Kahoot! is a learning platform that enables users to create and participate in quiz-based games, which are known as kahoots.
Kahoot! makes money from premium subscription packages as well as by licensing its game-based content to other companies.
Founded in 2012, Kahoot! has grown to become one of the world’s leading EdTech companies. The company went public in October 2019.
What Is Kahoot!?
Kahoot! Is a game-based learning platform that allows users to create and play educational games as well as quizzes. These games are referred to as kahoots.
In essence, Kahoot! presents the player with a question and then optional multiple-choice answers. The question can be accompanied by additional media files such as images and videos to add context and promote interactivity.
Teachers and other educators can either create a quiz themselves or choose from the thousands of questionnaires that had already been developed by Kahoot!’s user base.
On top of that, Kahoot! provides a slew of additional features that enhance a student’s learning progress. With Ghost, for instance, students can play against their own previous high scores.
Teachers then receive detailed reports on how each of their students has performed and where there’s room for improvement.
Kahoot! can, furthermore, be integrated with almost any modern video conferencing tool, such as Microsoft Teams or Zoom. That also allows teachers to host remote learning sessions.
Apart from its games, Kahoot! also offers a variety of other products. Examples include a digital whiteboard, an online academy for others to exchange content and tips, or a corporate learning platform named Motimate.
Kahoot! itself can be accessed by visiting the company’s website or by downloading any of its mobile and tablet apps (available on Android and iOS devices).
How Kahoot! Started: Company History
Kahoot!, headquartered in Oslo, Norway, was founded in 2012 by Alf Inge Wang, Åsmund Furuseth, Jamie Brooker, Johan Brand, and Morten Versvik.
Whilst the business was formally launched, its inspiration dates back all the way to 2006. Back then Alf Inge Wang, a professor from the Norwegian University of Technology and Science (NTNU) in Trondheim, was overseeing Morten Versvik’s master’s thesis.
Out of his research arose a game called Lecture Quiz, which formed the eventual basis for what later turned into Kahoot.
Over the coming years, the duo had been joined by Brand, Booker, and Furuseth who provided them with additional skills in the fields of coding (Brand), design (Booker), as well as financing (Furuseth).
Finally, after six years, they ended up incubating the company in Oslo while raising a small seed round to finance the launch. They, furthermore, rebranded the company from Lecture Quiz to Kahoot!.
In March 2013, they rolled out the first beta version of the product while presenting it live on stage at SXSWedu in Austin, Texas. Then, in August of the same month, the product was finally unveiled to the public.
Within a matter of months, Kahoot! had already managed to attract millions of players to its game. Kahoot! pretty much grew by word of mouth when teachers, who saw immediate benefits in terms of class engagement, recommended it to their fellow colleagues.
On top of that, given that users could create their own games (and thus, for instance, adapt it to their own curriculum) allowed for the creation of millions of games. These games could then be used by others as well.
Lastly, since Kahoot! was (and the basic version still is) free to use, it wasn’t creating any budgetary concerns for the notoriously underfunded education industry.
The continuous growth allowed the team to raise their first official round of funding. In June 2015, the company raised $6.5 million in funding. At that point, it had managed to attract over 35 million unique users to its platform.
In 2016, the company was able to hit the next stage of growth when it introduced its first-ever mobile phone apps for the Android and iOS ecosystem. Just days after the launch, those apps were already topping the respective store’s educational charts.
The growth was rewarded with another round of funding. In September, Creandum, Northzone, as well as Microsoft’s Venture Fund M12 poured another $10 million (Series A) into the company. However, not everything was always going according to plan.
A month after the funding announcement, long-time CEO and founder Johan Brand stepped down from his role due to burnout (which he only revealed much later). His replacement became Erik Harrell, an experienced executive from Opera Software.
Harrell helped to take Opera from a free product to a company with over $700 million in annual revenues. Given that Kahoot! was still free to use, his mission became pretty clear: figure out how to make us money.
However, most of his time was still spent on growing the product. In May 2017, for instance, Kahoot! announced an integration with Microsoft Teams to engrain itself more with corporations. Then, in July, Kahoot! joined the Disney Accelerator program as one of 11 companies. Being in the program would allow the platform to launch features and products in cooperation with Disney.
Its continuous growth (the company counted over 50 million active users when it joined the accelerator) netted them an extension of their Series A round, adding another $10 million to the round (for a total of $20 million).
Then, in October, the company finally began to generate revenue. It launched a premium product aimed at corporates in need of employee training (more on that in the next chapter). By January 2018, the company had over 70 million monthly active users. Additionally, more than 50 percent of all the students in the United States, kindergarten through twelfth grade (or 30 million out of an estimated 60 million), were playing Kahoot! games on a regular.
Despite the exponential growth, the company had to face another leadership change. In February, Harrell stepped down from his position as CEO due to disagreements about the firm’s future monetization strategy. Åsmund Furuseth, the firm’s co-founder, became his replacement.
Weeks after his stepdown, Kahoot! managed to raise another round of funding (Series B), this time netting them $17 million. That round was eventually extended in October, which allowed the team to raise another 126.5 million Norwegian krone (around $15.4 million). As a result, Kahoot!’s valuation rose from $100 million to $300 million in a matter of seven months.
These two funding rounds allowed Kahoot! to invest in growth – this time by means of acquisition. First, the company launched its own accelerator program (named Kahoot! Ignite) to be able to incubate and invest in other EdTech startups, which it could potentially either partner with or outright acquire.
Then, in May 2019, Kahoot! acquired its first business. It bought DragonBox, a startup that builds math apps, for $18 million. Six days later, it acquired reading app Poio for $6.5 million.
Later that year, in October, Kahoot! went public on the Norwegian Merkur Market, which is a quasi-stepping stone between being a fully private company and a publicly-listed one. As such, it only made a small portion of its shares available to the public. The lightweight IPO yielded them another $25 million to work with.
However, the firm had to go through another leadership change yet again. Åsmund Furuseth stepped down as CEO to become the firm’s Chief Product Officer. His replacement became Eilert Hanoa, a previous investor in the company who sat on its board since 2015.
Despite the constant executive shakeups, 2020 would turn out to be an extremely successful year nonetheless. Millions of students and teachers across the world, fueled by lockdown measures due to the coronavirus pandemic, were flocking to the platform to continue their classwork.
Essentially, the whole EdTech sector was lifted to heights it couldn’t have imagined. Companies like Coursera or Duolingo were raising hundreds of millions and, in some instances, even able to go public after almost a decade in business.
Kahoot! was certainly no exception. Between June and October, the company announced three rounds of funding, injecting $62 million, $28 million, and $215 million into the Kahoot!, respectively. When SoftBank invested the $215 million in October, Kahoot!’s business was valued at a whopping $2.4 billion, a fivefold increase from when it went public a year prior.
Furthermore, Kahoot! continued to double down on its strategy to become a full-stack education platform for all kinds of organizations and use cases. In September and November 2020, it acquired Actimo (employee engagement and onboarding platform) and Drops (maker of language learning applications) for $33 million and $50 million, respectively.
The company also announced integrations and partnerships with the likes of Bitmoji, Disney (for branded games), as well as Zoom. In 2021, the company stayed on course and continued its expansion efforts.
Over the course of three months, from February to May, the company announced three acquisitions. In February, it snatched up Whiteboard.fi for $6 million. Corporate learning platform Motimate was purchased for around $25 million in April. Yet, in May, its biggest acquisition to date would be announced.
Kahoot! paid a whopping $500 million to acquire Clever, a U.S.-based single sign-on portal for educators, students, and their families. The acquisition allowed Kahoot! to double down on its platform strategy in which it plans to serve the educational needs of everyone, ranging from corporations all the way to schools.
Today, Kahoot! employs close to 500 people who work out offices in Norway, Poland, Spain, Denmark, the United States, and more.
How Does Kahoot! Make Money?
Kahoot! makes money from premium subscription packages as well as by licensing its game-based content to other companies.
Kahoot! operates on a freemium business model, meaning its quiz games can be played at no cost. However, if certain users like corporate clients need additional customization, they can have that by subscribing to its premium plans.
The main advantage of that approach is that Kahoot! is able to not only familiarize people with its products but oftentimes create enjoyment when using the product. The positive association, as well as great reviews, then make it easier for the company to sell its packages to corporate clients and alike.
Let’s take a closer look at each of the firm’s revenue streams in the section below.
The vast majority of the revenue that Kahoot! generates comes from the subscription packages that it sells to both corporations as well as educational institutions.
The company has a variety of offerings available, including:
- Kahoot! Starter as well as Kahoot! 360 Standard, Presenter, or Pro targeted at individuals
- Standard, Presenter, or Pro for teams
- Kahoot! 360 for Enterprises
- Kahoot! Event Bronze, Silver, or Gold for one-time events
On the enterprise side, Kahoot! works together with world-leading corporations such as Facebook, Google, Indeed, Amazon, Salesforce, and more.
A different set of features will be made available depending on what type of package is chosen. Generally speaking, the costlier the package, the more participants someone can host.
Furthermore, Kahoot! also generates subscription revenue from the various acquisitions it has made since 2019. The acquiree’s products were then either bundled into the above offerings or remain standalone products (such as in the case of Clever).
The goal hereby is to become a full-fledged educational platform that is able to serve the needs of every imaginable customer. This, in turn, increases the firm’s total addressable market (TAM) and provides them with additional opportunities for cross-selling at different user touchpoints.
Another income stream for Kahoot! is licensing its content out to other publishers. Dubbed Kahoot! Publisher, the offering “helps educational publishers, brands, and content creators transform their content into interactive learning experiences while ensuring control over commercialization.”
That essentially means that these publishers can embed Kahoot! games and other content natively into their own platform.
Partners using that solution include world-renowned brands like Time Magazine, National Geographic, or Merriam-Webster.
Kahoot! monetizes its Publisher product by charging an annual fee. The company has two available plans, namely P1 and P2, which cost €6,000 and €12,000 per year, respectively.
Kahoot! Funding, Revenue & Valuation
According to Crunchbase, Kahoot! has raised a total of $363.9 million across nine rounds of equity funding.
Notable investors include Softbank, Northzone, the Disney Accelerator, Creandum, Microsoft, and many others.
When Kahoot! Went public back in October 2019, its business was being valued at about $500 million. Today, its valuation floats at around $3 billion.
For the fiscal year 2020, Kahoot! Reported annual revenues of $31 million, up from the $8.5 million it generated back in 2019.