Deal to Watch: The Next Generation of Educational Content

Key Stats:

Summary

The Adventure 2 Learning team has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

Problem

American students are notorious for being less academically able than students in other countries. The United States ranks 13th in the world in reading proficiency, behind countries like China, Estonia, Finland, and New Zealand. It ranks 18th in science proficiency and a shocking 37th in math proficiency. 

This disparity in educational outcomes is not due to lack of spending. A 2018 report by the Organisation for Economic Co-operation and Development found that increased spending increases average educational performance up to a certain threshold. Beyond that threshold, additional spending does not guarantee better performance. In fact, the report points out that the United States scores equally to or worse than Canada, Ireland, and New Zealand, which spend between 10% and 30% less per student. 

If the solution is not to throw money at the problem, how can we help our society’s education system? Improving education for American students is not a simple issue. Educators and policymakers must examine many intertwined causes. However, researchers do note that many students are unengaged in the learning process. Student engagement is a predictor of educational outcomes. Could a more engaging learning solution increase student buy-in and even reduce needless spend among school districts? 

Solution

Adventure 2 Learning (A2L) is a large library of educational video content intended for classrooms. A2L offers videos on a wide range of traditional school subjects like language arts, social studies, and math. It also develops content on “emerging topics” like financial literacy and mindfulness. A2L videos encourage students to get active and engage in the curriculum, a 21st century improvement over static textbook learning. 

A2L uses a worldwide network of educational experts to develop videos. The company also develops select pieces of content in-house. A2L accredited educational experts review each video to ensure that they are ready for classroom use and aligned with curriculum standards. Teachers can simply open A2L, play a video, and feel confident that their students are engaged in active learning.  

A2L is the second company from co-founders Michael Rhattigan and Dr. Jenny Delfin. It builds upon the pair’s successful first effort. Adventure to Fitness was the co-founders’ first educational video content company. It focused on physical activity videos introducing students to cultures around the world. Adventure to Fitness, founded in 2010, grew to be used in over 26,000 schools nationwide. That’s an impressive 40% penetration into all US public elementary schools. A2L leverages a similar model as Adventure to Fitness and the same strong educator network to offer a wider scope of content across more curriculum areas. 

Schools can subscribe to access the A2L content library, not unlike a Netflix subscription. A2L charges $1,500 for a one-year subscription per school and $2,500 if the school wants to enable at-home access for parents. The company generated just over $150,000 of revenue in 2019, operating at a loss of over $400,000. A2L reports that it is currently in the “launch and sell” stage. It plans to scale sales and marketing after this capital raise. 

The Team

A2L co-founders Michael Rhattigan and Dr. Jenny Deflin are a husband-and-wife team launching their second venture after the success of their first company, Adventure to Fitness. Rhattigan began his career at Accenture and later launched his first media startup during graduate school at MIT, which achieved an exit. Dr. Deflin completed an accelerated college/medical degree program from New York University and the Icahn School of Medicine at Mt. Sinai. She spearheaded the health aspects of Adventure to Fitness and returned to assist in scaling A2L. 

The A2L team also includes Deni Conkell-Mazzei, Director of Customer Experience & Strategy. Conkell-Mazzei was also an early member of the Adventure to Fitness team. She brings her growth expertise and extensive educational network to A2L. 

The A2L Board of Directors includes Katie Ford (an experienced advertiser and Twitter’s Head of Global Brands), John Neiers (a sought-after leader in education and technology), and Mike Hajialexandrou (a financial services professional with experience at Credit Suisse). 

Growth Plan

A2L does not give detailed growth plans in their fundraising materials beyond indicating that this fundraise will enable them to scale their marketing and sales activities to generate additional revenue. The company’s Form C filing reports that A2L plans to devote a sizable portion of raised capital toward marketing, another portion toward content licensing and development, and a small amount toward enhancing its tech platform for content delivery.

Why We Like it

• Proprietary advantage from a previous venture: A2L is this co-founding team’s second company in the educational content space. It is most accurately described as an extension to their successful first company. Adventure to Fitness was impressively effective in enrolling 26,000 schools, and that extensive educator network gives A2L a huge advantage in marketing and sales for its expanded content library. As A2L writes in its Form C filing, this company is “not a concept.” The model has been well-proven and is primed for success off of the traction of Adventure to Fitness.  

• Experienced team: A2L CEO Michael Rhattigan is an experienced entrepreneur with two successful companies under his belt (one media company exit plus Adventure to Fitness). He translates all of his expertise from launching and scaling Adventure to Fitness into A2L, as well as his large network of key stakeholders in education. Rhattigan’s co-founder and wife, Dr. Jenny Deflin, has less specific entrepreneurship or education experience but also has learned the basics of the educational content business from the Adventure to Fitness journey. In short, this team has built a successful lookalike of this company before, which is an invaluable signal of potential for A2L.  

• Benefits of dynamic educational videos over static textbooks: Today’s kids are used to consuming engaging video content. Learning from textbooks increasingly seems antiquated, particularly when the information contained within textbooks becomes outdated. Therefore, A2L’s large library of educational video content is both better suited to kids’ learning expectations and better able to teach the latest information with modern flair. Moreover, A2L’s content library saves school districts money. The average district spends $250 per student per year on textbooks, greater than a one-year subscription to A2L ($1,500) for any district with more than six (!) students. While A2L is unlikely to fully replace textbooks anytime soon, a subscription to A2L could cut down on the number of individual textbooks necessary for a district to purchase. 

Rating

Adventure 2 Learning (A2L) is a simple concept, not unlike a Netflix for school. Teachers have access to a large library of educational video content to supplement their lesson plans and get students engaged in a wide variety of topics. This model has already proven successful. A2L’s co-founders previously launched Adventure to Fitness, an educational content distribution company focused on physical education and global awareness, which reached over 26,000 schools nationwide. Given the advantage that this established reputation, network, and proprietary expertise lends to A2L, the company is more likely than the average startup to achieve success. 

The company also has exit potential. Investors are clearly excited about educational technology. Edtech companies raised $18.66 billion globally in 2019, a 14% increase over 2018 investment totals. Textbook giant McGraw-Hill acquired Redbird Advanced Learning, a content-based education company, in 2016. Pearson acquired digital learning technology for $25 million from Smart Sparrow in 2020, supplementing the company’s pivot to a digital-first strategy. A2L has a viable exit path with an existing educational content company like leading textbook manufacturers. One could also speculate that content mega-companies like Apple, Netflix, or Disney could eye an expansion into educational content and look first toward a company like A2L with heavy investment in high-quality original content. 

Any startup investment bears inherent risks, and A2L is not a guaranteed success. Selling to school districts is difficult, as they behave like bureaucratic, slow-moving corporate entities. Video content production is expensive (though A2L limits this expense somewhat by relying on externally-produced expert content for a large portion of its library). Nevertheless, A2L’s co-founders are seasoned edtech executives with a track record of selling to 40% of America’s public schools. Adventure 2 Learning offers an engaging, modern educational product with demonstrated product-market fit: that makes A2L a Deal to Watch.