Riverdeep, the Irish educational software company, has completed a £2 million equity investment round. The firm said the move gives Riverdeep a valuation of £25 million and propels it closer to a stock market flotation.
The company designs interactive, multimedia software for secondary school pupils. At the moment, all of its products are based on high school curriculums in the United States. Founded in January 1996, the company now has a Dublin staff of 60, with a further 20-strong sales team in Dallas, Texas.
The company said Davy Stockbrokers arranged £2 million of equity funding as part of a £4 million equity equity and loan package for its ongoing development. Mr Pat McDonagh - who cofounded the company after successfully building CBT into a major player in the world of educational software - remains the major shareholder with around three quarters of the equity.
The company's head of curriculum development, Ms Patricia Burke, said the move had brought the company closer to a stock market flotation
"We now have a valuation and it is based on something real," she said. "I think what's happening in the US has brought us an awful lot closer, the fact that we're hiring much more people and the US operation has got up and running at such a speed - I think everything is happening a lot quicker than we all anticipated."
Howeever, while industry observers said Riverdeep may seek a listing on the New York Nasdaq exchange within a year, and possibly also in Dublin, Ms Burke would not speculate on a timetable for the move.
She said a major breakthrough in the United States had come from the endorsement of its products by the US Institute for the Academic Advancement of Youth. The group, based at the Baltimore, Maryland, campus of John Hopkins University, runs programmes for exceptionally gifted students.
"They have started a distance learning component where they identify companies like us that have very good software and they mail it out to the top three per cent of students. So for every quarter, they would receive a CD of maths instruction or science instruction. The child would learn from it, and then use the Internet for feedback," Ms Burke added.
A mail-shot to 84,000 gifted students for Riverdeep software has already been dispatched. "It is a fabulous mark for us, very prestigious," she said. "That's a really big partnership for us."
Ms Burke, along with cofounder Mr Edward Wallace, will relocate to the company's Dallas offices.
The company has targeted the US secondary school market because it is expected to grow rapidly over the next decade. Some analysts say expenditure on Information Technology by public schools in the US will increase by 62 per cent even before the end of the century. This would see the estimated 1998 figure of $505 million rise to over $800 million by 2000.
With recent reports highlighting that US students have a low level of attainment in maths and science compared to the international average, the company believes it is ideally placed to expand rapidly.
Riverdeep said it now has the backbone of its sales team in place, with representatives in North and South Carolina, Texas, Florida, Georgia, Maryland, the District of Columbia and both northern and southern California.
