Instructure secures $80m in IPO

Instructure, the company behind learning management platform, has raised $80.96m in its IPO.

The firm priced its 4.4 million shares at $16 per share, the bottom end of its range of $16 to $18, amd will be trading on Nasdaq under the ticker INST. Morgan Stanley and Goldman Sachs were lead joint book-running managers for the offering with Jefferies also acting as a book-running manager. Needham & Company, Oppenheimer, and Raymond James & Associates were co-managers.

Instructure has raised $79.1m since founding in 2008, and counts venture firms Bessemer Venture Partners, Epic Ventures, Insight Venture Partners, OpenView Venture Partners, and Tomorrow Ventures as backers. Tim Draper, co-founder of Draper Fisher Jurvetson, is also a backer.

During its filing, Instructure gave this overview of its finances: “For 2012, 2013 and 2014, revenue was $8.8 million, $26.1 million and $44.4 million, respectively, representing year-over-year growth of 197% and 70%. We have experienced net revenue retention rates of over 100% at each of December 31, 2012, 2013 and 2014. For 2012, 2013 and 2014, our net losses were $18.5 million, $22.5 million and $41.4 million, respectively, as we focused on growing our business. For the nine months ended September 30, 2015, revenue was $51.4 million and we incurred a net loss of $40.9 million.”

The company has grown a wide user base, with 1,600 customers in 25 countries, including a number of schools, colleges, and universities. Instructure started out targeting only higher education institutions, but has grown to include primary and secondary schools as roughly half of its customers.

Aside from providing a learning management system for education institutions, Instructure also offers massive open online courses (Moocs) through Canvas. Unlike Mooc peers Coursera or EdX, the platform allows any institution to provide courses through Canvas.

The IPO is likely to have a positive impact on the whole learning management and Mooc sectors, which seem to have changing fortunes of late. Mooc companies have struggled to find a business model that works, with one of the founding companies in the sector, Udacity, having to change its entirely model away from free courses to a pay monthly model. Yet both Udacity, and fellow Stanford startup providing online courses Coursera have both held big rounds lately, with Udacity raising $105m and Coursera securing $63m. Instructure itself is yet to become profitable, yet the IPO and Moocs rounds will undoubtedly be seen as an endorsement for the sector.