Blog Post

‘Open’ Textbooks Provider Flat World Inks Berteslmann Investment

Germany’s Bertelsmann Digital Media Investments is leading a $15 million investment in to New York-based Flat World Knowledge, which gives away college textbooks for free online but charges for printed versions (announcement).

The company has an “open textbook” model that echoes the predominant split in news publishing — entire books online for free, but revenue generation through pay-for print books, e-books for iPad and Kindle, audio books, PDF downloads and interactive study aids. The company says over 1,600 professors and over 900 colleges have used its texts, although it doesn’t provide a revenue figure.

It says the funding is for “the rapid expansion of (its) catalog beyond business and economics to include books for the 125 highest-enrolled courses on college campuses.”

This is a second round. The company had previously raised $10.5 million from investors including Greenhill SAVP, High Peaks Venture Partners and Valhalla Partners.

It’s the kind of target investment normally associated with education powerhouses like Pearson (NYSE: PSO), which is pushing heavily in to online learning.

3 Responses to “‘Open’ Textbooks Provider Flat World Inks Berteslmann Investment”

  1. brad says: “Flat World Knowledge has a flawed business model. They license their textbooks CC BY SA NC.”

    You are mistaken. They license their textbooks as “CC-NC-SA”. Their revenue model depends on students opting in to purchase alternate print and digital versions to the free, HTML version. They have gained traction, and will no doubt be rolled up by Bertelsmann sooner, or later. Remember, Bertelsmann owns Random House, and Random House sold its textbook division some years ago. Bertelsmann has been eyeing companies like Cengage and Houghton. FWK may be their new baby. The big question here becomes whether or not FWK’s affordability model (enabled by Open licensing) will be maintained once they’re rolled up. It’s often the case that when disruptive price plays are rolled up, they lose ground to the bean counters who just bought them. Bertelamann is not known for making, and then growing, successful strategic investments. This will be an interesting one to watch.

  2. Flat World Knowledge has a flawed business model. They license their textbooks CC BY SA NC. This license would allowed anyone to host the textbooks for free.

    How are they going to make money if someone quite legally gives away what they charge for?

    I guess they hope no one does? It’s dumb.