Another Education Company Goes Public: Instructure IPO Gives Ed-Tech Firm $2.9 Billion Valuation

Contributing Writer

Instructure, maker of the popular learning management system Canvas, is the latest ed-tech firm to hit the public markets.

The company raised about $250 million during its recent initial public offering, selling 12.5 million shares at a midpoint price range of $20. The IPO gives the company a valuation of almost $2.9 billion, according to a regulatory filing.

It also marks a return to the public markets for Instructure, which had been traded on the New York Stock Exchange since 2015 until private equity firm Thoma Bravo acquired it for $2 billion in March 2020. Instructure is once again using the INST ticker symbol on the NYSE, and Thoma Bravo retained a majority of the company’s shares — 88 percent of common stock.

The Instructure IPO comes amid a flurry of recent public market activity for ed-tech companies.

Coursera, the Mountain View, Calif.-based online education company that partners with universities to offer courses, went public in March, and Duolingo, the language learning app developer, is planning to go public (more on that below). Likewise, PowerSchool, a major provider of student information systems and an array of other K-12 tools, has also filed its IPO. Meanwhile, several other ed-tech SPACs are actively searching for companies to take public. 

Analysts have said that the spotlight shined on ed-tech products during COVID-19 remote learning has stoked massive investor interest in taking education companies public. 

In a regulatory filing, Instructure says distance learning mandates across the globe have not only accelerated the adoption of ed tech but that the transformation in education to using more tech tools will be permanent beyond the pandemic.  

“Students and teachers have now fully embraced technology in education, and the reputational and systemic risk from academic institutions of being unable to provide redundancy and contingency is too great to ignore,” the company said in a filing. “The capabilities of learning platforms along with the institutional scars from the pandemic make technology implementation an investment priority even if budgets tighten in the future.”

From the Instructure IPO Filing

  • The Canvas LMS had more than 30 million K-12 and university users in 2020. 
  • Instructure sees the global LMS market as a $5 billion market opportunity.
  • While nearly every higher education institution is using an LMS of some kind, “K-12 adoption of LMS has not been as robust.” 
  • In K-12, paid LMS penetration rate rose from 30 percent to 41 percent between 2019 and August 2020, and this “presents a large greenfield opportunity for education technology to replace free solutions with paid learning platforms and monetize demand for broader product suites.” 
  • Instructure is also planning for more international usage of its Canvas LMS, saying “the opportunity for leading learning platforms to expand internationally is significant, with Western Europe representing the most well-organized and well-funded region.” 
  • The company warned investors about a “history of losses,” saying it expects to continue incurring losses for the “foreseeable future.” The company lost $178 million during 2020, and reported a loss of $33.1 million during the most recent financial quarter, which ended in March. 


Language-learning platform Duolingo is expected to go public later this week, according to a Nasdaq IPO calendar, in another major ed-tech IPO being closely watched by investors.

The Pittsburgh-based company revised the terms of its IPO on Monday, raising the price range to $95 to $100 per share from a prior range of $85 to $95 per share. 

Duolingo is planning to offer about 5.1 million shares during the IPO and raise in the neighborhood of $510 million, which would give the company a valuation of about $3.4 billion, according to a regulatory filing. It plans to list on the Nasdaq under the symbol DUOL.

The company says it has about 40 million monthly active users learning 40 languages. And Duolingo is looking to capitalize on a usage surge of online language learning apps during the pandemic, saying future growth will continue to be driven in part by a shift away from in-person offerings. 

“The majority of spend today is still offline, but the market is rapidly shifting online, with online spend projected to reach $47 billion in 2025,” Duolingo wrote in a regulatory filing. 

From the Duolingo IPO Filing: 

  • Duolingo says that almost 40 percent of foreign language teachers in U.S.-based K-12 schools use Duolingo in their classrooms
  • With more than 500 million downloads, the Duolingo app is the top-grosser in the education category on both Google Play and Apple’s App Store
  • Fifty-one percent of revenue comes from Apple’s App Store and 19 percent from the Google Play Store 
  • Paying subscribers increased 84 percent year over year, from 0.9 million as of Dec. 31, 2019, to 1.6 million as of Dec. 31, 2020 
  • User base has grown from 27 million at the end of 2019 to 40 million as of the end of March 2021
  • Revenue in 2020 totaled $161.7 million, up 129 percent from the year before. The company lost $13.6 million and $15.8 million, respectively, during those periods. Revenue for the quarter that ended in March 2021 was $55.4 million with a net loss of $13.5 million, while financials for the three-month period ending in June are expected to show revenue between $57.3 million and $58.5 million, and a net loss between $500,000 and $3 million.

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