Microsoft Acquires TakeLessons: Expanding EdTech Footprint

Microsoft Expands Education Footprint with TakeLessons Acquisition

In January, Microsoft reported that its Teams collaboration platform had surpassed 100 million student users. This growth was significantly influenced by the widespread shift to remote and hybrid learning models during the COVID-19 pandemic. Now, the company is furthering its investment in the education sector through a new acquisition.

Acquisition of TakeLessons

Microsoft has acquired TakeLessons, a platform connecting students with individual tutors. These tutors offer instruction in diverse areas, including music, languages, academic subjects, professional skills, and hobbies. The platform also facilitates lesson booking and organization, supporting both online and in-person instruction.

While the financial details of the deal remain undisclosed, Microsoft is actively seeking to reveal them. San Diego-based TakeLessons had previously secured at least $20 million in funding from investors like LightBank, Uncork Capital, and Crosslink Capital. The company confirmed the acquisition via a Q&A on its website, stating it will continue operations as usual, with plans to broaden its global reach.

Market Context and Valuation

The exact number of active students and tutors on TakeLessons at the time of acquisition is currently unknown. However, for comparison, GoStudent, a prominent European online tutoring platform, achieved a $1.7 billion valuation after raising $244 million in funding earlier this year. Other online tutoring services, such as Brainly, have also seen valuations reach the hundreds of millions.

Considering TakeLessons’ comparatively smaller funding rounds, its valuation was likely lower. Nevertheless, this acquisition provides Microsoft with essential infrastructure to establish a stronger presence in the mass-market online education space, potentially competing with established players.

TakeLessons’ Offerings and Evolution

TakeLessons provides instruction across a broad spectrum of disciplines. Initially focused on music lessons, the platform has expanded to include languages, academic support, test preparation, computer skills, and creative crafts. Founded in 2006, it began by connecting students with local, in-person tutors.

The platform subsequently integrated online lessons to complement its original service. The pandemic accelerated this transition, with online tutoring now representing the majority of offerings on TakeLessons. Lessons are primarily delivered one-on-one, but the platform also supports group learning through its Live feature.

Microsoft’s Strategic Rationale

The global shift towards online education is a key driver behind Microsoft’s strategic interest in TakeLessons. Schools worldwide sought improved online learning platforms during lockdowns, leading educators, families, and students to adopt and pay for various tools.

Microsoft has been actively positioning Teams as a leading solution in this area, building on existing market traction and previous investments. However, the landscape is becoming increasingly competitive.

Competitive Landscape and Microsoft’s Approach

The rise of platforms like Google Classroom, alongside specialized tools for video lessons (such as Zoom), lesson planning, and on-demand tutorials, has intensified competition. Microsoft’s strategy centers on consolidating features within a single platform to enhance user engagement and value.

This suggests further acquisitions and feature launches to cover services not currently offered through its educational tools. For example, one school opted to consolidate its homework planning tools within Teams, eliminating the need for a separate paid application.

Synergies and Potential Opportunities

While TakeLessons complements Microsoft’s school-focused education strategy, it also caters to a broader, mass-market audience. This includes individuals seeking to supplement their formal education, as well as lifelong learners and professionals pursuing new skills.

The acquisition presents opportunities beyond traditional student tutoring, particularly in the realm of professional development. Microsoft CEO Satya Nadella and LinkedIn CEO Ryan Roslansky recently discussed the future of work, emphasizing the importance of education and coinciding with the launch of LinkedIn’s new Learning Hub.

Potential Integration with LinkedIn

LinkedIn has been expanding its education offerings and exploring ways to enhance video integration on its platform. TakeLessons could potentially bridge these goals, offering “live” online lessons that complement LinkedIn’s existing educational content.

This integration could create a synergistic offering, combining Microsoft’s educational infrastructure with LinkedIn’s professional network and learning resources.