MAY 8 2023
Published in The Australian Financial Review
Brisbane-based corporate training tech unicorn Go1 has closed the biggest deal in its history, to buy popular German book and podcast summary subscription service Blinkist, after bucking the tech market downturn and raising capital at an increased valuation over $3 billion.
The company has made a number of small acquisitions in the last year, but the Blinkist deal is by far the biggest, with a deal value thought to be around $100 million.
Blinkist has been a prominent name in the German tech start-up scene, becoming a well-known brand with tens of millions of users worldwide, for its subscription-based mobile app that summarises key ideas from professional books and podcasts.
Rather than read the latest business and professional books, Blinkist subscribers get CliffsNotes-style summaries. It has a vast and growing library available, and covers all non-fiction categories, such as parenting and self-help.
It has also raised about $US35 million in external funding from big-name US venture capital investors, including Insight Partners and Greycroft.
Go1 has raced to prominence in the Australian tech scene as an online marketplace for corporate training resources. It was founded in 2014 by four former school friends, Andrew Barnes, Vu Tran, Chris Eigeland and Chris Hood, and cracked the billion-dollar unicorn valuation in 2021.
Mr Barnes told The Australian Financial Review the sale process had been conducted slowly, and that he had been “trading notes” about the corporate learning market with Blinkist founders Holger Seim and Tobias Balling since 2019.
“We had shared a few calls over the years, and we started to think that maybe there was something there to pursue, so we agreed to meet up,” he said.
The respective teams decided to meet halfway between Australia and Germany, in Seattle, initially to discuss business collaboration ideas.
“Over drinks one evening we floated joining forces as a far-fetched idea, and when we saw there was interest, things progressed,” Mr Barnes said.
“That trip was then followed by many visits to Berlin and Australia.
“We have taken our time to make sure it is going to be the right fit, because none of the Go1 or Blinkist founders feel like they are done yet. We have a shared view that the world of lifelong learning and corporate education has such huge potential, and we have a goal of reaching a billion learners, which we take very literally.”
He described Blinkist as offering a great product adjacency for Go1, whereby it would be reaching Blinkist’s users on their smartphones and via CarPlay.
He said that, by combining Go1’s training and development content aggregation with Blinkist’s similar service for books, it would open a new model for consumption of any type of learning content from one provider.
Mr Barnes declined to disclose the financial size of the deal, citing confidentially clauses, but well-placed industry sources suggested a deal for a company of Blinkist’s size would be worth around $100 million.
To fund the deal Go1 has defied broader gloom in the VC funding market, closing an equity funding round featuring existing investors like AirTree Ventures, Salesforce Ventures, SoftBank and Madrona, while bringing Insight Partners and Greylock on to its cap table.
Though he declined to say the size of the funding round, due to its relationship with the deal size, Mr Barnes said it had been done at a higher valuation to the $US2 billion ($2.8 billion) it achieved in a $US100 million round in mid-2022.
Following its latest equity funding, Go1 is valued at roughly $3.5 billion ($US2.4 billion.) It will bring all of Blinkist’s 160 staff, taking Go1’s size to almost 800.
The acquisition deal was done in a combination of cash and scrip, with Hogan Lovells serving as legal counsel to Go1 for the acquisition, Orrick Herrington & Sutcliffe serving as legal counsel for the equity financing, and Ernst & Young as financial and tax adviser.
Go1 previously acquired Paris-based Coorpacademy last year, which had about 55 employees and provided a similar service to Go1 in French, and it has also made a couple of other much smaller acquisitions.
The Blinkist brand will be retained post-acquisition, with Go1 customers gaining access to its content.
“Blinkist already had a growing business-to-business operation, and we’ll be able to sort of turbocharge that,” Mr Barnes said.
“The two co-founders of Blinkist are coming on board, and will be key leaders in the ongoing business. Having strong executives based in Germany will help us from a time-zone perspective.”
He said Go1’s international expansion plans had been progressing successfully, with about a third of its customers and revenue in the United States. A third comes from Asia Pacific, and the other third from Europe, the Middle East and Africa.
Good sign for Aussie tech
AirTree Ventures co-founder and partner Craig Blair said the deal made a lot of sense for Go1, as it offered it the chance to expand its educational content offerings, and tap into personal users as well as its existing corporate market.
He said it also represented a maturation of the Australian technology scene, for one of the local operators to be buying a company of Blinkist’s stature.
“It’s another step in the coming-of-age story for Australia’s tech ecosystem when a Brissie-based start-up acquires a well-known global app,” Mr Blair said.
“This bucks the trend of big tech players acquiring our homegrown success stories – we’re now the ones taking the lead on the global stage.”
Insight Partners managing director Thilo Semmelbauer said he had been impressed by the acquisition by Go1, and that it was rolling its stake in Blinkist into the new combined entity as a result. Other US-based Blinkist backers Greycroft and Headline, and German investors IBB Ventures and MGO Digital Ventures are also now Go1 investors.
“We’re thrilled with Go1’s acquisition of Blinkist,” Mr Semmelbauer said.
“Blinkist’s mobile content and product will expand the learning opportunities already available to Go1’s customers and create a powerful pair with Go1’s corporate learning offering.”