Why a secretive, Mark Zuckerberg-backed investment fund has bet big on Age of Learning
By Paresh Dave
Jun 28, 2016 | 6:00 AM
With its typical user around 4 years old, educational app ABCmouse has an unusual take on design.
Mobile apps choose either words or icons – but rarely both – in their menus because of limited screen space. ABCmouse packs in both: A stack of books is labeled below as “Library,” a set of crayons is underscored by “Art” and musical notes get described as “Songs.”
The idea is to consider everything in the software as a “teachable moment,” said Christine Woertink, senior vice president of design at Age of Learning Inc., the Glendale start-up that developed ABCmouse.com Early Learning Academy.
Prioritizing a bit of reading practice over clean aesthetics is an adjustment for Age of Learning employees who worked on games at Walt Disney, DreamWorks, Activision Blizzard, Electronic Arts and elsewhere. But weighing curriculum as heavily as art and commerce is paying off.
About 1 million families pay $8 a month or $80 a year for access to ABCmouse, which includes 830 lessons and 8,500 activities such as puzzles, e-books, videos and games. Though some parents complain about children quickly getting bored, reviews of the app and website are largely positive.
The growth attracted the attention of Iconiq Capital, a stealthy investment fund whose high-profile, Silicon Valley-focused client roster is led by Facebook Inc. co-founder and Chief Executive Mark Zuckerberg. Iconiq invested $150 million in Age of Learning last year, taking a minority stake that valued the start-up at close to $1 billion. The website TechCrunch first reported on the financing last month.
Age of Learning has used the cash to grow to more than 400 employees and develop three new offerings, including one unveiled Monday. School districts, preschool chains and other groups worldwide now can purchase ABCmouse in bulk.
Teachers already get free accounts with the ability to provide students free access to some materials. But paid, districtwide rollouts add training, dedicated IT support and usage data.
Other new efforts include pushing a version of ABCmouse as an English-language learning tool in China, where the company says there’s great demand. Later this year, activities aimed at second-graders are set to arrive. In addition, the investment has fueled uplifting ABCmouse ads during PBS and Disney shows.
Age of Learning emerged in 2007 after Doug Dohring sold Neopets, an ad-supported gaming website where people control virtual pets. With 140 million accounts, Neopets fetched $160 million from media giant Viacom.
Dohring said he wanted a clean slate to bake education into a similar experience and take away the advertising, something for which Neopets faced criticism.
Sunil Gunderia, Age of Learning senior vice president of strategy, said the company stands apart because it’s not associated with any commercial brands and “not trying to sell our characters as lunch boxes, backpacks or figurines.”
Devising a business model devoid of all that – and finding educational experts to back them up – took Dohring and colleagues four years and $15 million in start-up capital. ABCmouse finally launched in 2011.
Now, having Iconiq as a backer gives the company wide leeway to experiment. That’s crucial as Age of Learning faces competition from multiple fronts. Beyond educational apps such as Reading Eggs and Starfall, there are shows on Netflix, free tutorials on YouTube and interactive entertainment such as the mobile game “Candy Crush.” ABCmouse covers reading, math, science and more, but some parents see mixing and matching a swath of alternatives as more attractive and affordable.
At least one competitor is spending big to provide educational options across the spectrum. JibJab Bros. Studios’ StoryBots educational app has been downloaded 4 million times. About 13,000 teachers use StoryBots in classrooms while 65,000 have ABCmouse, according to the companies’ data.
A Netflix StoryBots show is launching in August, with companion online learning videos already garnering millions of views. Toys are expected to follow.
Both JibJab and Age of Learning are trying to take the guilt out of plopping a child in front of a screen, said Gregg Spiridellis, chief executive of JibJab in Marina del Rey.
“Parents are hungry for quality, constructive content for their kids,” he said.
At Age of Learning, that means turning to strategies like those atypical design tweaks. As Woertink pointed out, “Jack and the Beanstalk” isn’t good enough. Rather, try “Write and Color: Jack and the Beanstalk.”
Snacks-seller gets huge financing
An affiliate of the investment group Invus led a $111-million investment into Thrive Market, a Culver City online retailer that sells what it describes as “healthy groceries.”
To coincide with Monday’s announcement about the new funding, Thrive Market launched a petition drive for a regulatory change that could bring in millions of new subscribers to its service. The company wants the Agriculture Department to allow food stamps to be used for online purchases. With discussions involving federal officials stalled, the hope is that public pressure could give new weight to its pitch.
The company says it has 300,000 paying members and each day moves $200,000 worth of goods such as organic ginger cubes, rice cakes and boxes of Earth Balance vegan macaroni and cheese. It also sells household products and home goods. The new cash is targeted for advertising and developing Thrive Market-branded foods.
Elsewhere on the web
El Segundo postage seller Stamps.com acquired order-tracking software maker ShippingEasy for $55 million, according to Forbes.
Google has signed a lease for nearly 60,000 square feet of office space in San Diego, expanding its Southern California footprint out of Los Angeles for the first time.
While video games hog the limelight, board and card games – known as tabletop games – are enjoying a quiet resurgence. Many are turning to these retro pleasures as a respite from the computers, gaming consoles and mobile devices thought to have rendered board games obsolete.
Uber isn’t doing away with surge pricing – its strategy of raising fares at times of peak demand. Instead, during surge pricing periods Uber will begin presenting customers with the cost of their ride upfront, before they book.
GitHub, an online service used to store and share software code, hosts a conference focused on systems engineering issues Tuesday and Wednesday at the Avalon Hollywood. CodeConf LA features experts from Google, Pivotal and other tech companies.
On Thursday, IsraelDefense magazine hosts Cybertech, a conference in Beverly Hills bringing together cybersecurity researchers and corporate executives from Silicon Valley, Israel and Los Angeles.