Perth software company Moodle, which has quietly grown to have more than 100 million registered users around the world, has accepted its first outside investment after rejecting multiple approaches from venture capital funds.
Perth software company Moodle, which has quietly grown to have more than 100 million registered users around the world, has accepted its first outside investment after rejecting multiple approaches from venture capital funds.
Moodle will be the first investment by Education For The Many, an entity set up this year by the French-based Leclercq family, which is behind the Decathlon sporting clothes brand.
Founder and chief executive Martin Dougiamas said he was incredibly happy to close the deal because he had finally found an investor who shared his values, and did not look at Moodle just in monetary terms.
“I get approached by a lot of investors, all the time,” he told Business News.
“And usually they are in it for the wrong reasons from my point of view.”
Mr Dougiamas said EFTM brought a different mindset to the investment.
“They will be a good partner as well as an investor,” he said.
“They are not the kind of investors that are focused on particular profit targets.
“I want it to be very clear they are not venture capitalists; I’ve probably rejected 50 VCs that we talked to over the past year or two.”
EFTM will acquire a minority shareholding in Moodle in return for its $6 million investment but the precise amount has not been finalised.
“That’s subject to a valuation in a couple of years, there is a formula that is tied to revenue and not profits,” he said.
“They’re talking about being around for decades, they operate on a long time scale.”
Mr Dougiamas said the capital injection was limited to an amount that was useful.
“You hear about a lot of larger amounts but I was trying to keep it down to what we can actually use,” he said.
The $6 million will be used to accelerate the development and roll-out of Moodle’s open source (freely available) learning management system, which is used primarily in universities and businesses across the globe.
Mr Dougiamas said Moodle plans to hire a lot more people, particularly in its Barcelona office, to support the product rollout in Europe.
Moodle currently has about 35 staff, with about two thirds in Perth.
They support about 200 software developers across the Moodle community and 70 accredited partners who support product implementation.
Mr Dougiamas said a major initiative this year would be the launch of Moodlenet, a social media platform for educators.
“It’s going to be a really big step for us,” Mr Dougiamis said.
“It will connect all Moodle sites around the world.”
He emphasised the site would be focused on professional development.
“It’s for people to talk about education and their jobs.
“It will be an ethical, open and transparent platform.”
Mr Dougiamas said the $6 million investment was an extension of the philosophy the Leclerq family applied to the Decathlon business.
“They have a very interesting mindset,” he said
“They have put caps on the amount of profit they can make.
“Their vision and mission and strategy is all about minimising costs in ethical and environmental ways and passing that on to consumers.”
Mr Dougiamas said he was aiming to build Moodle in a similar way to Decathlon, which has a large number of employee shareholders and a very flat structure.
“They have 80,000 people and only have four levels of management,” he said.
“The whole style is very anti-management; they don’t have managers as such, they have a big focus on coaching and training.
“They empower even the lowest employee to make big decisions”
Mr Dougiamas said he had spoken to lots of local advisers as Moodle has expanded, and they all wanted to add more managers, with a steeper management structure and more controls.
“It didn’t feel right,” he said, adding Moodle aspired to match what Decathlon had achieved.
“I saw what they are doing on a large scale and it works.
“It’s a fun place to work and people feel very satisfied there.
“I loved it when I saw it.
“They are building a company that is like a community but still gets things done.”
Julien Leclercq, president of the Leclercq family structure, said he supported education as it was the number one solution to help society manage technological upheavals in the coming decades.
“Our family of responsible investors decided a few months ago to help entrepreneurs who are passionate about education,” Mr Leclerq said in a statement.
“Martin Dougiamas is one of the world’s most talented entrepreneurs in the education field.
“We chose to participate in the Moodle adventure to allow Martin to accelerate the expansion of Moodle in the world.
“We are thrilled to now be active in the Moodle community, a community with a purpose.”
