Leading one education company is stressful enough for most people. But try doing four—simultaneously. That’s the challenge that John Katzman, one of the most recognized names in the business, has embarked on with The Noodle Companies.
For over three decades Katzman has helped build popular brands including The Princeton Review and 2U. That sort of track record can earn goodwill, reputation and capital from investors. Today, the Noodle Companies, a conglomerate of four subsidiaries serving the K-12 and postsecondary education markets, announced it has raised $5 million in a Series A round from SWaN & Legend Venture Partners.
The vast scope of these operations makes Noodle perhaps the most audacious venture for Katzman. The oldest of the Noodle Companies, Noodle.com, founded in 2010, is a search directory for local schools, classes, counselors and educational services. Five years later, Noodle Markets, which helps K-12 districts tools manage the procurement process, and Noodle Partners, which aims to help universities build online programs, joined the family. The latest addition is Noodle Pros, an online directory of local tutors that launched last June.
At the head of the table sits Katzman. The “unifying thesis,” he says, is to serve an “education marketplace that is inefficient and opaque.” Each of the four Noodle companies aims to connect human and technology services with schools and learners—in very different markets—in simpler, cost-effective ways. Creating separate teams and management structures is his acknowledgment that “this is not a monolithic problem, and there is no monolithic solution.”
As founder and CEO of The Noodle Companies, he’ll decide how to allocate the funds. “I’ve always been really excited about bringing money at the top level and figuring out the synergies between the companies,” he tells EdSurge. “The money is mostly backup” as one company or another needs it, he adds.
Two of the four Noodles, Markets and Partners, have already raised their own seed rounds— $4 million and $3 million, respectively. Pros is currently sustainable, according to Katzman, who claims it’s seen a 60 percent revenue growth since its launch. Combined, the Noodle companies have raised more than $40 million in venture funding.
That leaves the focus on Noodle.com, which slashed its editorial and marketing staff last year to refine the product and user interface, Katzman told EdSurge last March. That team has since righted the ship, he adds, and will be launching Android and iPhone apps for college admissions in the next few weeks. “It could be that the spending goes up again as we come out of gates,” he teases.
Katzman currently spends the majority of his time with Noodle Partners, which aims to serve as a middleman that contracts specific services that schools need to build online programs. Schools should pay no more than 30 percent of their revenue from student tuition to create these offerings, he believes. (By contrast, a report on the OPM industry found that schools pay as much as 60 percent.) Pepperdine University’s business and management school is a client, but Katzman says programs from four additional schools will be announced.
Noodle Partners is also adding several executives with ties to 2U, another OPM provider that Katzman helped start in 2008—and may now be competing with. (He left 2U in 2013.) Melora Sundt will join as Chief Academic Officer, having previously designed online courses for University of Southern California’s Rossier School of Education. Dan Bursch, former director of an online MBA program from University of North Carolina, will now serve as Director of University Relations. Both universities are 2U clients. To top it off, Julian Farmer, formerly 2U’s VP of Sales and Admissions, will also join Katzman’s team as Director of University Partnerships.
Among investors, Katzman has built plenty of social capital through his reputation for not only starting companies, but navigating them to attractive exits. 2U is now public; Tutor.com and The Princeton Review have been acquired by internet conglomerate IAC. “To take one idea from execution into an institution...that’s hard enough,” says Fred Schaufeld, Managing Director of SWaN, in an interview with EdSurge. “To do it more than once takes a luminary.”
This track record appears to bode well for Noodle’s investors. “It’s less likely that Noodle Companies itself ends up public, and more like than any one of these companies can scale to that level,” says Katzman.
