PATHGATHER/DEGREED Investment Thesis

The truth is that we never stop learning, whether we want to admit that or not. In fact, a certain thirst to learn more can give you an edge in your professional life, adding qualifications, improving your chances to get promoted, and, of course, being able to command a higher salary. A lot of major companies have realized that the education process should take place on the job to retain talent, rather than sending them off to college. Pathgather provides these companies with one of the smartest corporate learning and development systems out there.

We liked Pathgather, because it fit many of the parameters we set for investments in our enterprise software portfolio. The company has a very good and dedicated team that understands how to continuously innovate. It also boasts several prominent co-investors, such as Bloomberg, Techstars, and Matrix Partners, that helped us get comfortable with our thesis. We also believed that the company could scale quickly if they won their first major mandates. And winning mandates they did! Boasting clients, including T-Mobile, Hewlett-Packard, or Qualcomm, Pathgather quickly proved that there is demand for its software solutions. And finally, we thought that their business model could make them an attractive acquisition target for larger companies in the overall education space.

And our thesis proved correct in the sense that once Pathgather started to gain traction and generate revenues, the company became a target for acquisition fairly quickly, in fact, within less than two years of us investing. As a result, San Francisco-based education technology Degreed ended up acquiring Pathgather in 2018 in a nice deal for investors. That is because Pathgather perfectly fit Degreed’s focus on professional and lifelong learning.

From EIP’s perspective, it was nice to see a team execute on their business plan and provide a quick exit for investors, proving that our investment thesis and overall portfolio strategy worked once again. Today, Pathgather maintains a fair degree of independence as a sub-company under the Degreed umbrella, but with essentially the same leadership team. We will never stop learning, and we will certainly not stop telling you about this successful case study!