The Edison Project has received an infusion of $30.5 million in new capital that company founder Christopher Whittle said will stake expansion for the near future.
In its second year in operation, the New York City-based school-management company is running 12 elementary and middle schools in six states.
The company has received new capital from four investment firms and four individuals, including Mr. Whittle, who has already sunk millions of his own fortune into Edison. “It’s always a good sign to the investors coming in that those who are there continue to put money in,” Mr. Whittle said last month when asked why he felt the need to invest more of his own money.
The investment firms are J.W. Childs Associates of Boston, Zesiger Capital Group of New York, Richmont Leeds Co. of New York, and Blue Rock Capital of Delaware. New investment also has come from Benno C. Schmidt Jr., the president of the Edison Project; John Reid, the company’s chief operating officer; and Joel E. Smilow, an independent investor.
Mr. Whittle described the investment firms’ contribution as typical “second-stage money,” and said it was based on the early showing of the Edison Project’s first schools."This money is really raised based on how we have been performing,” he said. “There’s no question it is a big vote of confidence.”
Early critiques of the four schools that Edison managed in its first year have shown some promising results. (“Cautious Analysis of Edison Test Data Urged,” Oct. 16, 1996.)
The new capital will pay for expansion next year and in 1998. Edison is aggressively pitching its services to school districts."This capital is sufficient for some time,” Mr. Whittle said.
Although 11 of the 12 schools managed by Edison are operating in the black, he said, it is likely to be some time before the company itself turns any profits. “We estimate we have to have 30 schools to show a profit on a systemwide basis,” he said.
Sylvan Learning Systems Inc. has purchased a minority stake in Jostens Learning Corp., the prominent developer of software-based curriculum products.
Sylvan, based in Columbia, Md., operates more than 600 private centers where it provides supplemental education services to children. It also contracts with districts to provide services.
Sylvan bought 19 percent of San Diego-based Jostens last month. It plans to use Jostens’ software in its learning centers.
Jostens’ presence in some 13,000 public schools will give Sylvan new opportunities to pursue partnerships with districts, company officials said
--MARK WALSH mwalsh@epe.org
