Edison Project Plans Expansion as New Investors Provide $71 Million Boost
The Edison Project will enter its fourth year of managing public schools this fall with its largest lineup of schools to date and a new round of private investment led by software billionaire Paul G. Allen, a co-founder of Microsoft Corp.
Mr. Allen's Vulcan Ventures Inc. of Bellevue, Wash., is investing $30 million in the New York City-based Edison, which contracts to manage charter schools and regular public schools nationwide. Additional new investors have combined with Mr. Allen to contribute a total of $71 million in Edison's latest round of private financing.
The money will help Edison expand from 51 schools in the 1998-99 school year to 77 schools this fall. Enrollment in the schools is expected to grow from 24,000 last year to 37,000.
"This is our largest capital infusion since our inception," said Christopher Whittle, the president and chief executive officer of Edison, which has received a total of $232 million in private investment since its founding in 1992. "It is increasingly easy to raise [capital]. In the early days, it was not."
Although the company is not yet profitable, Edison officials have said its growth is meeting expectations.
Mr. Allen helped found Microsoft with his friend Bill Gates, then left the company in 1983 for health reasons. He retains some 8 percent of stock in the software giant, and he has used his profits from Microsoft's rise in value to provide venture capital for technology-related start-ups.
In addition to Vulcan Ventures, Edison's latest round of financing includes $15.8 million from UBS Capital and undisclosed amounts from Continuation Investments Group Inc. and executives of Kohlberg, Kravis, and Roberts, a New York City investment firm.
Mr. Whittle last week also announced a deal between Edison and APEX Online Learning Inc., a technology company financed by Mr. Allen.
APEX, also based in Bellevue, provides online versions of Advanced Placement courses to high school students who don't have such courses available to them in their schools.
Edison plans to invest at least $5 million in APEX, and this coming school year will test ways of integrating classroom instruction with online learning at four to six of its schools, Mr. Whittle said.
Sally Narodeck, the chief executive officer of APEX, said Edison schools "have a very technology-rich configuration."
"For us, this is an opportunity to get close to a customer that is very focused on improving student achievement," she said.
Vol. 18, Issue 43, Page 10Published in Print: August 4, 1999, as Edison Project Plans Expansion as New Investors Provide $71 Million Boost