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First Democracy VC

Because Learning

Learning platform focused on teaching STEM skills

279%

Investors

210

Time to Invest

Security Offered

Convertible Debt

Minimum Investment: $100

  • Lessons and sensor kits are used in 30 countries and 400 schools around the world

  • Students can conduct experiments in space through Because Learning’s exclusive partnership with satellite company Spire

  • Two distributors signed for 2018 expansion in China

  • Partners include the University of California Berkeley, the Association of Space Explorers, and satellite-powered data company Spire

Terms

Security Type: Crowd Note

Round Size: Min: $25,000 Max: $107,000

Valuation Cap: $2,000,000

Conversion Provisions: In connection with an equity financing of at least $1,000,000, the Company has the option to convert the Crowd Note into shares of a series of non-voting preferred stock, at the price per share of the new preferred stock sold in the equity financing, or a valuation cap of $2,000,000, whichever results in a lower conversion price. Please refer to the Crowd Note for a complete description of the terms of the Crowd Note, including the conversion provisions.

Overview

Opportunity

Founded in August 2014, Because Learning’s mission is to inspire students in the science, technology, engineering, and math (STEM) fields. Since then, Because Learning—formerly known as Ardusat—aims to excite kids about science through hands-on labs, experiments, and activities based on Next Generation Science Standards (NGSS) and other STEM skills. The Because Learning platform is designed to provide students and teachers online lessons and labs that pair with its high-end Arduino sensor kit to conduct experiments, analyze real-time data, and visualize real-life concepts in coding, engineering, science, technology, and math. Used in over 30 countries, Because Learning is on a mission to bring better STEM learning to students across the world. Because Learning is now seeking additional capital to fund its expansion into the fast-growing Chinese education market.

Product

For Schools


The company’s NGSS-aligned curriculum spans all STEM subject levels—from elementary through higher education—and includes the Ardusat Space Program through an exclusive partnership with a satellite company in the Bay Area. Next Generation Science Standards (NGSS) are K­–12 science content standards developed by states to improve science education for all students

Because Learning provides a custom platform for teachers to run experiments, take courses, and track progress. This web-based software communicates with sensor kits given to students to track real-time experiment data. The Classroom Launch Pack includes 15 Sensor Kits and over 150 customizable lessons, with new lessons added each month. Other resources include teacher guides, student worksheets, unit videos with tips and suggestions for teaching, and professional development resources.




For Home

For users at home, Because Learning will send new educational experiences each month that are powered by its advanced Sensor Kit. While at home, children can choose what they want to learn, then follow carefully designed lessons. Every month, five new lessons are provided to continue each child’s learning. Home users also gain access to Because Learning’s resource of over 150 customizable lessons.


Lessons Platform

Students that already have their own experiment hardware can access Because Learning’s Lessons Platform. The Lessons Platform helps students create live data streams, analyze data using data science tools, store and publish data, and subscribe to experiments published by other students throughout the world.



Space Program

Through the Ardusat Space Program, students can run experiments on actual in-orbit satellites to collect real space data. Because Learning’s Mission Control team will help the students design their experiments, which include: choosing sensors, collection frequencies, and locations around the globe that will deliver the kind of data professional scientists work with. The experiments will be facilitated through the company’s partnership with Spire, which will provide the data collected on its satellites. With the live satellite tracker, classes will be able to monitor experiments in real-time. See a real-time globe visualization of the current position of Spire's satellites running some of Ardusat's experiments in space.




Use of Proceeds and Product Roadmap

Because Learning has several opportunities with partners to expand its product line in China. Because Learning has an opportunity to enter as a U.S.-based EdTech company that offers a program for both the after school programs and traditional school models. The company has signed agreements with providers that sell into both markets.

The funds from this raise will be used to support the company’s expansion into China, helping set up a China-based subsidiary and hiring an in-country manager. Because Learning also plans to use the funds to grow its domestic business by investing in marketing to help generate more leads and by hiring sales people to close deals.

If the minimum $25,000 is raised, Because Learning will spend the majority of funds to hire an in-country manager for China and manufacturing of additional inventory. If the maximum $107,000 is raised, Because Learning will also spend the majority of proceeds to hire an in-country manager for China and manufacturing of additional inventory.


Business Model

Because Learning sells to both school and individuals.

Schools

Classroom Launch Pack: $3,700

The Classroom Launch Pack provides teachers with resources that enable their students to conduct more than 150 hands-on experiments using the Sensor Kits—15 kits included per pack. The materials help students learn the fundamentals of remote sensing, coding, and other STEM related concepts. Teachers will have support from the Because Learning Support Team and access to materials that can help implement programs in their classroom. The pack also includes a one-year subscription to the Learning platform for an entire class. Annual renewal for the platform costs $1,500.

Individuals

Monthly, quarterly, or annual subscriptions: Starting at $18 per month, the subscription includes one sensor kit and access to more than 150 lessons which cover standards-based subjects like math, science, engineering, and more.





User Traction

The Because Learning lessons and sensor kits are used in 30 countries and 400 schools around the world.

Because Learning has worked with partners such as the University of California Berkeley on a National Science Foundation grant, the Association of Space Explorers to bring learning experiences to students and educators, and satellite-powered data company Spire for space-to-cloud data analytics.

Because Learning has also signed agreements with two distributors—Astronautic Technology and Migo Edu—for its planned 2018 expansion into China.


Press

PR Newsire: Ardusat Rebrands as Because Learning, Expands Curriculum and Adds Subscription Model for Educators and Consumers

Tutorful: The 90 Hottest EdTech Tools According to Education Experts (Updated For 2018)

THE Journal: Open STEM Platform Expands Curriculum, Technology and Professional Development Content

KSL.com: Utah entrepreneur getting kids fired up about space science

EdSurge: Ardusat Launches Kids’ Science Experiments on Space Odyssey


Historical Financials

In the first half of 2018, Because Learning generated approximately $138,000 in revenue. In 2017, the company generated roughly $272,000 in revenue, compared to more than $258,000 in revenue in 2016. Revenue growth flattened in 2017 as Because Learning shifted focus from a hardware-based revenue model to focus on recurring revenue. To drive this shift, the company released its eHub platform in late 2016 and started charging an annual site license fee to schools.

In the first half of 2018, cost of goods sold and operating expenses totaled approximately $16,000 and $301,000, respectively.  In 2017, expenses totaled $1.01 million ~$110,000 for cost of goods sold and ~$900,000 for operating expenses). In 2016, expenses totaled almost $1.2 million (~$182,000 for cost of goods sold and ~$1.01 million for operating expenses). Payroll expenses were the primary contributor to operating expenses, generating 70%, 64%, and 66% in 2018, 2017, and 2016, respectively.

Because Learning had a net loss of close to $179,000 in the first half of 2018. In 2017, the company had a net loss of approximately $650,000. This was an improvement from 2016 when the company had a net loss of approximately $937,000.

Industry

The global education technology—EdTech—market is forecast to grow at a compound annual growth rate of 18.3%, from $17.7 billion in 2017 to $40.9 billion in 2022.  This growth is expected to be driven by China, where the EdTech market is expected to be supported by increasing household spending power, an undersupply of education materials, and the introduction of the two-child policy.

In the U.S., current expenditures for public K-12 schools are projected to be $611.9 billion for the 2017–2018 school year. By 2025, total expenditures for public K-12 schools are expected to increase to more than $822 billion, or $16,000 per student.  U.S. schools and districts purchase an estimated $1.1 billion of STEM resources each year.  According to a 2011 survey by Harris Interactive, the overwhelming majority of parents of K–12 students (93%) believe that STEM education should be a priority in the U.S. and half of parents would like to see their children pursue a STEM career. However, approximately only half of parents agree that STEM education is actually a top priority for the country.

In the first half of 2018, U.S.-based EdTech startups raised $739 million in venture capital across 62 deals. Year to date as of June 2018, there have been at least 30 U.S. EdTech acquisitions.  In all of 2017, EdTech startups raised over $1.2 billion across 126 deals. Of those, $753 million was invested in U.S. companies that were focused on the K-12 market. Curriculum-based companies which develop products that help educators teach concepts and skills—received over $400 million in funding in 2017.

Because Learning plans to expand into the Chinese market. In the first half of 2018, China-based EdTech ventures raised $2.22 billion across 270 deals, compared to $2.28 billion across 251 deals in all of 2017. For the first half of 2018, language-related startups received the largest amount of investments, followed by K-12 with $482 million in total investments.

Team

Sunny Washington, Co-Founder and CEO: Sunny has spent more than 15 years working in the EdTech industry, most recently coming from Instructure—which went public in 2015—where she was one of its early employees. During her time at Instructure, she assisted in building the sales, business development, account management, and marketing teams. Prior to Instructure, Sunny worked as a program manager for Certiport, a company that builds certification products for Microsoft, Adobe, and other software providers. During her time at Certiport, she launched a digital literacy certification program that was used in over 80 countries. Certiport was later acquired by Pearson.




Kevin Cocco, Co-Founder and CIO: Prior to Because Learning, Kevin was the founder of SproutLoop, a development and consulting company based in Salt Lake City, Utah. He formerly was the VP of IT at the Professional Education Institute (PEI) where he led development of the Interactive training platform, marketing, and analytics technologies. Prior to PEI, he worked at Discover Card for 12 years where he held several positions and helped lead the infrastructure and development teams that provided analytics and business automation solutions across the company’s national operations centers. Kevin holds a BS Degree in Computer Science from Western Illinois University.

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