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When Max Yoder started Lessonly, he hoped that a few thousand people would use his learning software. Now, over a million people at more than 500 companies around the world use Lessonly for team learning in their workplace. And the Indianapolis-based company doesn’t seem to be slowing down anytime soon.
With the announcement of today’s $8M Series B funding round, Lessonly is gearing up with ambitious goals to reach ten million more learners with their online training and enablement software.
Yoder and his co-founders created Lessonly in response to learning management systems that were often built for human resources compliance and disliked by frontline employees for their clunkiness. “We wanted to give employees, teams, and companies access to the essential information they needed to do their jobs,” said Yoder.
The learning management system (LMS) market is crowded, and many human resources teams use tools like LearnCore, MindFlash, or even Google Docs to host their training materials. Lessonly says they’re aiming for a totally different market. Their software is largely used for sales and customer support training—with more focused tools to help those teams capture work information in online lessons and deliver customized lessons to employees.
Lessonly views their focus on sales and support training as one of their greatest differentiators, and their customers include a range of Fortune 100 companies and forward-thinking teams such as NBC News, Trunk Club, Ibotta, Birchbox, Thumbtack and more. “Our software helps hundreds of sales and support teams to learn, practice, and perform at the highest levels,” Yoder said. “Lessonly is all about employees doing better work—and this capital allows us to invest in building the most innovative learning platform in the market.”
Lessonly plans to use the $8M Series B to double down on product innovation, expand their team, and reinvent how their software delivers value. The funding round was led by OpenView, an expansion venture fund based in Boston. Other investors include Rethink Education, and Indiana-based Allos Ventures and High Alpha.
The Challenge and Opportunity of Midwest Tech
Perhaps the most common advice to budding entrepreneurs looking to grow their companies? Move to the Bay Area. The sheer density of high-growth startups, experienced tech talent, and available venture capital in startup havens like Silicon Valley or New York reinforces that suggestion. In the past, founders looking to build a software company in the heart of the country have faced some hurdles to growth.
Access to venture capital is far more limited once you leave the coasts. Founders in the Heartland must compete for limited capital, or convince investors from the coast that their upstart is worth the while. Similarly, tech talent congregates where jobs are available. Hundreds of thousands of the nation’s best and brightest tech leaders, engineers, and coders are lured toward Silicon Valley and the Bay Area. This creates less opportunity for mentorship or connection, a lack of experience scaling SaaS companies, and decreased market exposure to investors. That leaves the Midwest—and most of the United States—with insufficient tech talent. While this trend is starting to shift as more workers begin to look for jobs outside expensive tech hubs, it’s up to non-coast tech companies to woo this talent to their growing markets.
Companies like Lessonly acknowledge the challenges of the Midwest, but they also see drastic advantages to calling Midwest cities like Indianapolis home. “Non-coast cities are increasingly attractive to investors—it costs less to start and run a software company in Indianapolis, Saint Louis, or Columbus. Plus, the cost of living alone is almost 200% less than San Francisco,” noted Kyle Lacy, Lessonly’s VP of Marketing, who previously worked at OpenView. “We don’t need to have a private chef or masseuse to be one of the best places to work in Indiana, and that keeps us lean and focused on growth.”
Doubling Down on the Midwest
Midwest cities continue to lure tech employees attracted to smaller markets with ample amenities, but lower costs of living. Last year, Indiana was the number two state in the U.S. for software job growth—second only to another midwest tech hub, Kansas.
Lessonly has proven they play the SaaS game as well as any company on the coast , and they believe that their midwestern roots differentiate them from their competitors. Yoder noted, "We really take pride in a core Hoosier value: neighbors who help others. Our clients tell us how much our software has improved their learning, their productivity, and their people.”
In an effort to further celebrate the growth of midwest tech, Lessonly announced a 2018 conference in Indianapolis: Yellowship. Midwest movers-and-shakers were ecstatic about the news, including former ExactTarget CEO Scott Dorsey. Dorsey is no stranger to the challenges of growing a tech company in the Midwest—he built ExactTarget in Indianapolis and sold the company to Salesforce in 2013 for $2.5 billion dollars. He’s now Managing Partner at High Alpha and invested early in Lessonly. "I'm super excited to see Yellowship come to Indianapolis,” Dorsey noted. “The Lessonly team continues to impress and inspire me—and I'm sure that this conference will do the same.”
Dorsey is betting hard on tech growth in the Midwest. If Lessonly’s journey is any indication, the midwest tech boom is just beginning.
