Back in October, MasteryConnect switched CEOs and laid off roughly 30 percent of its staff. Now, the Salt Lake City-based company is back to growing—this time, on the right track, its current CEO Mick Hewitt insists—with the help of a new funding round.
Today, MasteryConnect announced a $4.5 million dollar Series C round from existing investors including Catamount Ventures, the Chan Zuckerberg Initiative, the Michael & Susan Dell Foundation, Pelion Ventures, and Trinity Ventures.
This round is a notable decline from MasteryConnect’s Series B round, which totalled more than $20 million across two closings in 2014 and 2015. Venture-backed startups typically raise larger sums of funding, at increasing valuations, as they scale. This latest round brings the company’s fundraising total to more than $34 million.
The modest fundraise comes after the company attempted to expand beyond its core offering, a mastery-based learning platform that aims to help teachers create curriculum and track how students perform against specific standards. Following its Series B round, MasteryConnect grew its team to build professional development, gradebook and other services. These forays largely stalled, and the company slashed its headcount from a peak of 140 in January 2016. Today there are 60 employees.
According to Hewitt, who co-founded the company in 2009, the money will go towards fine-tuning MasteryConnect’s core products, which he describes has four parts: formative assessment, benchmark assessment, curriculum planning and teacher collaboration. The goal is to reach profitability by June 30, the end of the company’s fiscal year. One of its investors, Amit Patel of Owl Ventures, believes it’s possible: “Regarding the size of the financing, MasteryConnect is doing great and on the path to profitability in the very near term. This is an appropriate scale of financing to achieve that milestone and beyond.”
For Hewitt, the past year has offered a difficult learning experience about the need to focus on core offerings before venturing into other markets. “We scaled into other products before nailing the core product. The benchmark assessment became successful… but when we tried to go after PD platforms, we got ahead of ourselves a bit,” he says. “I think like any startup, we hired engineering teams very quickly. But, it’s difficult to grow people quickly to accomplish an audacious goal to expand beyond your current product set.”
Hewitt imagines fellow entrepreneurs and investors will get their own wake-up calls about how quickly or big edtech startups can scale. “Last year, people believed they could go back and raise $30 or $40 million rounds, but we’ve seen a cooling of that. Investment in the K-12 market has cooled off, and gone more consumer-based,” he says, adding, “Entrepreneurs have to be careful as they go back to raise additional rounds.”
In the meantime, the MasteryConnect team is focusing on its most recent releases—namely an iPad app that allows teachers to capture assessment and Socrative Pro, a new model of the tool MasteryConnect acquired in June 2014—in addition to preparing to launch a new set of tools around growth reporting in 2017. The company currently claims more than 2.5 million teachers around the world.
“Our goal right now is that of sustainability,” Hewitt adds. “We have both mission and sales goals. We want to meet them.”
