A Bay Area heavy hitter in the textbook sales and rental market swooped in to pluck up HubEdu Inc., a months-old startup that's been growing in the downtown EvoNexus incubator.
San Mateo-based Rafter Inc. bought HubEdu, which provides textbook adoption, comparison shopping and pricing technology to schools to help students save cash.
HubEdu was one of 13 initial hot startups that moved into the 15,000-square-foot incubator at 101 W. Broadway in late January, and it's now the first company to get acquired.
There are now 20 startups at the incubator, which is run by EvoNexus, an arm of the San Diego-based nonprofit tech industry association, CommNexus.
The move accelerates Rafter's plan to provide a single, cloud-based platform that reduces the cost of education for students.
"The majority of students who begin college don't graduate, and the reason they don't graduate is cost," said Mehdi Maghsoodnia, CEO of Rafter.
HubEdu offers cloud-based services that improve the processes of textbook adoption, distribution, pricing and comparison shopping.
With the acquisition, Rafter will be integrating HubEdu's services into the Rafter Course Materials Network.
“It’s a strategic purchase for Rafter,” said Jonathan Simkin, CEO of HubEdu, Friday. “Our vision for the industry is aligned. They’ve built a lot of interesting technology around improving course book affordability for students.”
His company has approached the market from a different perspective of pricing analytics and letting students compare prices from a variety of sources.
The acquisition will amp up HubEdu's exposure to the market; the company was prepping to pilot with three different schools before it was purchased. Rafter has a whopping 500 partnerships with schools on a network that covers 5.5 million students.
“This is the best way to start rolling out the software suite,” Simkin said.
Simkin's company has come a long way since its early days, when it was co-founded in his dorm at Harvey Mudd College in Claremont, Calif.
The company has not received any formal investment rounds to date – only just a small family round.
Earlier this year the company got accepted into the downtown EvoNexus incubator program. Thanks to the incubator's model of donated space and services, startups don't have to pay a dime to work in the Irvine Co.-owned building, despite its priceless location just steps from business partners, bars and restaurants.
Under Irvine's partnership with EvoNexus, the landlord offers the startups its space rent free in hopes they will someday expand and move into one of its buildings.
That won't be the case with HubEdu, however, whose three-person team is moving to the Bay Area to join the 115-person Rafter team.
HubEdu will move in less than two weeks to prep for the fall rush before school starts.
“There’s not too much time,” said Simkin. “There’s zero time. We should probably already be up there.”
Simkin, who has built up the company in Southern California, is a bit nostalgic about uprooting and heading north.
“I’m excited. San Francisco is a really exciting place, with a lot happening. I’ll miss San Diego," he said. "It’s been a phenomenal place. I feel the energy here and in the incubator being positive toward technology."