EdSurge | February 21, 2017
myON, the Minneapolis-based developer behind a digital reading platform for students in grades preK-12, has been acquired by Francisco Partners, a private equity firm with offices in San Francisco and London. Terms of the deal, the first in the education sector for Francisco, were not disclosed.
myON was previously a division of Capstone, which formed in 1990 as a print publisher serving schools and libraries. In 2011, the company launched myON as a digital service with roughly 1,000 digital titles on the platform.
Much of the momentum behind myON’s launch was spurred by the popularity of iPads, recalls Todd Brekhus, myON’s President, who joined Capstone in 2009 to expand its digital offerings. The product focused on simplifying how teachers and students could access and assign digital materials. One of the first challenges was to convince publishers to move away from the rental model, where only a limited number of digital titles could be “checked out” at any time.
The mission behind myON, says Brekhus, who began his education technology career as a teacher, is to “de-fragment the one-book-for-all model” for reading instruction. The team aimed to personalize students’ experience by letting them choose books based on their interests, and read at the appropriate Lexile level, a commonly used measure of content complexity.
Today myON boasts a library of more than 13,000 digital titles, of which roughly 7,000 are available through partnerships with other publishers. (Capstone provides the rest.) The team has since added notation and audio narration features, along with writing and assessment activities. Teachers can also assign reading materials and see reports on metrics such as how much students have read, or how well they performed on quizzes. (Here’s a quick run-through of the basic features.)
The team quickly grew its footprint too, today claiming 7.5 million students across 49 states and 20 countries. Brekhus adds that the company is cashflow positive. He estimates there are roughly 9,000 schools that are “active pilots or active subscribers.” The company sells school site licenses, through which students can read as many titles as they want, for anywhere between $5,000 to $7,000 per year, depending on school size.
As myON grew, so too did conversations around its next growth phase. The team shared resources around finance, HR, operations and IT with its parent company Capstone but operated largely “like a garage startup within Capstone,” Brekhus tells EdSurge. Accelerating myON’s growth and development as a digital-first business would require resources beyond what Capstone could provide.
Last summer, Capstone started fielding offers for myON, shortly after the ASU+GSV Summit. He kept mum on the specifics but says there was an “equal amount of interest from private equity and strategic investors.” Francisco Partners will invest resources in myON, which includes growing the team beyond its staff of 85. (All on-site and remote employees are currently staying onboard, says Brekhus.)
“This sale allows Capstone to focus, to continue to innovate and to invest in the areas the business has always been most passionate about: creating rich content experiences, both print and digital,” Tom Ahern, Capstone CEO said in the prepared announcement.
These additional resources will help myON add updated assessment and reporting tools, along with additional content such as news. Also in the works are plans to grow its international footprint into Canada, Latin America, Southeast Asia and the Middle East. Another priority is to improve the mobile experience. (The platform is currently accessible on all major devices.)
Describing myON as a “part-assessment, part-curriculum, part-content” company, Brekhus acknowledges that the company competes with other supplemental literacy content providers, including not just Newsela and LightSail, but also traditional publishers and established companies such as Scholastic and Renaissance Learning (also owned by a private equity firm).
myON’s deal marks the latest in a string of education technology acquisitions by private equity firms in recent years. PowerSchool, purchased by Vista Equity Partners from Pearson in 2015, has since snapped up nearly a dozen other smaller companies. Weld North, whose portfolio consists almost entirely of edtech companies, has also been active in pursuing mid-sized edtech companies, including Think Through Learning and Compass Learning last year.