Ron Packard, the founder and chief executive of Herndon-based online education provider K12 Inc., has resigned and plans to form a new company focused on technology-based learning programs.
Packard will continue to serve on K12’s board of directors. K12 executive chairman Nate Davis has been appointed chief executive.
K12, founded in 1999, is the nation’s largest full-time virtual school, providing online curricula and other educational services for students in pre-kindergarten through high school in 29 states and the District. It was conceived as an alternative to traditional education, offering high achievers, dropouts and other students more flexible schooling options. The model is not without its critics, some of whom have pointed to a 2012 study indicating that students enrolled at K12 lag behind their counterparts at traditional schools in math and reading proficiency.
The majority stake of Packard’s new venture, which has yet to be named, will be owned by an investor group led by Safanad Limited, a New York and Dubai investment house. K12 will own an initial minority stake of more than 25 percent, according to an announcement this week from Safanad.
Several businesses within K12 whose combined revenue in 2013 totaled $20.3 million — including the International School of Berne and Capital Education — will move to the new company in exchange for minority ownership.
The deal is expected to close around the end of January, said Packard, who will be chief executive of the new company.
Packard said the reason the new company is being created separately, rather than within the existing K12 framework, is because start-ups need a more entrepreneurial environment than a large company offers.
“You need a less constrained environment,” he said. “These businesses require capital initially, and operating losses. It’s hard to do that within a public company.”
The new company will focus on the global expansion of technology-based learning programs in pre-kindergarten through college through several existing early-stage businesses and targeted investments within the education services sector, according to the announcement.
One major difference between the new company and K12 is that the new venture will develop classroom-based digital learning programs internationally, while K12 operates online schools serving students primarily in the United States, said K12 spokesman Jeff Kwitowski.
“I look forward to the opportunity to lead this new company,” Packard said in the statement. “Our goal will be to bring in the additional capital needed to scale high-growth businesses and further the expansion of technology-based learning for students throughout the world. We will seek to grow these businesses as well as look at new investment opportunities and acquisitions.”
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