Flat World Knowledge, the largest publisher of free and open
college textbooks for students worldwide, today announced it has
secured $15 million in Series B funding led by Bertelsmann Digital
Media Investments (BDMI), a wholly owned subsidiary of Bertelsmann
AG, a leading international media company, and Bessemer Venture
Partners, a top global investment firm. Also joining the round are
returning investors Valhalla Partners, GSA Venture Partners
(formerly Greenhill SAVP), High Peaks Venture Partners, and several
angel investors.
"Flat World Knowledge has the potential to significantly
transform the $8 billion college textbook publishing industry,"
said Keith Titan, a principal at BDMI, who will be joining the
company's board. "Among the players in this space, Flat World is
uniquely positioned to fully capitalize on the Internet with an
open textbook model that dramatically lowers costs for students and
provides professors with greater control over the content, which is
written by top academic authors. Flat World represents a compelling
and innovative model for the future of publishing in higher
education."
Flat World is a commercial pioneer within the growing open
content movement to make educational materials freely available
online and accessible to everyone. Under its open textbook model,
students can read peer-reviewed textbooks in their entirety online
for free or purchase print and digital versions. The company
generates revenue through the sale of print books, e-books for
devices like the iPad and Kindle, audio books, PDF downloads and
interactive study aids.
"This company is laser-focused on the fastest-growing sector of
the higher education market -- community and state colleges --
where the financial pain of overpriced textbooks is greatest," said
Christopher Gabrieli, a partner at Bessemer Venture Partners, who
will also join the company's board. "Expanding economic and
educational opportunities for students has never been more
important. Flat World has stepped up to the challenge with
expertise, creativity, and a bold approach that removes a major
barrier to student success."
With students spending an average of $1,137 in 2010-11 for
textbooks and supplies, according to The College Board, professors,
administrators and policy-makers are looking to educational
entrepreneurs like Flat World Knowledge for innovative ways to
solve the textbook affordability crisis.
"We're bringing textbook publishing into the 21st century," said
Jeff Shelstad, Flat World Knowledge CEO and co-founder. "With our
new partners, we are accelerating our growth to meet the tremendous
demand for world-class educational content that's free of the
constraints of conventional textbooks."
To date, more than 1,600 professors at over 900 colleges have
adopted Flat World texts, ranging from Cornell University to
Columbus State Community College to California State University.
Demand is also growing internationally. Students in 44 countries,
including India, the United Kingdom, Australia and China are among
the 100,000 who will use Flat World Knowledge books this 2010-11
academic year.
The new funding will help the rapid expansion of Flat World's
catalog beyond business and economics to include books for the 125
highest-enrolled courses on college campuses. The company recently
published titles for three of the largest general education
courses: introductory sociology, introductory psychology and
college success, which have a combined enrollment of more than four
million students annually. Over the next few months, the company
will also publish new textbooks for English composition, algebra,
chemistry and American government, among others.
Open Model Redefines the Textbook In
contrast to traditional publishing's "all rights reserved"
copyright license, Flat World publishes under a Creative Commons
open license, which eliminates many of the restrictions for how a
textbook can be used and distributed. Students can read open
textbooks online for free for as long as they like. Professors can
reorder and edit content, and add new material and interactive
media. Armed with an open license and Flat World's sophisticated
online editing platform, faculty are free to create the "perfect
book" for their course.
For authors, the open publishing model represents greater income
potential in the long-term, since new unit sales aren't
cannibalized by used books, textbook rentals, gray market editions
and online piracy sites. More than 100 top academic authors have
signed with Flat World, such as Steve Barkan, professor and chair
of the department of sociology at the University of Maine, and
author of five market-leading textbooks.
"A major reason I decided to write an open textbook is that
increasingly my students couldn't afford to buy their books," said
Barkan, who recently published Sociology: Understanding and
Changing the Social World with Flat World. "From an author's
perspective, there's an incredibly high-quality review and
development process that's been a real plus. And I stand to be
well-compensated. It's win-win for everybody."
Textbook Licensing Addresses Cost at the
Institutional Level As enrollments continue to soar and
education budgets shrink, colleges are seeking new and more
aggressive ways to lower student costs and improve completion
rates. Flat World recently launched an institutional textbook
licensing model to help colleges achieve these goals. The company
has several agreements in place, including one with Virginia State
University, which embraced this licensing model as a way to reverse
its high drop-out rate among business school students, most of whom
are on financial aid and can't afford to buy expensive textbooks
that can cost as much as $200 each.
Akin to the way colleges purchase software licenses,
institutions buy per-student, per-course seat licenses for digital
access to textbooks, and charge students a small fee as part of
tuition. Unlike other licensing models, Flat World gives students
unlimited access to the digital files, along with print options,
and the ability to transfer the content from device to device.
"Our students have always had the ability and intellect," said
Dr. Mirta Martin, dean of VSU's Reginald F. Lewis School of
Business. "Now with open textbooks, they finally have the
resources."
About Flat World Knowledge Flat World
Knowledge is the largest publisher of free and open college
textbooks for students worldwide. Committed to making higher
education more affordable and accessible, the company provides
students with free online access to complete, peer-reviewed
textbooks, with options to purchase affordable print and digital
formats, including e-books, audio books, PDF downloads and
interactive study aids. Flat World's open license and online
editing platform enable professors to modify the content and create
the "perfect book" for their course. To date, more than 1600
professors at over 900 colleges in 44 countries have used Flat
World open textbooks. Backed by top venture capital firms, Flat
World Knowledge was named one of the information industry's "30 to
Watch" in 2011 by Outsell, Inc. To learn more, visit
www.flatworldknowledge.com; follow us on Facebook at
http://www.facebook.com/flatworldknowledge and on Twitter at
http://twitter.com/flat_world.
About Bertelsmann Digital Media Investments
(BDMI) Bertelsmann Digital Media Investments (BDMI) is a
strategic venture investor focused on innovative digital media
technologies, products and distribution channels across the globe.
BDMI is a wholly owned subsidiary of Bertelsmann AG, a leading
international media company with over $22 billion in revenues and
over 100,000 employees across more than 50 countries. For more
information, visit: www.bdmifund.com.
Bertelsmann AG is an international media company encompassing
television (RTL Group), book publishing (Random House), magazine
publishing (Gruner + Jahr), media services (Arvato), and media
clubs (Direct Group) in more than 50 countries. Bertelsmann's claim
is to inspire people around the world with first-class media and
communications offerings -- entertainment, information and services
-- and occupy leading positions in its respective markets. The
foundation of Bertelsmann's success is a corporate culture based on
partnership, entrepreneurial spirit, creativity, and corporate
responsibility. The company strives to bring creative new ideas to
market and create value. For more information, visit:
www.bertelsmann.com.
About Bessemer Venture Partners Bessemer
Venture Partners is a global investment group with offices in
Silicon Valley, Cambridge, Mass., New York, Mumbai and Herzliya,
Israel. One of the oldest venture-capital practices in the United
States, Bessemer has partnered as an active, hands-on investor in
Ciena, LinkedIn, Postini, Shriram EPC, Skype, Staples, VeriSign and
Yelp. More than 100 Bessemer-funded companies have gone public on
exchanges in the U.S., the U.K., India and Canada. To learn more,
visit www.bvp.com; follow the firm on Facebook at
www.facebook.com/bessemervp and on Twitter at
http://twitter.com/bessemervp.
About Valhalla Partners Valhalla Partners
is a trusted partner and advisor to technology entrepreneurs in
their quest to build world-class companies. Based in Vienna,
Virginia, the firm's management team has made more than 120
investments over the past twenty years and produced almost $1
billion of investment proceeds. Valhalla prefers investments where
the mission of the company is to innovate, challenge and
fundamentally change the dynamics of new and existing markets.
Investments by Valhalla's team include Advertising.com,
CareerBuilder.com, JumpTap, LeftHand Networks, Progress Software,
RealOps, Register.com, Riverbed Technologies, SafeNet, SEPATON,
ServiceBench, Trilogy, and webMethods. Valhalla Partners brings the
full power and network of its experienced team to every investment
it makes, helping companies grow faster and smarter regardless of
size or maturity. For more information, go to
http://www.valhallapartners.com.
About GSA Venture Partners With over $100
million under management, GSA Venture Partners makes early stage
venture investments in technology-enabled services and business
information services companies. Prior fund manager investments
include Medidata Solutions (NASDAQ: MDSO), LivePerson (NASDAQ:
LPSN), OpenWave (NASDAQ: OPWV), YellowJacket (acquired by the
Intercontinental Exchange) (NYSE: ICE), UGO Networks (acquired by
Hearst Corporation), and KnowledgeStorm (acquired by TechTarget)
(NASDAQ: TTGT). For more information about GSA Venture Partners,
please visit www.gsavp.com.
About High Peaks Venture Partners High
Peaks Venture Partners is a venture capital firm focused on
investments in market leading, seed and early stage technology
companies. Founded in 2004, High Peaks began investing its second
fund in 2010. With offices in New York City and Upstate New York,
the firm focuses on investments in the web services, digital media,
software, and medical technology markets. High Peaks is one of 18
affiliates of Village Ventures, a collaborative, nationwide network
of seed and early-stage venture capital funds. For more
information, please visit http://www.hpvp.com.
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Media Contact: Carole Walters Flat World Knowledge
973-413-0625 Email Contact
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