Top Hat raises $30 mln Series C round to disrupt textbook industry


Mike Silagadze, Founder and CEO of Top Hat; © 2016 Top Hat Monocle Inc.

Toronto education technology company Top Hat has secured about $30 million (US$22.5 million) in a Series C financing. The round was backed by Union Square Ventures, a new investor, which joined Georgian Partners, Emergence Capital, iNovia Capital, Golden Venture Partners, Version One Ventures and SoftTech VC, all of them investors in Top Hat’s $10 million Series B in 2014. Founded in 2009, Top Hat is the developer of a cloud-based student engagement and interactive teaching platform. CEO Mike Silagadze said the funds raised will help expand its solutions, currently used at 750 post-secondary institutions, to transform the US$10-billion U.S. textbook industry.

Photo: Mike Silagadze, founder and CEO of Top Hat.

PRESS RELEASE

Top Hat Raises $22.5M Series C to Transform How Universities Engage and Educate Students Inside and Outside the Classroom

Union Square Ventures joins existing Top Hat investors, including Emergence Capital, Georgian Partners and iNovia Capital

Top Hat’s interactive, cloud-based teaching platform revolutionizes how professors teach and university students learn

Investment will accelerate development of new solutions for creating and distributing academic content, bringing an end to the days of overpriced textbooks

Millions of students at more than 700 leading colleges and universities use Top Hat’s teaching platform to engage their students with interactive content, tools and activities

TORONTO, ONTARIO—February 15, 2017 — Top Hat, the interactive, cloud-based teaching platform provider, today announced it has raised $22.5M (USD) in Series C financing. Union Square Ventures joined Top Hat’s existing investors Emergence Capital, Georgian Partners, iNovia Capital, Golden Venture Partners, Version One Ventures and SoftTech VC. Albert Wenger, partner at Union Square Ventures, joined Top Hat’s Board of Directors as the company expands deeper into the $10B market (US) for post-secondary academic content and teaching tools. Universities and colleges have been slow to adapt to the digital revolution. As technology adoption increases on campuses, Top Hat’s teaching platform enables professors to deliver engaging content, tools and activities to students through their smartphones. Today’s financing will enable Top Hat to accelerate the development of new solutions for creating and distributing academic content, finally providing a viable alternative to overpriced textbooks.

Comments on the News

• “At Union Square Ventures we’ve built a strong education and learning portfolio. I met Mike early in the life of Top Hat and have been impressed by how he has executed against his vision,” said Albert Wenger, Managing Partner, Union Square Ventures. “We are excited to be investing now to support the growth of the content marketplace. We believe it will bring much needed innovation to the market for higher education content.”
• “When we initially invested in Top Hat in 2014, the leadership team knew that in order to disrupt the publishing industry they had to create a direct channel to professors,” said Justin LaFayette, Managing Partner, Georgian Partners. “Those same relationships with traditional publishers have perpetuated a legacy model that has seen textbook pricing increase three times faster than tuition costs. By unlocking that requirement through their classroom engagement platform and validating the desire for new content solutions, Top Hat is poised to rapidly expand its role in the classroom and transform the market for traditional textbooks.”
• “Traditional publishers have dominated the market for academic content,” said Chris Bone, Assistant Professor, University of Oregon and co-author of an interactive Geography textbook on the Top Hat platform. “Although they realize that they need to utilize new and innovative technologies that will improve student engagement and learning in order to remain competitive, I think this is a real challenge for them because they’ve been dependent on the model of the printed textbook for so long, which makes integrating tools like test banks and homework platforms very difficult to do. As a result, edtech innovations like online book exchanges are in a great position to provide a more engaging and intuitive alternative to traditional textbooks, especially given that they can be much more affordable for students.”
• “Textbook publishing is often seen as a ‘bad’ business for how it treats professors and financially drains students,” said Mike Silagadze, co-founder and CEO, Top Hat. “We’re seeing this bankrupt strategy play out right now in Pearson’s recent struggles, widely credited to a lack of digital integrations and the underestimation of tech’s impact on higher ed. At Top Hat, our goal is to make teaching fun and effective. We’re fortunate to have found a group of investors who are very founder-friendly, respect the progress we’ve made to date, and can guide us as we continue to displace traditional textbook publishers and improve student performance.”

The Dominant Classroom Engagement Platform

Top Hat has identified a winning formula for classroom engagement with over two million students using its platform across hundreds of college and universities. That approach, rooted in the widespread adoption of smartphones, successfully bridged the growing digital divide between professors and students. By connecting with students where they are — on their devices — professors gained the ability to take attendance, deliver course content, and administer engagement activities like polls inside the classroom. Turning smartphones from a distraction to an asset and meeting students on the platform of their preference enabled Top Hat to rapidly grow its user and customer base.

Today’s funding comes on the heels of a very successful 2016 for Top Hat. The company expanded from 90 to more than 200 employees across offices in Toronto and Denver and is deployed in more than 750 of the top 1000 schools in North America, including Indiana University, the Ohio State University and Michigan State University.

Making Inroads Into Academic Content and Teaching Tools

On top of the dominant platform for classroom engagement, Top Hat is expanding rapidly to provide a wide variety of academic content. Fully interactive textbooks, test questions, homework, and more are now authored by respected academics and instructors and available via Top Hat’s marketplace. Content is available across disciplines including chemistry, biology, history and statistics with more coming online every month. Delivering academic content via Top Hat’s teaching platform makes it inherently more engaging for students. The platform also provides professors the analytics they need to understand how well students are understanding the materials so they can adapt their course curriculum accordingly.

About Top Hat
Top Hat’s interactive, cloud-based teaching platform enables professors to engage students inside and outside the classroom with compelling content, tools and activities. Millions of students at 750 leading North American colleges and universities use the Top Hat teaching platform. To learn more, visit www.tophat.com

About Union Square Ventures
Union Square Ventures is a venture capital firm based in New York City. We are a small collegial partnership that manages $450,000,000 across three funds. Our portfolio companies create services that have the potential to fundamentally transform important markets http://usv.com.

Photo courtesy of Top Hat Monocle Inc