Three million reasons to give a Hoot

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This article was published 19/10/2021 (1628 days ago), so information in it may no longer be current.

Winnipeg education technology company Hoot Reading has landed one of the first investments in a new venture capital fund from toy maker Spin Master.

Interest in Hoot Reading, which has developed an online tutoring platform whose mission is closing the gap in what’s been identified as a reading slump in the fourth grade, has grown significantly through the pandemic.

With school-age children home in various parts of North America at various times during the pandemic, parents have been forced to look for more tools to help with early childhood educational habits and Hoot Reading has caught on.

“We have had incredible traction during the pandemic,” said Maya Kotecha, co-founder and co-CEO of Hoot Reading. “It has been a tailwind for us.”

Kotecha and her co-founder and co-CEO Carly Shuler have leveraged that into a $3-million equity raise with Spin Master Ventures leading the round. (Earlier investors, Greg and Jeff Fettes, the owners of 24-7 Intouch, also re-invested.)

Spin Master is a Canadian entertainment and toy company that owns many brands including Gund, Meccano, Etch A Sketch and numerous digital and entertainment brands geared towards children.

Spin Master Ventures, which is officially launching today, will invest in “visionary entrepreneurs” and early-stage companies with cutting-edge concepts that will impact the children’s entertainment space.

“Spin Master is a really exciting match for us,” said Shuler. “We can tap into their experience in building their incredible portfolio of innovative toys, entertainment franchises and digital games as we diversify and expand our approach to teaching reading online.”

The new investment will help Hoot Reading catch up with the incredible growth it has experienced over the past 19 months when it has grown 10-fold at a pace of 30 per cent month over month.

It now boasts having delivered more than 100,000 lessons, tripling its previous total just since August and doubling the number of on-line teachers to 500.

The company has more than 2,000 books under licence from publishers and operates on a platform that Shuler had developed in a previous startup she ran called Kindoma, that was designed to connect young children online with loved ones to read and do activities.

That business model did not work but Shuler and Kotecha have found that there has been little resistance to the tutoring fees with Hoot Reading that start at $22 per lesson.

The company also plans to use some of the new investment to continue to show the effectiveness of the program. It already has research that shows that after 12 to 15 lessons with frequent and consistent practise, Hoot Reading can have a significant impact on a child’s reading skills and turn them into a proficient reader.

The additional investment funds will also help build out the company’s leadership team to manage its 24-person workforce that has doubled over the past year.

The growth has come almost exclusively through word of mouth.

“Parents love to talk which has been great for us,” said Kotecha. “Lots of parents look to their cohort to see what is working and what’s not. Word of mouth has been excellent for us. Teachers also talk.”

In addition to selling directly to parents, Hoot has also established a corporate marketing stream called Hoot for Companies, positioning the service as an employee benefit.

Accenture, the global professional services company, is its first partner in this program.

“It’s very exciting,” Kotecha said. “We have seen working parents who have really struggled during the pandemic, especially working women. Employers have been changing the way they are approaching working parents. They know if they can help parents at home that creates a balance in their lives and they show up at work even more productive.”

The company has also established a program, called Hoot for All, to make the service available to low-income families by soliciting corporate and foundation support working through The Boys and Girls Clubs of Canada.

It’s first sponsor in that program was Spin Master.

Fredric Gunnarson of Spin Master Ventures, said Spin Master will benefit from Hoot Reading’s knowledge of childhood education to help it build its digital games edutainment business.

“Online tutoring is one of the most rapidly growing sectors in education,” Gunnarson said. “Amid the growing cultural awareness and acceptance of virtual learning, or tutoring more specifically, Hoot Reading has experienced impressive traction and exponential growth.”

 

martin.cash@freepress.mb.ca