By Liana B. Baker
(Reuters) - HotChalk, an educational technology startup, is in talks to raise at least $75 million from private investors, valuing the company at roughly $500 million to $800 million, according to people familiar with the matter.
The company, which helps universities and colleges create online degree programs, has hired Citigroup Inc (NYSE:C) to assist with the fundraising, said the people, who asked not to be named because the matter is private.
Representatives from Citi and HotChalk declined to comment.
HotChalk, which launched in 2004, sells software to universities that enables them to put their degree programs online and provides them and their students with technical support.
Concordia University-Portland, a member of the U.S. Concordia University System, based in Oregon and operating in several U.S. states, uses HotChalk to help run its online Master of Education and Doctorate of Education degree programs. HotChalk will announce new customers in the coming months, one of the people said.
This would be the largest funding round to date for the Campbell, California-based HotChalk and its first since the financial crisis.
Chief Executive Edward Fields said in a 2008 interview that it had raised about $15 million in venture capital and private funding since its founding. NBC News, McGraw-Hill (NYSE:MHFI) Education, Peacock Equity Fund and Mohr Davidow Ventures participated in the last funding round in 2008.
HotChalk is one of a number of companies that have sprung up in recent years to compete with established education software makers.
On Tuesday, one of HotChalk's competitors, Coursera, said it had secured $49.5 million in funding from New Enterprise Associates, as well as existing investors such as Kleiner Perkins Caufield & Byers. Coursera also said it is expecting to raise an additional $20 million by the fall.
Reuters reported earlier this month that Instructure, which makes a tech platform called Canvas that helps colleges and school districts manage their classrooms, had filed confidentially for an initial public offering.
BlackBoard Inc, which provides custom software to higher education students collaborate on assignments and communicate with teachers, is also exploring a sale.