Online Learning Firm Targets Businesses.

Long Beach online education company Kiko Inc. received $8 million in second-round financing last month, and in a bid to reach profitability, it is using the funds to shift its focus away from academic learning.

Kiko is going corporate.

A learner is a learner is a learner, said Kiko President Kevin Vogt, referring to the applicability of his company s services to business professionals as well as to students.

Kiko which stands for knowledge in, knowledge out was founded in 1999 by for mer Cisco Systems executives Vogt and CEO Stephen Perkins, who set out to build a company that would provide online tools that facilitate teaching and learning at all educational levels.

They did just that inking deals with all levels of academia, including the L.A. Unified School District, USC and San Diego State University.

Despite being staked with $9 million in venture capital from outside investors, revenues were slow to materialize, due in part, Vogt said, to teachers who are not adequately trained or tech-savvy enough.

The company also faced competitive pressures in a market crowded with larger e-learning providers like ClicktoLearn.com Inc., Learning Tree International and Learn2.com Inc. Even Cisco has poured millions into its own e-learning ventures.

Faced with that competitive environment and with a new round of funding in hand from investors Credit Suisse First Boston, Broidy Capital Management and others, Kiko has shifted its focus to what it expects will be a more profitable target market businesspeople.

Vogt said the corporate world is ahead technologically and is more aggressively pursuing online learning to cut costs and operate more efficiently.

The original Kiko model, which was to provide customizable online networks where teachers and students could interact, could indeed be much more lucrative when applied to a business environment.

According to a report published last year by Merrill Lynch, the global corporate and government learning market generated $300 billion in revenues in 2000, and it is expected to grow to $365 billion by 2003. Web-based corporate learning is expected to reach $11.4 billion by 2003, up from $550 million in 1998, the report projected.

In 1999, the stock market was enamored of e-learning companies. VCs poured millions into the sector and a slew of entrepreneurs formed e-learning ventures to cash in.

Kiko intends to set itself apart from competitors by focusing on the small- to medium-sized business segment. A recent customer, San Francisco-based software company Actuate Corp., is an example of the type of business that Kiko is now targeting. After Actuate recently acquired another software provider, Tidestone Technologies, it used Kiko s knowledge networks to educate its employees about Tidestone s software products.