Wheelings & Dealings: Google Capital Launches Into Education with $40M Investment

By Michelle Amodio February 19, 2014

Google Capital, a new growth equity fund backed by Google, has made its foray into education with a $40M minority stake in Renaissance Learning.

Renaissance Learning, an education technology start-up, is owned by British private equity firm Permira and provides cloud-based education software, including reading and assessment tools that the company says are used by nearly 20 million students and teachers. The Wisconsin Rapids, a Wisconsin-based company that went public in 1997, was taken private again in 2011 by Permira. Renaissance Learning CEO Jack Lynch said Wednesday that the deal, which gives Google investment a minority stake in the company, puts the company’s value at $1 billion.

The tech giant has finally given some details on its latest Google Capital, a new arm intended to "invest in the most promising companies of tomorrow.”

Google says that its approach will have one important difference to its established Google Ventures team.

“The most important -- and distinctive -- feature of Google Capital is how we work with our portfolio companies,” David Lawee, a partner at Google Capital said in his blog post. “Over the past 15 years, Google has built a strong business, and that’s mostly thanks to the great people who work here. Our portfolio companies have abundant access to the talent, passion and strategic expertise of some of Google’s technology and product leaders.”

This investment opens doors for both companies, noted Jack Lynch to Tech Crunch. It is not a necessary move for Renaissance’s operations, rather a push within the education space.

Google’s interest in education is no secret. The company launched Google Play for Education, a new app shop that will make it easier for educators to find apps, books, videos and other content appropriate for K-12 students, and it will enable bulk purchasing with the ability to distribute apps to a group of students’ tablets wirelessly.

Google also made headlines last September with its partnership with edX, a provider of massive open online courses (MOOCs), to make its online course platform more accessible to aspiring developers. Google and the pros at edX partner schools will use the open-source learning platform Open edX that will allow for more users to take courses and more institutions to offer them. This is all using Google technology, of course.

This new investment is also beneficial to Google, as it may help provide ideas and new product opportunities for the search giant. Currently, the company already offers educational versions of core products like Gmail and Google Docs as well as Chromebook computers. This is the next logical step, perhaps a step to help it rival its competition with Apple, who has had a large stake in the education market with its iPad. Digital textbooks could save a school around $250 per year and when costs associated with printing handouts are factored in, the cost savings goes much higher, so many have already invested in iOS devices to handle its digital learning.

With a lot of companies looking towards the cloud, will this give Google a bigger push in the cloud education market? Watch this space for news as it happens. 

Edited by Cassandra Tucker

TechZone360 Contributor

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