After raising $100 million last year with a valuation of more than $2 billion, Australian ed-tech startup Go1 is making an acquisition and getting some investment to expand its reach and technology to drive the market of online learning for companies to serve.
First, it picks up Blinkist, a Berlin-based startup that had built a platform to discover and read condensed versions of longer non-fiction books — “Blinks” that typically take no more than 15 minutes to read or listen to.
Second, while the financial terms of the acquisition are not disclosed by the two companies, we confirmed other details with Go1’s co-CEO and founder Andrew Barnes: The acquisition is a mix of cash and stock. And it will also cover Blinkist’s largest investor, Insight Partners, taking an additional $30 million of equity in Go1 at an “upround,” but again without discussing the exact numbers.
The two platforms will continue to operate separately, but over time the plan is for more integration and cross-selling between the two, the companies said. It will also work to bring newer currents in technology to the wider platform, such as incorporating more AI into Blinkist’s text summary process, and – leveraging Blinkist’s app format – offer a wider range of course delivery options to Go1 users.
“B2B has been our bread and butter, something Blinkist had just started,” Barnes said in an interview. But on the other hand, he noted that “Blinkist has very high user engagement,” something Go1 wants to improve in its app. “We wlast year that what we want to do, they had already done, and we had done what they wanted to do.”
Blinkist has had 25 million downloads of its app and has just under 1 million paying users, including some 1,500 businesses. Go1 – which is backed by companies like Salesforce and Microsoft, as well as Softbank – says it has 8 million users, with major clients like Delta, Hays, Westpac and energy giant EDF using its e-learning platform, which has a curated catalog of training and professional development courses, tens of thousands in total.
Blinkist’s last valuation was $160 million in 2018, when it grossed $18.8 million and the company is “significantly larger” than it was then, Barnes said.
The reason Blinkist hasn’t looked for financing in the past five years is because it didn’t have to: the company is growing and profitable, and there’s still money in the bank, according to Holger Seim, CEO and co-founder of Blinkist. It had raised just over $37 million, per Pitchbook datawith backers in addition to Insight including Left Lane Capital, T-Ventures and more.
The Berlin start-up has had a string of potential buyers at its door over the years, Seim said in a separate interview. Blinkist’s catalog is a mix of text-based and audio content, making it an interesting asset for technology companies, publishers, or media brands that have sought to build larger e-book businesses, business user strategies, or even larger media holdings for both in areas such as podcasting.
“But before Go1 there was never anything that looked good,” Seim said.
Blinkist and Go1 are in areas worth watching over the next few years, mainly because of how – or ifif you’re more skeptical – they’ll be disrupted by advancements in areas like AI.
One camp would have you believe that both e-learning and reading (and in particular reading summaries) will be overthrown as generative AI gets stronger. Personalization will deliver content tailored to people’s specific needs, whether it’s what they need to learn, want to learn, or have time to learn.
However, Seim is far from worried about this. “We see generative AI as a great opportunity,” he said. He noted that even before ChatGPT’s release, “you could find a book summary by Googling. Key insights have always been a commodity.”
But something is still missing from those recordings, he continued. “We are not a library, but a smart companion to make learning part of your life. Content should be engaging, entertaining and recommended to you at the right time to keep you going. There is more than the content itself.”
AI is already being used by Blinkist to build recommendation algorithms, but in the future it could help the very human workforce of people who create summaries by helping them work faster and at a lower cost. The startup is already testing elements of this, he said. “We just need to make sure GPT can work at scale,” adding that it hasn’t been foolproof so far.
Given Blinkist’s status as profitable and growing, this deal is likely not part of the M&A trend we’ve seen in tech over the past six months, where there’s been an increase in smaller deals as a wave of startups has come along. the end of their finance jobs and found conditions too challenging to raise more money. What it does open up are questions about what the next step for the larger Go1 will be.
Buoyed by Softbank’s Vision Fund in its heyday, the market for funding and exits for later and larger tech companies has been pretty tough over the past six months. Barnes said an IPO is part of the long-term plan, but “it’s not something we’re focusing on right now.”