Tracking Lessonly’s Path To An $8M Series B

This week, Lessonly announced that it had closed an $8 million Series B, led by OpenView with participation by Rethink Education, High Alpha Capital, and Allos Ventures.

The new capital brings Lessonly’s total raised to date to $14.1 million, according to Crunchbase. The firm raised its $5 million Series A in March of 2016, putting its Series B just outside the normal 18-month window.

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Lessonly is notable for a few reasons, including the fact that it is based in Indianapolis. While a fine city, Indianapolis is a nascent startup hub. According to Crunchbase, Lessonly’s recent round is the city’s first known Series B since April of 2016, when Odyssey raised $25 million in its B. There were three recorded Series Bs in the city in 2015.

None of the preceding should be read as impolite. We do our best to keep an eye on the broader startup landscape at Crunchbase News, often reporting directly on the geographic pulse of new company creation and venture interest. The world of startups and money may have its domestic Rome in the Bay Area, but there’s a lot going on in the rest of the country.

Regardless, what about Lessonly attracted its new capital? Putting aside its founder’s profile, let’s track the company’s customer growth and revenue expansion to find out.

Relative Numbers

Lessonly, like many private companies, reports results in terms of their relative performance. Usually, this means percentage-growth figures presented in year-over-year formulations like “we sold 84 percent more widgets this year than last year.”

In that vein, here’s what we know about Lessonly’s percentage revenue growth over time [all emphases added]:

• October 2013: “According to Yoder, his company has grown its revenue 245 percent month-over-month since January of this year.”
• December 2014: “According to the company’s founder and CEO Max Yoder, Lesson.ly’s revenue has grown 850 percent this year. He expects the company’s top line to grow 300 percent in 2015.”
• October 2017: Lessonly has “more than doubled revenue” in each of the last four years, according to Kyle Lacy, it’s VP of Marketing.
• October 2017: “The company wouldn’t disclose revenue figures, but Yoder said 2017’s revenue is expected to double 2016’s figure.”

So we can see the firm’s growth rate falling as its revenue base expanded. That’s normal. But it has kept itself over the 100 percent growth mark through 2017, which is impressive. Presuming that the firm did manage to triple in 2015 after rapid (percentage) growth in its early life, the firm’s doubling should keep its investors content for now.

At the same time, let’s see what we can tell from its reported customer numbers:

• March 2016: 250 customers.
• Fall 2017: 425 customers.
• October 2017: 500 customers.

The 250 and 500 numbers come from the company’s own releases, while the 425 number comes from, and this is fun, an alma mater profile of the CEO. Regardless, this helps some back up the revenue figures we had before. Sadly, I failed to get a customer number the first two times I wrote about the company, so we have less historical data of that sort to stack against the Lessonly’s revenue growth figure.

However, we do know that Lessonly’s revenue growth got it to the 250 customer mark by March of last year. By this November, the company grew to 500 customers. That progression grounds the firm’s Series B. If Lessonly was worth a $5 million injection for getting to 250 customers by 2016, raising $8 million when it doubled its past performance (in terms of new customer-acquisition) in far less time seems reasonable.

And that is about as much blood as we can draw from this particular, partial historical record.

Illustration: Li-Anne Dias