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International Internet Magazine. Baltic States news & analytics Saturday, 23.10.2021, 21:12

Kahoot buying start-up founded in Estonia for up to USD 50 mln

BC, Tallinn, 25.11.2020.Print version
The Norway-based global developer of learning platforms Kahoot on Wednesday announced the acquisition of Drops, a start-up founded in Estonia that is one of the fastest growing language platforms in the world, informs LETA/BNS.

The value of the transaction is up to 50 million US dollars, Postimees reported.

Kahoot is acquiring 100% of the shares in Drops for a total consideration reflecting an enterprise value of 31 million dollars on a cash and debt-free basis, in addition to a performance-based element of up to 19 million dollars depending on Drops' performance in 2020-2022.

The consideration will be settled in a combination of cash and Kahoot shares. Completion of the transaction is subject to customary conditions and the transaction is expected to be completed in November 2020. 

Drops has over 25 million users globally. The company's core owners are Hungarians Daniel Farkas and Mark Aron Szulyovszky, who together own 91 percent of the platform's developer  OU PlanB Labs.

The Estonian business accelerator GameFounders that used to help Drops in its early years holds a 5 percent stake in the company.

Drops posted sales of approximately 6.3 million euros for 2019. The company's 21 employees are based in Estonia, the United States, the UK, Spain, Italy, France, Germany, Sweden, the Netherlands, Hungary, Ukraine and Russia.

PlanB Labs was established in Estonia by Hungarian founders, who arrived in Estonia in 2012.

In February 2019, when Drops was named Google Play's best app of 2018, GameFounders founding member Kadri Ugand told BNS that the company faced some setbacks at first and its initial application failed.

"It did not go the way they had hoped, the original team fell apart. But the founder, Daniel Farkas, really believed in it, kept working on it and sustaining it until he finally succeeded," Ugand said.

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