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Chegg adds Mathway to its portfolio
Posted on Friday, 05 June 2020 10:32
Chegg has purchased US-based educational application Mathway for USD 115.00 million.
The consideration includes an upfront sum of USD 100.00 million, as well as a potential earnout of up to USD 15.00 million, dependent on certain performance-related targets and other contingencies being achieved over the next three years.
Formed in 2002, Mathway provides mathematics support and services for a range of subject areas and over 400 topics, such as pre-algebra, algebra, trigonometry, calculus and other disciplines.
Its app can be accessed through optical character recognition software and offers step-by-step instruction to teach both simple and complex calculations.
The group’s ‘Ask an Expert’ feature also allows pupils that are struggling with a concept to receive immediate support.
Mathway is used by high school students, as well as teachers, professors and parents across 100 countries worldwide and available in 13 languages.
In 2019, the app helped solve 1.30 billion mathematics problems for subscribers.
Nathan Schultz, president of the buyer’s learning services division, said: “Bringing Mathway into the Chegg family will bring additional subject coverage, languages, and international reach, significantly expanding our TAM [total addressable market].”
The deal will also help tackle the issue of math deficiency, which remains a large-scale issue in education and workforce preparedness, according to the press release.
Frank Balcavage, co-founder of Mathway, noted: “Chegg shares our direct to the student, always available, step by step instruction model. By joining them we believe we will quickly be able to scale to help millions of students at a time when math is increasingly important.”
The acquiror expects the target to add revenue of around USD 500,000 during the second quarter of 2020, and to post an adjusted loss on earnings before interest, tax, depreciation and amortisation of about USD 500,000.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 20 deals targeting education support services providers announced globally in 2020 to date.
Australia-based IDP Education raised AUD 225.00 million (USD 155.66 million) through a placement of shares in the most valuable of these.
© Zephus Ltd