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GSV Capital is the first publicly traded security giving growth equity investors access to the world's most dynamic, VC-backed private companies.

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NASDAQ: GSVC
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Why We Like

$1.7 million NAV|0.7% of GSVC

Founded

2004

Capital Raised

$43 million

Investors

GSV Capital along with John Doerr, Reed Hastings, GSV Acceleration and others.

GSV Investment Theme

  • Cloud/Big Data
  • Marketplaces
  • Sustainability
  • Education

Overview

DreamBox Learning offers K-8 adaptive and personalized SaaS-based mathematics instruction. The company currently offers over 2,000 different math lessons that are aligned with Common Core State Standards as well as the Focal Points instruction developed by the National Council of Teachers of Mathematics. Once a student enters DreamBox’s highly engaging learning environment, that student has millions of paths through the DreamBox curriculum—continuous and dynamic assessment that enables fine-grained adaptations. Independent academic studies and real-world case studies have consistently confirmed the efficacy of DreamBox’s learning approach.

4Ps
Why We Like It: The Four Ps

Why We Like DreamBox Learning

The Company’s vision for the “future of learning” revolves around a few core beliefs: 1) students persist in learning when they engage at the appropriate level, with instant feedback and a carefully controlled pace of learning; 2) students will drive their own learning with adaptive technologies that can shape their learning in real-time; 3) students learn and progress based on mastery, not age or grade. Through its intelligent, adaptive, and highly engaging platform, DreamBox offers a best-in-class comprehensive learning experience.

People

Netflix CEO Reed Hastings acquired DreamBox in April 2010, and since that time, Reed and the Board have hired an exceptionally talented management team with significant experience in K-12 education and product development.

Product

The DreamBox program is split into three “environments” based on grade levels: K-2, 3-5, and 6-8. DreamBox teaches math concepts and builds fluency by capturing and assessing data on approximately 60 behaviors as a learner works on a single problem, including those strategies used to solve the problem. Using this data, DreamBox rapidly responds by adjusting lessons, providing scaffolding and hints, and selecting appropriate Virtual Manipulatives to support students toward mastering concepts. Additionally, by using continuous, embedded assessments throughout the program, DreamBox adapts accordingly to meet a learner’s needs, and simultaneously provides teachers, administrators, and parents with informative and detailed progress reports.

Potential

Total K-12 expenditures in the US are currently over $650 billion (BMO, Education and Training 2010 report). Additionally, there are almost 51 million students in public schools in the US today. Within this broader market, the US K-12 education technology market represents over $23 billion today. As schools and curriculum continue the shift to digital content and assessment, the education technology market will continue to grow. There are also several macro trends driving the rise of a blended learning model, among them: 1) higher expectations for results driving the push to individualized instruction, 2) funding cuts due to macroeconomic conditions, and 3) students and teachers are increasingly tech-savvy, while states are orchestrating improved student Internet access.

Megatrends

Knowledge; Globalization; Internet; Demographics; Outsourcing; Network Effects

How Big Can This Be?

DreamBox is at the forefront of adaptive and personalized learning, and offers a proven product suite through an innovative selling model that enables rapid adoption. We believe DreamBox could attain market leadership in the K-5 mathematics instruction space, especially given its very rapid early growth.

Predictability

The Company’s SaaS model allows DreamBox to enjoy high levels of visibility on future recurring revenue. Additionally, because DreamBox uses a highly innovative and focused selling model, the Company has dramatically reduced its sales cycle compared to traditional K-12 software providers. In addition, the DreamBox platform can aggregate a detailed learning data set on millions of students that dynamically adjusts as more data is gathered for individual students and across the set of all students. DreamBox applies its analysis tools to the overall structure and connections between the lessons themselves, resulting in a true network-effects type model.

Risks

The K-12 software market is still subject to US economic downturns, particularly federal and state funding that relies on tax revenue. DreamBox offers a very cost-effective product, but may still suffer lower sales if the US economy experiences a slow recovery or downturn. The efficacy of DreamBox’s K-5 products are dependent on reliable delivery over broadband transmission, and to the extent that such transmission suffers or fails, the Company’s adaptive and personalized learning experience my also suffer. The K-12 software market is highly competitive, with many incumbent competitors who have significantly greater financial and operational resources than DreamBox.

GSVC percentage figures are based upon the fair value of each holding as of the quarter ended September 30, 2016, or the cost basis of the holding (exclusive of transaction costs) if the investment closed subsequent to September 30, 2016. In either case, these values are divided by the fair value of total portfolio investments of GSV Capital as of September 30, 2016.

GSV stands forGlobal Silicon Valley
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