The last few years have seen new players emerge to challenge Blackboard, the leading provider of course-management software used by colleges. But last week a longtime Blackboard competitor got an unexpected boost, announcing that it had received an $80-million infusion of venture-capital financing in a bid to expand and develop new features.
The company, Desire2Learn, is based in Canada, and its officials say the deal is the largest-ever venture-capital investment in a Canadian software company. The company’s chief executive, John Baker, said the money would allow Desire2Learn to expand its research and development and remain independent for the long term.
“We want to make sure we’re building support for our clients and driving a lot of innovation in the educational market,” Mr. Baker said. “We see what education clients are looking for.” The firms making the investments are New Enterprise Associates and OMERS Ventures.
The company’s announcement came as a surprise because of Desire2Learn’s position as a smaller education-software company, behind Blackboard, Moodle, and Sakai, said Trace A. Urdan, an analyst at Wells Fargo Securities who focuses on education-related companies.
“Nobody thought there was $80-million out there to invest in this market, but it found it from really smart, savvy investors,” Mr. Urdan said of Desire2Learn. “This changes the ballgame.”
Desire2Learn plans to use some of the money to hire 250 employees next year. It now has 560 employees, 210 of which were hired this year, said Tim Morin, a spokesman for the company.
The opportunity to take advantage of increasingly technology-driven developments in education played a role in the company’s decision to seek more capital. “We have the opportunity to step back this year and look at the educational landscape,” Mr. Baker said. “We are seeing the transformation from print to digital, and a demand for mobile platforms and analytics for brick-and-mortar classes.”
Mr. Baker cited two examples of new approaches it hopes to expand: a pilot project it is doing at the University of Wisconsin that seeks to leverage data on student behavior for insights on student success, and a project at Daytona State College, in Florida, to run reports required for accreditation.
Matthew Maurer, a Blackboard spokesman, declined to comment on what Desire2Learn’s announcement may mean for the course-management market.