Homer nabs $50M from Lego, Sesame Workshop and Gymboree for its early learning apps

For better or worse, tablets and smartphones have become a cornerstone of how many smaller children pass the time. Today, a company that builds literacy and other educational apps to help make that time more worthwhile is announcing a large round of funding from a number of strategic backers to move into the next phase of its growth, building not just apps but a comprehensive learning platform.

BEGiN, the startup behind the Homer early learning program aimed primarily at kids between the ages of two and eight, has raised $50 million in a Series C round of funding, money that it plans to use to, in the words of  CEO Neal Shenoy (who co-founded the company with Stephanie Dua), create a “systematic experience” in learning.

The startup has been around since 2013 and got its start with literacy — it says that its reading apps are currently the most popular for children under 5 in the US App Store — which remains its core subject area, but it has also expanded into other subject areas and plans to take that further.

“We are launching the industry’s first comprehensive early learning program,” he said in an interview. “And so from a curriculum perspective, this will extend beyond reading to include math, critical thinking, creativity, and socio-emotional learning, we will deliver this learning these experiences across digital, physical, tangible product, and in class mediums, we will focus on both serving the child and the parent and the relationship between them says the parent is the child’s first teacher.”

The round includes a number of strategic investors that will help bring this together. The backers include LEGO Ventures, Sesame Workshop, the principal investor in Gymboree Play & Music, 3One4 Capital, Trustbridge Partners and Interlock Partners. In addition to the $50 million, Liquidity Capital is also contributing $25 million in trajectory-based funding for further growth. The strategic backers plan to help build the curriculum, the products and the distribution for the new program, he said.

The valuation of Homer, and BEGiN itself, are not being disclosed, but the company said that it already has hundreds of thousands of subscribers and generates tens of millions of dollars in revenues.

The funding news and strategic expansion comes at a critical time in the educational industry, and e-learning in particular.

Children’s educational apps — and taking even just those focused on early learning (Age of Learning is another leader in this segment of the market) — have been around for as long as the internet itself. But they have always existed in conjunction with a host of more conventional resources, such as nurseries and schools, playgroups and other activities, and general socialization. The global health pandemic, however, has changed all that for many people: many families, kids included, are spending more time at home and away from teachers and the (real life) social networks that play a part in how they develop.

That’s put a huge emphasis on rethinking how tech-based tools, starting with gadgets like tablets and software like apps, can make up the difference, for now or maybe even for longer, to make sure that kids continue to learn, but also feel engaged and stimulated at a time when a lot of options for doing that have been reduced.

Joining up app makers with those who make educational physical objects is a not a new thing per se: “educational toys,” as any parent knows, are a dime a dozen in terms of supply (if not cost… they can be expensive). But it’s interesting to see toy makers joining up with those who build entertainment content and other products for children for an even bigger-picture approach to identifying and building to address the challenge of how best to deliver some aspects of early-years education.

Indeed, LEGO Ventures is a newish effort from the Danish modular toy maker, founded to help the company, now over 70 years old, step into the next phase of how children learn and keep themselves entertained.

“HOMER’s vision and approach to playful learning fosters curiosity and collaboration in children that aligns closely with LEGO Ventures’ investment ethos supporting founders and companies in bringing the LEGO idea of learning-through-play to life,” said Jamie Beaumont, Managing Partner, LEGO Ventures, in a statement. “We look forward to working with Neal and the excellent team he has built, and supporting HOMER as they grow and scale their purposeful play offerings across hands-on, in-person and digital experiences.”

As with e-learning companies targeting other age groups, the startup has seen a huge boost in business in the last several months, with a 280% increase in annual subscriptions, 230% increase in website subscriptions, and children accessing 30% more lessons than this time last year. (Overall, the company has had 80%+ year-over-year growth since launch.)

“With its focus on research and kid-centric design, and expansion to embrace the whole child curriculum, HOMER’s approach reflects the mission of Sesame Workshop to help kids grow smarter, strong and kinder,” said Steve Youngwood, President of Media and Education, and Chief Operating Officer of Sesame Workshop, in a statement. “We’re excited to support HOMER’s growth and to look for further ways to partner with them to give young children the best possible start at a critical time of their learning and development.”

Additional reporting Natasha Mascarenhas