My Acquisition During a Global Pandemic: A Fifth Wave Success Story
By Lindy Ledohowski ● July 21, 2021 09:00
Lindy Ledohowski, CEO, EssayJack
On March 12, 2020 I was all set to head to downtown Toronto to meet up with the Canadian Film Centre Media Lab's jury panel to pitch my EdTech start up for acceptance into the CFC's Fifth Wave accelerator program, Canada's first feminist accelerator.
EssayJack Inc is the company I co-founded to bring the EssayJack academic writing software I invented to the market. At the time my co-founder and I developed it, we were die-hard academics devoted to developing software not to catch students when they made mistakes at the end of writing a draft, but to help them from the get go. We had experienced what we jokingly refer to as the "tyranny of the blank screen" and in 2015 set out to develop software that was pedagogically sound and actually helped students to write better.
By 2016 the British Council and Cambridge English's jury of academic experts named our software one of the world's best, and by 2017 we had launched a distribution partnership with Nelson in Canada to bring EssayJack to students and educators across Canada. By 2018 we had raised a Friends and Family round, and by 2019 I was the head of a legitimate EdTech start up with customers the world over.
We were set to launch our first institutional SEED raise in the first part of 2020, and joining the Fifth Wave was all part of that master plan. We were seeing user growth and revenue growth, and students were improving writing outcomes and reducing writing stress. We were on top of the world.
On that March 12, 2020, as I was getting ready to head down to meet the selection committee, the decision was made that the pitches would be done by Zoom. The rumblings about the novel coronavirus were getting more and more frightening as much of Italy and Spain were in full lockdown by then, and by the time I finished my afternoon pitch via Zoom, the World Health Organization had declared a pandemic.
Over the next weeks and months, we tried to engage our potential investors, but their message to us was "we need to ensure our current portfolio companies survive; we can't take on anything new." We tried to close institutional deals we had been working towards for months and then years, but the message we got was "we just have to figure out how to get devices in the hands of kids; come back later."
Then in July, our partner in Canada sold off their higher ed division and doubled down on their own proprietary software without EssayJack. But we had been accepted in to the Fifth Wave amidst all this uncertainty, and we offered EssayJack for free for students and educator until the fall of 2020. While I went through a gruelling process of figuring out how to support the business with limited revenues, but now unending possibilities as EdTech was growing, the Fifth Wave offered guidance, tactical support, and camaraderie.
We survived and started growing. Our free user base took off in 2020-2021, and with cutting expenses in 2020 by 15% over the previous year, and offering our platform for free for six months, in 2020, our revenues were still over 25% higher than in 2019.
By early 2021, we were ready to restart our SEED round, and our metrics were even better. Along the way, I met an impassioned EdTech CEO fresh off a successful investment round for a STEM offering. That CEO was Cyrus Moradian of Wize. The son of an immigrant father who came to Canada to make a better life, Cyrus spoke passionately about why he got into education as a great equalizer. He spoke about seeing friends' lives be adversely affected because they couldn't afford tutors to help them through those tough first year university courses, or family members whose academic struggles have left them under educated and lacking in confidence. We bonded over the idea that education is what can make people overcome the circumstances that can limit them, and technology-enabled education breaks down further barriers. I talked about international students being smart and full of potential, but not necessarily conversant in the expectations of writing in Canada and the US.
Cyrus asked if I would help make some English content for the Wize platform as they only had strong STEM offerings but knew that their growth would be dependent on being first-in-class with both math and literacy as core pillars. I delved into their software with my educator hat on, but also with my investment-minded hat, and I was impressed. Then as I was having investment discussions, a few of the potential investors started to talk about acquiring EssayJack, as M&A and consolidation in EdTech is becoming more and more common.
I told Cyrus about these acquisition conversations almost off-hand, and he said "if you're considering selling, talk to me first."
We went through a rigorous due diligence process where for 30 days, I signed away my right to entertain other acquisition or investment offers and at the end of it, I was so happy to see EssayJack find its home in the Wize family...along with me too! I joined as a VP in Wize, and brought my team along with me.
The details of the deal are confidential and will remain so, but I can say that I'm happy with how everything unfolded, and look forward to bringing STEM and ENGLISH solutions to high school, college, and university students this fall.
It's a different exit than I expected, and definitely I couldn't have envisioned this outcome at the start of the pandemic, but being able to ride through and survive and thrive is a story I'm happy to share.