Founded in 2001, Moodle is a leading light in the opensource movement. By relying on partners (there’s currently 84 of them) to pay royalties for using the software, end-users get the software for free (but paying for support and services) whilst funds are generated for the central project.
But now, Martin Dougiamas, founder and CEO of Moodle Pty Ltd, has succumbed to an outside investor, with France based Education for the Many, injecting $6m dollars into the company.
Initially, nothing is changing apart from Education for the Many becoming a minority shareholder and getting a seat on the Board. Dougiamas says the investment will “boost the Moodle project to a much higher level of effectiveness and sustainability.”
Sustainability is perhaps the key word in this statement.
Some researchers suggest Moodle holds a 50% marketshare within the Higher Education market in Europe, that’s a chunky user base that needs supporting. Moodle HQ does not directly support end users, leaving that to the Partners, who then pay a 10% royalty from that revenue. But I wonder how many of these installations are supported by one of the 84 partners, and how many are supported by internal team in education establishments?
Succumbing to the $6m investment suggests the royalty fee alone from the 84 Partners is not enough to sustain the project.
So whilst Dougiamas has got what he needs (a cash injection), what does Leclercq expect to get in return?