and Creandum. became. Softbank, whose investment has reached its peak. It also includes strategic companies such as Microsoft and Disney.

(As part of an effort to simplify and streamline SoftBank's portfolio, a 15% stake in SoftBank was sold at a loss to General Atlantic last year).

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Kahoot's valuation has certainly not been reached yet, but the PE group, which was set up to buy the stake, seems convinced there is a long-term opportunity here and will continue to put its existing holdings there. I'm going to bet. 

“Kahoot! Unlocking learning potential for children, students, and employees around the world. The company has a clear mission and value proposition, and our investment will enhance its impact and benefit all stakeholders. will help enhance the value of," said Michael Brune, global co-head of private equity at Goldman Sachs Asset Management, in a statement. “Through this transaction, we are pleased to work with our incredible leadership team and group of co-investors to expand our mission-critical learning and engagement platform and contribute to its continued growth and innovation.”  

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“Since General Atlantic partnered with Kahoot, the company has expanded its premium IP partnerships and delivered product innovations that leverage advances in generative AI, while expanding its enterprise offerings and global subscriber base. We have maintained significant momentum on our key strategic initiatives, including the launch of our new business," General Atlantic said in a statement. “Through this transaction, we are pleased to extend our commitment to supporting the long-term growth of Kahoot! in collaboration with our broader group of co-investors.” We look forward to continuing our partnership. " 

The Business Giants Goldman Sachs and Lego and many more are looking to acquire the E-Learning Gaming Platform named Kahoot.