EdTech Prodigy Education Raises Over $125 Million in Series B

By Bruce Harpham | Tuesday, 26 January 2021 | Startup, Tech, Education

Prodigy raised $125 million for its business in January in its Series B funding round. Based in Toronto, the edtech startup is best known for its free math games aimed at Grade 1 to Grade 8 students. The company has over 100 million registered users as of January 2021.

Prodigy Grows With A Freemium Model

Prodigy offers its games on a "free forever" basis to students, parents, and schools. The company earns revenue by charging for optional enhancements to in-game characters, such as clothing for characters. The company's premium membership tier starts at $4.99 per month with video lessons and access to goal tracking.

In addition to premium business plans, Prodigy also offers paid one-on-one math tutoring services. The company charges $30 for a single session and $24 for weekly sessions. The company's tutoring price is below the average US math tutoring fee of $40 per hour, according to Tutors.com.

Prodigy Meets Math Curriculum Standards In Several Countries

The startup’s strategy includes meeting specific math education curriculums in several jurisdictions. In the US, the company's math content aligns with Common Core standards for Grade 1 to Grade 8. In Canada, the company has aligned with the Ontario curriculum. Ontario is Canada's largest province, with 38% of the country's total population. Prodigy also meets math curriculum requirements in India and the United Kingdom (UK).

TPG Growth and Other Investors Fuel Prodigy

Prodigy has raised $125 million in funding from TPG Growth and Canadian Business Growth Fund. TPG, which has $85 billion in assets under management, has invested in a wide variety of successful startups such as Box, Domo, and Zscaler. Also, TPG is active in real estate investments in Asia, Europe, and the US. Jacqui Hawwa, from TPG, will join the Prodigy Board of Directors.

The Canadian Business Growth Fund, financed by large Canadian banks and insurance firms, invests mainly in Canadian firms. The fund generally prefers to invest in companies with at least $5 million CAD in revenue and usually invests between $3 million and $20 million CAD. The fund's two exits include Mobile Klinik (a cell phone repair company with dozens of locations) and PayBright (an installment payment platform).

Prodigy Faces Competition From Other Free Education Providers

Prodigy's free education business model is comparable to Khan Academy. Founded in 2008, Khan Academy is an educational nonprofit that provides free lessons in math, science, history, and other topics for students. The education company raised $49 million in revenue, mainly donations, in 2019, and more than 2.7 million students have signed up for Khan Academy's SAT preparation offerings.

Fortunately, there is a growing demand for digital education classes. According to Grand View Research, the global online tutoring market was worth $4.8 billion in 2019. North America accounts for approximately one-third of the global online tutoring market.

About the Author

Bruce Harpham

Bruce Harpham is an author and marketing consultant based in Canada. His first book "Project Managers At Work" shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.