A SoftBank-backed education start-up could be Europe’s first major tech IPO in 2021

Brothers learning at home

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LONDON — Online education company Kahoot is “on track” to list on the main Norwegian stock market by the end of March, its CEO told CNBC, after a pandemic-driven boom in digital learning helped the firm post strong growth in 2020.

Kahoot, which is based in Oslo, is a game-based online learning service that lets players create and engage in multiple-choice quizzes. Founded in 2012, the company has over 24 million active users and is backed by the likes of SoftBank, Microsoft and Disney. It makes money from paid subscriptions.

The firm is listed on Oslo’s Euronext Growth market, a route for smaller Norwegian companies seeking a broader initial public offering. Its shares have risen more than 400% year-over-year on the back of rising demand for remote learning linked with coronavirus restrictions.

“We are transitioning to the main listing on the stock exchange at the end of this quarter, that’s the plan,” Kahoot CEO Eilert Hanoa told CNBC in an interview Tuesday. He added that Kahoot hopes to reach a larger audience of investors with a full IPO.

Kahoot racked up revenues of $45.2 million in 2020, up 247% from the $13 million it reported the previous year. Kahoot said it expects fourth-quarter profit to come in at $1 million, excluding stock-based compensation, related payroll taxes and acquisition costs. The firm is forecasting 2021 revenues of between $90 million and $100 million.

With a market value of around $5.7 billion, Kahoot is one of Europe’s most valuable educational technology, or edtech, companies. It competes with Canada’s SMARTeacher Inc, which publishes the popular online math game Prodigy.

Kahoot could be one of the first major European tech unicorns to go public this year if it hits its goal of listing on the Oslo Stock Exchange in the first quarter. 2020 marked a quieter year for Europe’s tech IPO market, with big U.S. listings from the likes of Airbnb, Palantir and DoorDash stealing the limelight.

Other large European tech start-ups investors expect to go public this year include food delivery app Deliveroo, money transfer service TransferWise and cybersecurity firm Darktrace. But there is currently no clear timeframe for when these firms will list.

SoftBank plowed $215 million into Kahoot in October for a 9.7% stake, in a big vote of confidence for the business. The Japanese tech investment juggernaut later expanded its holdings to around 13.5%, according to the latest available filing. Kahoot is also backed by venture capital firms Creandum and Northzone.

Kahoot’s IPO preparations come at a time when remote learning demand is again creeping up as countries in Europe tighten their Covid-19 restrictions. Britain and Germany both recently imposed fresh lockdowns aimed at stemming the rapid rise of infections.

“Digitalization will not stop whether we have coronavirus slightly impacting society or highly impacting society,” Hanoa told CNBC.

“On the contrary, the consistency will be in any educational society to use the same digital tools whether we are meeting at school or auditorium, or studying at home as individuals or live on a video conference.”

In November, Kahoot acquired language-learning app Drops in a bid to expand its range of content. Asked whether the company could use cash raised from an IPO to make more acquisitions, Hanoa said the company was already well capitalized with $256 million in cash and cash equivalents, but would “will keep the door open” to “additional opportunities” in the future.

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