Instructure Sells Bridge (LMS) For $50M to Learning Technologies Group

I don’t often write about M&A transactions unless they’re strategic but this one points out an important topic. In the complex, competitive market for HR and learning solutions (it is the reddest of “red oceans” out there), companies have to focus on sales, marketing, and positioning to succeed.

Here’s the back story. Instructure is a $250M+ company that disrupted Blackboard to develop one of the most successful campus education platforms in the market (Canvas). Along the way the company decided to get into corporate learning, so they built an LMS called Bridge. I worked with them for several years to get Bridge positioned and while it was a successful and well-designed product, they had a hard time positioning and selling it.

Why? Because the core of the company was focused on the education (not corporate) market and the positioning of Bridge was confusing. Was the product “Bridge by Instructure?” or “Instructure Bridge” or “GetBridge?” And the company continued to believe (incorrectly) that by selling the Instructure brand to students they would “grow up” and then want Instructure in their companies.

Well as I’ve learned many times over the years (Blackboard learned this lesson), there is virtually no relationship between the campus education market and the corporate training technology market.

Businesses need LMS and LXP systems to manage corporate training, technical education, compliance, and all sorts of business-oriented programs. They need e-commerce features, detailed analytics, and integrations to ERP systems, VR systems, scheduling systems, and all sorts of other corporate applications.

Universities and schools need systems that are easy for students, teachers, and assistants to use – and they have to be inexpensive, simple, and focused on instructor-led education. There is almost no overlap between the markets.

Blackboard learned this lesson when the company struggled to sell Blackboard for Business (it had many names), but never really got much traction.

The Instructure management team, who are among the smartest folks I’ve met, struggled with this conundrum for years. They expanded Bridge into an end-to-end solution and I believe it became one of the best-designed “talent experience” platforms in the market. But their marketing and sales channel was never clear, and I sensed the company was struggling to balance the focus between its educational market and its corporate ambitions.

So this week they threw in the towel and sold Bridge for $50M. This is a low number given that Bridge was generating more than $21M in recurring revenue and the market is massive and growing. So I’d say LTG got a pretty good deal, if they can make this work.

LTG (Learning Technologies Group) has their own integration challenges. This is a $180 Million public company that now owns Bridge (LMS and Talent), PeopleFluent (Recruiting, Talent, LMS), Watershed (LRS – hot new market), Instilled (LXP – also a hot market), Vector VMS (contingent contract management), Breezy (recruiting platform), Affirmity (D&I compliance), LEO and Preloaded (content development), and Rustici (core learning tech). In other words, LTG plays in almost every segment of the HR and Learning tech space.

Each of these spaces is different, and LTG is ambitiously working to grow them at the fastest rate. The LRS market (Learning Record Store), for example, is growing like crazy and we will be publishing a look at this in the coming weeks. The LXP market is wildly hot and becoming the core of learning. So LTG, which has a management team who knows the space well, has a lot of little “firecrackers” in its arsenal.

The lesson learned here is simple: the L&D and HR tech market is not an easy one to win. There are a lot of well-run successful vendors in every segment, but if you don’t focus on your target market you can easily become distracted. The lesson for Bridge is that of sales and marketing. Once you figure out who your target buyers are, you have to focus like a laser on their needs and aspirations – and try not to “guess” or “assume” they want something else you have in your quiver.

If you want to really get deep on the HR Tech market, let me give you a few resources.

My congratulations to both LTG and the Bridge leadership team on this deal. I’m sure everyone is excited and this helps Bridge customers stay assured that LTG will take good care of their investments.