After yesterday's "sources say" report from TechCrunch about Instructure - maker of the Canvas LMS - raising a new round of financing and entering the corporate LMS space, Instructure changed plans and made their official announcement to today. The funding is to both expand the Canvas team and to establish the new corporate LMS team. I'm not a fan of media attempts to get a scoop based purely on rumors, and in this case TechCrunch got a few items wrong that are worth correcting.
- Instructure raised $40 million in new financing (series E), not "between $50 to $70 million". TechCrunch did hedge their bets with "low end of the range at over $40 million".
- The primary competition in the corporate LMS space is Saba, SumTotal, Skillsoft, Cornerstone - and not Blackboard.
- The Canvas LMS was launched in 2010, not 2011. (OK, I'll give them this one, as even Instructure seems to use the 2011 date).
TechCrunch did get the overall story of fund-raising and new corporate product right, but these details matter.
Instructure's new product for the corporate learning market is called Bridge, with its web site here. This is an entirely new product, although it does share a similar product architecture as Canvas, the LMS designed for the education market (including being based on Ruby on Rails). Unlike Canvas, Bridge was designed mobile-first, with all mobile capabilities embedded in the product and not as separate applications. In an interview with Josh Coates, CEO of Instructure, he described their motivation for this new product.
We like the idea of building software that helps people get smarter. Post education there is a void, with bad corporate software.
The design goal of Bridge is to make the creation and consumption of learning content easy, although future directions for the company will emphasize employee engagement and two-way conversations within companies. According to Coates, this focus on engagement parallels their research for future emphasis in the education market.
The Bridge product line will have a separate sales team and product team. From the press release:
Foundation partners include CLEARLINK, OpenTable and Oregon State University.
Oregon State University is an interesting customer of both products - they are adopting Canvas as part of their Unizin membership, and they are piloting Bridge as an internal HR system for training staff. This move will likely be adopted by other Canvas education customers.
Given the self-paced nature of both Competency-Based Education (CBE) and corporate learning systems, I asked if Bridge is targeted to get Instructure into the CBE land grab. Coates replied that they are researching whether and how to get into CBE, but they are first exploring if this can be done with Canvas. In other words, Bridge truly is aimed at the corporate learning market.
While Instructure has excelled on maintaining product focus and simplicity of user experience, this move outside of education raises the question about whether they can maintain company focus. The corporate market is very different than the education market - different product needs, fragmented vendor market, different buying patterns. Many companies have tried to cross over between education and corporate learning, but most have failed. Blackboard, D2L and Moodle have made a footprint in the corporate space using one product for both markets. Instructure's approach is different.
As for the fund-raising aspects, Instructure has made it very clear they are planning to go public with an IPO sometime soon, as reported by Buzzfeed today.
CEO Josh Coates told BuzzFeed today that the company had raised an additional $40 million in growth funding ahead of a looming IPO, confirming a rumor that was first reported by Tech Crunch yesterday. The company has now raised around $90 million.
Given their cash, a natural question is whether Instructure plans to use this to acquire other companies. Coates replied that they get increasingly frequent inbound requests (for Instructure to buy other companies) that they evaluate, but they are not actively pursuing M&A as a key corporate strategy.
I have requested a demo of the product for next week, and I'll share the results on e-Literate as appropriate.
Update: Paragraph on organization corrected to point out separate product team. Also added sentence on funding to go to both Canvas and Bridge.