# Kno (2009 – 2013)

- URL: https://girisimcikafasi.com/en/startup-graveyard/kno/
- Sector: Education
- Country: United States
- Total funding: $73.4 million
- Cause of closure: Acquired and shut down

## What did it do?

Kno was an education technology company offering students digital textbooks and learning content. It first designed a dual-screen tablet for reading textbooks, then focused on an interactive textbook app for iPad, Android, Windows and the web.

## Why did it shut down?

The 14.1-inch dual-screen tablet unveiled in June 2010 was overshadowed by the iPad, launched the same year, and in April 2011 the company licensed its hardware designs to Intel and switched to software. Although it raised a total of $73.4 million in venture capital, including a $37.5 million Series C in 2011, students' move to digital textbooks remained slow. According to Om Malik, its deals with publishers left the company with only 15 per cent of gross revenue, and an attempted merger with CourseSmart also came to nothing. Intel bought Kno in November 2013; the price was not disclosed but, according to Malik, was around $15 million. Kno's website was shut down and the service was folded into Intel's education products as Intel Education Study.

## The story

Kno was founded in Santa Clara in May 2009 by Osman Rashid, a co-founder of Chegg, and Babur Habib, who came from the semiconductor industry. The aim was to build a device that would take students' textbooks digital. The first design, unveiled in June 2010, was a textbook tablet with two 14.1-inch touchscreens. At the same time, however, Apple's iPad was beginning to dominate the tablet market.

In April 2011 the company changed course, licensed its hardware designs to Intel and focused on software. Its textbook app for the iPad came out in June 2011, followed by Android, Windows and web versions, and in August 2012 it entered the K-12 market. It raised a total of $73.4 million from investors including Andreessen Horowitz, Goldman Sachs, FLOODGATE, GSV Capital and Intel Capital, which put in $20 million. Kno signed deals with 75 publishers and built a catalogue of more than 225,000 titles.

But the business model was weak. According to Om Malik, the publisher deals left the company with only 15 per cent of gross revenue. Students were not moving to digital textbooks as fast as expected, and a planned merger with CourseSmart did not happen.

On 8 November 2013 Intel announced that it had bought Kno. The price was not disclosed; according to Malik's report it was around $15 million, a small fraction of the capital raised. Intel took the team and the technology, while founding CEO Rashid did not join Intel because of a disagreement over the company's direction. Kno's website was shut down and the service was added to Intel's education portfolio as Intel Education Study. Kno shows that a hardware start-up whose first product is overshadowed by a giant rival may not be able to rescue an expensive journey by switching to software.

## Lessons

- If your hardware plans coincide with a giant rival's launch schedule, prepare a move to software before you spend most of your capital.
- In a model where you license content from others, work out your revenue share from the start; after paying publishers, Kno was left with a small slice of gross revenue.
- A large strategic investor may later turn out to be your only realistic buyer; Intel bought a company it had both invested in and licensed from at a low price.

## Sources

- [Kno](https://en.wikipedia.org/wiki/Kno)
- [Intel Has Acquired Kno, Will Push Further Into The Education Content Market With Interactive Textbooks](https://techcrunch.com/2013/11/08/intel-has-acquired-kno-to-push-further-into-the-education-market/)
- [How much Kno sold for & why it failed](https://om.co/gigaom/how-much-kno-sold-for-why-it-failed/)
- [Intel acquires Kno to boost its digital education library](https://www.engadget.com/2013-11-09-intel-acquires-kno.html)