D.C.’s Class Technologies Inc. has acquired a West Coast cloud security and software company to help it break into the federal e-learning sector — what it hopes could be a lucrative, albeit competitive, new market for the local ed-tech company.
Class, founded by serial entrepreneur Michael Chasen, has purchased Oakland, California-based CoSo Cloud LLC for undisclosed terms, in a bid to integrate it to its own Zoom-based platform. Launched during the pandemic, Class' online learning services cater primarily to K-12 and higher education.
By beefing up its security tech, Class hopes to be a more viable option as an e-learning platform of choice for the federal government, which is enacting stricter cybersecurity requirements for its vendors through the Department of Defense's updated Cybersecurity Maturity Model Certification (CMMC). With CoSo, Class also gets a technology and platform that's compliant with the government's FedRAMP security requirements for cloud services.
“We thought this was an opportunity to not only bring technology around FedRAMP certification in-house for our Class product, but also to expand the technologies that we supported,” Chasen, Class' CEO, said in an interview
CoSo, which has an office in D.C., already has a roster of federal clients using its e-learning, conferencing and training services, such as Adobe Connect. That list includes the Internal Revenue Service, DOD, General Services Administration and the Department of Homeland Security's Federal Law Enforcement Training Centers — as well as corporate customers like Wells Fargo — though Class will still have to contend with a relatively crowded field of competitors, including Coursera Inc. and Anthology Inc.
Class discovered CoSo Cloud while partnering with the company to make sure its own e-learning software was FedRAMP-certified, Chasen said. Its own products allow instructors to proctor live tests, have one-on-one conversations, take attendance, distribute assignments and other virtual tasks.
The deal, which makes CoSo Cloud a subsidiary of Class, adds 50 employees to the local company, bringing its total to more than 200 people. CoSo CEO Glen Vondrick will serve as general manager for the subsidiary.
Both companies are fully remote, a status Chasen said he has no plans to change nor embark on a hiring spree at the moment. He declined to disclose Class' revenue, but said this could open up a new stream.
“[Online learning] has been a growing field ever since Covid, so we’re just trying to respond to the market,” Chasen said. “Now to add the expertise CoSo Cloud built up in the federal market, it really gives us a better opportunity to serve these clients and expand in greater capacity in this area.”
This makes for the second acquisition for Class in as many years, following its purchase last year of Blackboard Collaborate from Chasen’s own former company, Blackboard, which is now a subsidiary of Anthology. The parties didn't disclose terms of that deal at the time, but TechCrunch had reported that the price neared $210 million, citing an investor involved in the deal.
At Blackboard, Chasen had co-founded that ed-tech company in D.C. in 1997 and took it public through a $51 million in initial public offering and, eventually, selling it as an industry behemoth to private equity group Providence Equity Partners for $1.7 billion in 2011. Chasen left that company in 2012 and started up or led other ventures, with varying success, before launching Class, which he hopes to take on a similar trajectory as Blackboard.
Thus far, Class has raised more than $160 million in venture funding since it was founded in September 2020, capped by a $105 million raise in July 2021. That had followed a series of other raises for the company.
