TakeLessons Takes in $7M to Expand Its Online Market for Classes
San Diego’s TakeLessons might just be one of those startups that works for years before suddenly becoming an overnight success.
It’s been eight years since the company was founded as an online marketplace where music teachers could find students and vice versa. Today TakeLessons says it has raised $7 million in new funding to continue its expansion into new markets with Web-based software that helps teachers schedule lessons and manage their business. The company also moved recently into new offices in downtown San Diego, and now has 58 employees.
TakeLessons CEO Steven Cox says the additional capital will enable the company to move more quickly into other markets, such as foreign language instruction. From its initial market in music lessons, TakeLessons already had expanded into matching students with teachers in the performing arts and academic tutoring. Last month’s acquisition of Chicago-based Betterfly added online offerings in arts and crafts, vocational classes, and self-improvement courses like public speaking and personal life coaching.
As Cox explains, TakeLessons is now beginning to realize the advantages that come with applying its core technology in cloud-based scheduling, billing, and communications to help facilitate learning in different types of markets. As he puts it, TakeLessons’ software-as-a-service allows instructors to focus more on teaching, and to spend less time trying to figure out how to run their business as they make their way as online entrepreneurs.
The new funding was led by Chicago-based Lightbank, which was also the biggest investor in Betterfly.
Cox explains in an e-mail that the Betterfly acquisition and the funding happened simultaneously, but none of the cash was used to acquire Betterfly. It’s all designated for TakeLessons’ operations.
“We were walking down the road of purchasing the company before we started fundraising,” Cox writes. “As we started fundraising in November, Lightbank expressed interest in the deal, as they are big believers in the macro view of online marketplaces tied with a local component (they have a lot of experience with local commerce). It turned out to work out nicely for all of us. They were able to stay invested [in] the local marketplace space and we were able to acquire a competitor that fit strategically in our game plan.”
Other participants in the new funding round include existing investors Crosslink Capital, SoftTech VC, and Triangle Peak Partners. Moore Venture Partners, a co-investor based in San Diego, also was a new investor in the deal, which brought total funding for TakeLessons to $20 million since 2011, when the company first raised capital from institutional investors.
Before that, Cox says, he provided most of the early stage funding.
The company’s growth spurt became apparent in November, when TakeLessons was named as the 7th fastest growing tech company in the San Diego area, with revenue growth of 490 percent from 2008 to 2012, according to a survey from the Deloitte professional services firm. (TakeLessons’ growth was enough to rank at No. 214 in the Deloitte Technology Fast 500, an annual ranking of the 500 fastest growing tech, media, telecom, life sciences, and cleantech companies throughout the country.)
TakeLessons also finalized a partnership with Google in November that enables the site’s teachers and students to use Helpouts, Google’s video conferencing technology to make online learning more interactive and personal.
The company seems to be making the right moves to accelerate its growth even more. As recently as five years ago, Cox says, there was no easy way for music teachers and students to find each other online, or to assess the value of lessons listed on Craigslist or in newspaper classified ads.
“We’re up by well over 100 percent per year, just in terms of people coming to our site to look for these goods and services,” Cox says. “There are about 5 million underserved providers—teachers and instructors—who don’t have the technology they need to find new students and to manage their book of business. That’s our target market.”