Class Raises Funding, Nears Unicorn Status

Class Secures $105 Million in Funding Led by SoftBank

Class, a virtual classroom platform built for seamless integration with Zoom, has announced a $105 million funding round spearheaded by SoftBank Vision Fund II.

This latest investment brings the total venture funding raised by the 10-month-old startup to $146 million. This sum surpasses the capital secured by founder Michael Chasen’s previous venture, the publicly traded company Blackboard.

Rapid Growth and Valuation

Despite being newly established, Class is quickly approaching a unicorn valuation. The company currently holds a post-money valuation of $804 million.

Key investors contributing to Class’s success include GSV Ventures and Emergence Capital, who initially led the pre-seed funding round.

Additional support comes from prominent U.S. edtech investment firms such as Reach Capital, Owl Ventures, Insight Partners, and Learn Capital.

Notable Investor Participation

The investor group also features influential figures in the tech industry.

Jim Scheinman of Maven Ventures, an early investor in Zoom and the originator of the Zoom name.
Bill Tai, Zoom’s initial committed investor.
Steve Case, co-founder of AOL and CEO of Revolution.

class, a zoom-only virtual classroom, nears unicorn status after softbank check

Enhancing the Zoom Experience

Previously known as Class for Zoom, the platform provides tools for classroom management and instruction. These tools are designed to enhance the Zoom video conferencing experience.

Since its launch, Class has maintained exclusive compatibility with Zoom, a platform that gained widespread recognition during the pandemic and remains a central tool for synchronous communication.

The company is part of a growing trend of Zoom-related solutions and currently serves over 250 customers.

Strategic Implications of SoftBank Investment

The investment from SoftBank signals two key intentions for Class.

First, the company is committed to pursuing significant global expansion. Second, it suggests that Class is not solely focused on being acquired by Zoom, but rather aims for independent growth and development.

The Expanding Reach of Edtech

SoftBank has a demonstrated strategy of identifying a leading company within a specific industry and providing substantial investment to facilitate its expansion into global markets. Recently, the Japanese investment firm allocated significant capital to Clearco, previously known as Clearbanc, with the intention of supporting the alternative financing company’s growth beyond its existing presence in Europe, Canada, and the United States.

It is reasonable to assume that SoftBank now prioritizes startups exhibiting a natural inclination towards international markets, and then provides extensive funding to support their ambitions.

Class’s Global Trajectory

Class is following a similar path. According to Chasen, considerable international interest in the platform existed even prior to the official announcement of its seed funding round. Educational institutions from Europe, the Middle East, and Japan expressed interest before the general release of the product.

With Class now broadly available on Mac, Windows, iOS, Android, and Chromebook, Chasen is concentrating on converting those previously on the waiting list into active users.

Strategic Expansion Plans

The company’s international growth strategy involves establishing dedicated teams within key regions, including the U.K. and Ireland, EMEA, Latin America, and the APAC region. Class anticipates adding 100 employees globally, increasing its current workforce of 200.

Approximately 65% of the recent funding will be dedicated to supporting this international expansion, while the remaining portion will be invested in ongoing product development.

Addressing Product Refinement

One point of feedback regarding Class has been the uniformity of the user experience across different educational levels. The platform currently provides the same functionality for elementary school students as it does for university students.

Chasen acknowledges the need for greater product specialization, potentially incorporating gamification elements for K-12 education and exam proctoring features for higher education in future iterations.

“Our initial version delivers the essential tools required for online instruction,” Chasen stated, referencing features like testing and grade tracking. “Currently, our focus is on a product that functions effectively in all markets, with future enhancements tailored to specific regional needs.”

Demonstrated Market Demand

Early indicators suggest strong market acceptance of the platform. Class reported that its revenue increased by nearly 400% from one quarter to the next throughout 2021.

The Expanding Relationship Between Class and Zoom

Despite the current market conditions impacting large funding rounds and high valuations, Class’ recent capital raise may dispel doubts regarding a potential future acquisition by Zoom.

In a previous conversation with TechCrunch, Class CEO, Chasen, indicated Zoom’s primary focus lies in scaling operations, rather than specializing in the detailed functionalities Class aims to deliver.

However, the company has historically maintained close ties with Zoom’s initial investors and functioned as a Zoom reseller across several regions, leading to speculation about eventual consolidation. Today’s developments demonstrate Class’ commitment to operating as an independent entity. Substantial nine-figure funding rounds are typically secured by startups with aspirations exceeding mere integration.

Looking ahead, Class intends to leverage this funding to solidify its position as the preferred solution for educational institutions seeking a Zoom-compatible classroom experience. Currently, the company’s careers page highlights marketing as its key area for expansion.

Six marketing positions are currently available, including roles for an international marketing manager and a content marketing manager.

Competitive Landscape: Class vs. Engageli

Class’ primary competitor, Engageli, secured a $33 million Series A funding round in May 2021.

Engageli’s co-founder and COO, Jamie Farrell, departed in February 2021 to join another edtech company, and the company’s online hiring activity appears limited.

Based on available information, Engageli may encounter increased competitive pressure regarding resources and marketing capabilities, given Class’ new financial backing and expanding global team.