Strategic investments

3 Months Ended

Mar. 31, 2022

Investments, All Other Investments [Abstract]

Strategic investments

Strategic investments

In the fiscal year ended December 31, 2021, the Company made a strategic investment of $10.0 million in cash for preferred shares of privately held online education platform technology company. On February 28, 2022, the Company completed the second tranche purchase of this investment, which resulted in an incremental cash investment of $5.0 million, for a total value of $15.0 million. The estimation of fair value for this investment requires the use of significant unobservable inputs, and as a result, the Company classifies this investment as Level 3 within the fair value hierarchy.

The carrying value of this investment is adjusted based on price changes from observable transactions of identical or similar securities of the same issuer (referred to as the measurement alternative) or for impairment. Any changes in carrying value are recorded within other expense, net in the condensed consolidated statements of operations. As of March 31, 2022, there have been no observable transactions that would cause the Company to adjust the carrying amount of the investment, resulting in no realized or unrealized gains or losses for the three months ended March 31, 2022.

The Company evaluates this investment for impairment at each reporting period based on a qualitative assessment that considers various potential impairment indicators. This evaluation consists of several factors including, but not limited to, an assessment of a significant adverse change in the economic environment, significant adverse changes in the general market condition of the geographies and industries in which the investee operates, and other publicly available information that affects the value of the investment. No adverse factors were noted in the assessment performed as of March 31, 2022, resulting in no impairment losses during the three months ended March 31, 2022.

The Company did not own any strategic investments during the three months ended March 31, 2021.