Beats | April 27, 2017

TPG’s Rise Fund comes out of the gates with a big edtech investment in EverFi

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One of the big questions around the Rise Fund, the new impact investing fund from private equity firm TPG Growth, has been where the fund will put the $2 billion it has said it is raising.

The firm provided a partial answer today with its first investment, leading a $190 million financing of EverFi, an educational technology startup in Washington D.C.

TPG Rise committed $120 million, with another $30 million coming from TPG Growth itself, in one of the largest edtech deals to date.

“Education technology is a growing sector that presents a compelling opportunity to create meaningful positive outcomes,” Bill McGlashan, founder and managing partner of TPG Growth and CEO of the Rise Fund, said in a statement. “We are confident that EverFi is working to change the future of education.”

The arrival of TPG Rise has been seen as a signal of increased mainstream investor interest in impact investing. The firm is targeting education, energy, food and agriculture, financial services, healthcare, information and communication technology, and industrials and infrastructure, where it says it can deliver “complete returns” and measureable impact. Among the founders are U2 lead singer Bono and Jeff Skoll, the billionaire former president of eBay.

The EverFi investment, and all of TPG’s deals, will come under special scrutiny after Bono ruffled feathers with his repeated criticism that impact investing to date has been an excuse “for good people to do bad deals.” TPG counts more than a dozen mission-driven billionaires among its own investors, including Pierre Omidyar, Reid Hoffman, Laurene Powell Jobs, Richard Branson and Lynne Benioff (see, “Billionaire’s Ball”).

Education opportunity

EverFi also has support from some name-brand backers, including Amazon’s Jeff Bezos and Google’s Eric Schmidt and Medium’s Evan Williams. The company’s software, which it sells as a subscription to K-12 schools, universities, corporations, sports teams, and NGOs, and which now reaches 16 million learners, teaches sexual assault and harassment prevention, social and emotional learning, and science technology engineering and math (STEM) and career readiness.

EverFi will use the funds for international expansion and acquisitions. Chicago-based Mainstreet Advisors joined the round, as did existing investors Advance Publications, Rethink Impact, Allen & Co. Last year, EverFi raised a $40 million Series C round. One person close to the deal told Fortune magazine that EverFi’s valuation has not yet hit $1 billion, the threshold to be called a startup “unicorn.”

One question Everfi will face: Can for-profit education technology companies serve the students that need it most? Tom Davidson, the firm’s CEO and former state legislator from Maine, said the new financing is a bet on the company’s “ability to bring true education impact to all learners, regardless of zip code.”

The Rise Fund also said former U.S. Secretary of Education Arne Duncan and Rick Levin, CEO of Coursera, will serve as advisors to its education team. John Rogers, a founding partner of Bridges Ventures’ U.S. Sustainable Growth Fund, will lead the team.

“Improving education involves finding ways to make curricula more accessible, as well as developing new courses that address today’s social challenges,” said Duncan. “EverFi is benefiting students, teachers, and school staff, making it a natural fit for The Rise Fund.”