Roughly one year into its existence, Google Capital is wasting no time in putting its money to work.
Renaissance Learning, an education technology company, plans to announce on Wednesday that it has received a $40 million investment from the Google fund in exchange for a minority stake. The deal values Renaissance at $1 billion.
The investment on Wednesday is the third disclosed by Google Capital, which the Internet behemoth created to invest in late-stage technology start-ups in search of additional capital. The other companies that the fund has taken stakes in have prominent pedigrees: Survey Monkey, the online survey company founded by a veteran Yahoo executive, and Lending Club, the darling of the peer-to-peer lending world.
Now, Google Capital is showing an interest in education. Renaissance Learning harnesses cloud computing to help teachers develop their lesson plans for students, including for reading and math. The company has been owned since 2011 by the British private equity firm Permira, which took over under convoluted circumstances.
“For many educators, the question is not whether to embrace new technology, but how to embrace technology in a way that makes teachers’ lives easier and meaningfully boosts student achievement,†Gene Frantz, an executive at Google Capital and a former partner at TPG Capital, said in a statement. “Renaissance Learning is at the forefront of this educational movement, and their ability to use data to support effective teaching and drive student growth is unparalleled.â€
Google’s capital could come in handy at Renaissance, which has expanded in recent months. The company bought Subtext, an e-reader platform start-up (that happened to count Google Ventures, the search giant’s early-stage investment arm, as a backer), last August.
Nic Volpi, a partner at Permira, said in a statement that Renaissance had increased its revenue by double-digit figures over the last two years, including a 20 percent gain last year.
The investment may help provide ideas and new product opportunities for Google itself, which offers educational versions of core products like Gmail and Google Docs as well as Chromebook computers.
