The fast-growing startup Class Technologies will acquire the virtual classroom tool Blackboard Collaborate, according to an announcement last week.
Class Technologies became one of the best-funded new edtech startups since the start of the pandemic, having raised more than $164 million to build out a series of classroom features on top of Zoom. That means colleges, schools and corporate-training operations pay Class for the ability to do things like give out assignments, proctor tests and take attendance inside of Zoom, one of the largest video-conferencing platforms on the market. Blackboard Collaborate is a videoconference platform that operates in the popular Blackboard learning-management system. Investors in the industry describe it as an “also-ran” next to the much larger Zoom platform.
Neither company would confirm details about the price, but an unnamed investor with knowledge of the deal told Techcrunch that it closed at $210 million.
What’s changing? Company leaders say that Blackboard’s video-conferencing platform will be acquired by Class sometime this year, but the Blackboard learning management system will stay with the parent company Anthology, which merged with Blackboard last year.
The name will change, too. Blackboard Collaborate will be known as Class Collaborate once the ink dries. And an undisclosed number of people who work on the Blackboard Collaborate team will join Class. But, the companies say, they will continue to offer full support for both the Zoom features and the Blackboard Collaborate features.
Officials say they view this as more of a long-term relationship than a quick hookup, with executives commenting that the deal is a “partnership” they intend to build on, not just an acquisition.
The deal also expands Class’s reach: together, Class and Blackboard Collaborate will reach more than 1,750 institutions in higher ed, K12 and corporate learning and development teams, officials say.
For customers of Blackboard Collaborate, the deal means significant investment into the virtual classroom that wouldn’t have occurred otherwise, Anthology CEO Jim Milton says. Milton also stresses that it will allow Anthology to invest more heavily in the LMS Learn Ultra, where he says they’ve already tripled the number of developers focused on that platform.
For Class’s CEO Michael Chasen, it’s also something of a reunion. If that name sounds familiar, it’s because Chasen actually co-founded Blackboard back in 1999, and he served as CEO for many years.
Divest and Invest
When Anthology merged with Blackboard, the company was mainly interested in the LMS, says Troy Williams, managing director at Achieve and University Ventures. The LMS helped them to build an end-to-end solution, and the Collaborate video piece of the puzzle wasn’t central to that.
Meanwhile, with interest rates going up, the sale gives Anthology an opportunity to unload Collaborate to invest into that LMS and also to pay off whatever debt may have been accrued during the purchase of Blackboard and during initial acquisition and rebranding of Anthology by Veritas Capital, Williams says.
Class is a smaller company, he adds, and the purchase gives its leaders a chance to move over customers to their core product that they might not have been able to get otherwise.
“In the long run, they may shut down the Collaborate product, but only after they’ve been able to migrate those customers to their core product [the Zoom add-ons],” Williams says.
If Class does end up consolidating and moving customers from Collaborate to Zoom, the deal will make it harder for competitors like WebX and Microsoft Teams to pick off Collaborate customers because there’s an easy path to migrate customers between them and Zoom, Williams says.
