Rafter Acquires HubEdu, Hints at Future Edu-Tech M&A Activity

Startup Rafter, which recently spun out of BookRenter.com to address the education infrastructure and supply market, today announced that it has acquired San Diego-based startup HubEdu, in a deal the terms of which were not disclosed. For Rafter, the purchase was a means to bring on additional talent in the area of college course materials purchasing, and add to the range of services it can provide its educational institution partners.

“They bring products that are more advanced than the same offerings on our platform, but also it brings a team that’s very focused on solving three basic areas of interest for educational institutions,” Rafter CEO Mehdi Maghsoodnia said in an interview. Those include: Adoption, providing professors with a view of what’s available and what has been used across the U.S. in terms of relevant course materials; better supply pricing, so that once you settle on a type of content, how do you find the best prices for students; and analytics and reporting, in terms of learning relative comparable costs, strengths and adoption rates of texts and courseware in the U.S.

Rafter, which wants to provide a full-scale, comprehensive solution for course materials management to educational institutions, has an uphill battle ahead of it, in terms of convincing institutions to come on board and hand over the management of a source of significant revenue opportunity to a third party. The company has good traction so far, however, leveraging its relationships with institutions from BookRenter to help it partner with hundreds of schools since its debut. And it plans to continue increasing its value proposition to partners via additional acquisitions just like this one, Maghsoodnia told BetaKit, something which he sees as exciting for the space in general.

“Most software companies focusing in the educational market have not had the ability to exit, other than to sell themselves to massive legacy publishers, or to players like Blackboard,” he said. “It’s exciting for software companies to be able to join another company that’s modern, in the cloud and able to educate institutions about the kind of data we provide.”

Future acquisitions will likely be similar in terms of their targets to this HubEdu purchase, Maghsoodnia said, with the ultimate goal of fulfilling the needs of Rafter’s school partners, as they arise and are identified. “We can’t really respond to every need that comes up, but we’re being very strategic about the immediate pain points that these institutions need to solve, and in that sense we’re looking at technology companies out there that are showing their ability to service these institutions,” he said.

For Rafter, the key to success will be demonstrating clear value to institutions and their students, but also avoiding the ire of existing major players in the publishing industry. Recently, startup Boundless Learning caught the business end of publishers’ wrath via a lawsuit against their open approach to course materials. But Rafter is looking to play nice with publishers, not circumvent them. Still, if bigger players see value in doing something similar themselves, Rafter could encounter significant competition from Blackboard and others, but that’s exactly why this M&A strategy is a good early strategy toward growth.

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