Berlin-based online education platform iversity looks to have pulled back from the brink of bankruptcy after securing new investment from Holtzbrinck Digital, the Internet investment arm of the education-focused Holtzbrinck Publishing Group.
The size of the seed round is not being disclosed but iversity founder and CEO, Hannes Klöpper, describes it as “solid”, adding that it provides the team with “a long-term financing perspective”.
As part of the investment strategy iversity will be collaborating with science publisher Springer Nature, part of the Holtzbrinck Publishing Group, to create digital degree programs and offer existing Springer Nature distance education programs via its digital format, along with new content focused on professional development. There will also be experiments by the pair with new formats aiming to complement Springer Nature’s existing textbook business.
iversity notes the Holtzbrinck investment is still pending approval by the creditors’ council but reckons this should be a formality.
The startup, which began back in 2011 offering online collaboration tools for learning management before relaunching as a MOOCs platform in early 2013 with the hopes of building the ‘Coursera of Europe’, ended up filing for insolvency this June after running into problems raising its next round of financing. It has not disclosed how much it’s raised in total over its five years of operation but its CrunchBase listing suggests there have been five rounds of funding from six investors over this time.
Klöpper says the issues that led to iversity’s bankruptcy filing included its two main shareholders, Deutsche Telekom’s T-Venture and bmp, stopping their investment activities in 2015 — meaning they weren’t able to lead another round. Add to that, after five years of funding rounds he says the capitalization table “didn’t look pretty”, as he puts it.
“Valuation as well as burn rate ultimately proved too high to attract external funding,” he says, adding: “All of these problems could be addressed in the new setup so that the company is in good shape now.”
Monetizing MOOCs — aka massively open online courses — continues to be a discussion topic in the online education space, with players experimenting with different business models, such as charging students fees to obtain a certificate of completion, to try to turn free courses (with inevitably low completion/drop-out rates) into sustainable revenue engines.
Klöpper says iversity intends to continue to offer MOOCs on its platform but its focus and business model is on the b2b segment, and on serving corporate digital education needs — an area it has been putting increasing amounts of effort into in recent years, including via collaborations with corporates to launch specific courses and by ramping up business-friendly course content on its platform.
With its runway extended via Holtzbrinck’s lifeline, it’s planning to further build out its public course offering in the field of professional development, adding that it will work closely with corporate clients to develop customised learning solutions to meet specific customer-needs.