China-based SoftBank invests $215 million in e-learning platform Kahoot

Norwegian e-learning start-up Kahoot on Tuesday announced that SoftBank has invested $215 million in the company as demand for e-learning increases. The investment gives SoftBank a 9.7% stake in the company.

Following the announcement, shares of Kahoot jumped nearly 12% in morning trading. It’s market value currently stands at 19.9 billion Norwegian krone (about $2.2 billion).

“Kahoot! Is experiencing strong momentum and accelerated adoption as enterprises increasingly seek engaging, trustworthy, and user-friendly ways to build corporate culture, educate and interact,” the company said in a statement. “The company intends to use the net proceeds from the Private Placement to finance accelerated growth through value-creating non-organic opportunities and continue to build a unique platform company.”

Kahoot also said that it would sell 43 million new shares at 46 Norwegian krone (about $5) per share to SoftBank. The funds raised from SoftBank deal would be used to boost the company’s growth, as well as other deals from other new partnerships, joint ventures and acquisition, said the company’s CEO Eilert Hanoa.

“It’s all about the general switch in mindset from digital tools being a nice-to-have additional set of features in schools and classrooms, to being maybe the most important toolkit they can use to create engagement,” said Hanoa in a Tuesday interview.

Kahoot is a game-based e-learning platform that allows users/players to test their knowledge in multi-choice quizzes. The company was founded in 2012 and has since built its business focus around school and home learning. It also offers corporate clients with training and presentation tools. In the last 12 months, the company has recorded 1.3 billion “participating players.”

The events which surrounded the coronavirus pandemic caused the demand for educational technology, or “edtech” to be on the increase. With schools closed since March, most schools opted for remote learning to continue their learning. This move attracted many investors including Microsoft which invested more than $1 million in U.K. based computing start-up Kano.

In June, Kahoot raised $28 million in a round of funding. Since the start of the year, the company which is listed on the Oslo Merkur Market has seen its shares jump more than 150%. The company’s next line of action is to launch a full IPO on the Norway main stock market by early 2021.

“We’ve already accumulated approximately 8,000 new shareholders,” Hanoa told CNBC. “We believe that by doing a re-IPO on the main list on the Oslo Stock Exchange we could extend the investor base even further.”

The tech and gaming industry at large has seen a wave of IPOs in the last two quarters, including companies like Snowflake, Unity Software, GoodRX, and Roblox which announced Monday that it had confidentially filed to go public.

Other e-learning platforms have also raised funds in impressive figures in the last couple of months, with Byju raising $500 million from Silver Lake, and Unacademy raising $150 million in funds.