“We’re really trying to prove that you can build something that does incredibly meaningful work in schools but also be a really great software business,” Davidson said. “Those historically have not gone hand in hand, but we’re trying to prove that it’s possible.”
The bulk of the new money came from the Rise Fund, a project of Silicon Valley private equity firm TPG Growth that invests in private companies seeking to accomplish some broader social mission. The fund has attracted the participation of Richard Branson and Laurene Powell Jobs (widow of Steve Jobs), alongside Bono and others.
With this newest deal, investors have poured $251 million into EverFi. The company’s courses reach an audience of roughly 16 million members by working through a few thousand large organizations, which pay fees that can climb above $1 million a year. A host of universities require EverFi’s AlcoholEdu course for students caught drinking underage. Universities that want to signal a proactive stance toward campus sexual assault pay for an online course called Haven.
More recently, the firm has branched out to new types of customers, including sports teams, corporations and nonprofits. It bought smaller education technology companies LawRoom and Workplace Answers, both of which work on corporate compliance issues, to get the company a foothold in the corporate world. More acquisitions could follow with this latest infusion of funding, Davidson said.
The company is also working on a new initiative aimed at combating opioid abuse and plans to use some of the new funding to develop and scale it up — though it has released few details about what the project will entail.
The investment is also seen as a victory for D.C.’s technology industry, which has nurtured education-related companies such as D.C.-based technology firm Blackboard and online degree provider 2U of Lanham.
“I think this is really great for D.C. and, hopefully, we don’t flame it out,” Davidson said of his company’s latest funding raise.
It seems unlikely that EverFi will follow Blackboard and 2U to the public markets any time soon. The firm has remained closely held, spreading its ownership among a small pool of tech-focused venture funds. The firm got early attention from some of Silicon Valley’s heaviest hitters: Amazon’s Jeffrey P. Bezos, Google’s Eric Schmidt and Twitter co-founder Evan Williams. (Bezos owns The Washington Post.)
TPG Growth, one of the firm’s largest investors, has provided the financial muscle behind aggressive, big-spending start-ups like Uber and Airbnb. A string of start-ups like EverFi have coined the somewhat contradictory term “private IPO.” These firms raise and spend money on the scale of a publicly traded company without ceding control to profit-minded public shareholders.
Start-up founders find such options easier than a traditional IPO and sometimes allow them to take a longer view.
With a private equity firm “there’s less transparency, less bureaucracy and fewer hurdles than taking a company public,” said Ron Gula, whose Maryland-based cybersecurity firm Tenable Network Security followed a similar path. “It’s the same money and less drama.”