A love story: Lynda gets a $103 million investment from Spectrum and Accel
We’ve been writing for a while about just how easy it has become to get a seed round in the Valley and just how brutal it is to get a series A.
Believe it or not, not every company cares, because not every company wants one.
Today Lynda.com announced its first outside funding in 17 years as a company. 17 years! In tech years, that is an eternity. The large $103 million round -- which took four years of wooing to close -- comes from Accel Partners and Spectrum Equity.
As with many Accel portfolio companies – besides Facebook and Groupon – Lynda might fall into the category of “companies kicking ass that I don’t know about.” Founded in 1995 and based outside of Santa Barbara, in Carpinteria, CA, the company creates educational videos in the realms of software, business, technology and creative skills. Subscribers pay $25 a month, and get access to all of the content. So, a user might watch a video segment teaching Photoshop one day, then another one teaching Excel PivotTables the next.
The company has individual, academic and corporate customers, some of which are pretty high powered: Disney, Apple, Wal Mart, Qualcomm, and seven of the eight Ivy Leagues (Brown, I’m looking at you). And in 2012, the company’s revenue exceeded $100 million.
With that kind of runway you can play hard to get for years. Which is exactly what Lynda has done. Accel and Spectrum both courted Lynda (the company) for four years.
This is a pattern for Accel. For those unaware, let’s run down the list of shameless/awesome things Accel has done in the past to win the heart of a company that doesn't want venture capital: made up fake identities to get customer opinion at a conference, posed as retailers to get the inside track, stayed up drinking in Canada all night, almost jumped into a swimming pool fully clothed when the company finally agreed. And this was all for one company.
With Lynda, Accel took less of a bad boy approach and played the sensitive guy role. When the firm first called, Lynda, self sufficient and thriving, was completely uninterested. The company was already the apple of every large VC firms’ eye, and had been in day-to-day contact with 10 of the major ones. Lynda was flattered that a global firm like Accel that would show interest, so the company took the call, but CEO Eric Robison says the company wasn’t ready to take any kind of investment.
Years ensued. “In both cases, it was a long period of time, long conversations,” says Robison. “It was really just getting to know the firms.”
For this wooing, there were no grand gestures. “Sometimes it takes six months, sometimes a year, sometimes four years,” Accel partner Andrew Braccia says. “Sometimes it works out. Other times it doesn’t.” He wouldn’t comment on the ones that didn’t.
Lynda finally decided to take the capital around last summer, after the company had pulled off the $100 million revenue year and was bringing on members for its senior team. The company wanted to develop more of an international presence and explore new content areas.
So what makes a company that doesn't need money say yes? Timing, circumstance and chemistry. Cheesily enough, just like in dating.
[Image courtesy: cuorhome]