EdTech News Roundup 3/7 - 3/13
Italian edtech startup raises a bootload
Funding activity is picking up and we are now in the fun part of the year where announcements start getting made in anticipation of GSV’s annual conference in early April. I’m hoping for some fireworks in the next few weeks.
On to the news!
Funding / M&A / IPOs
Byju’s raises $800M: Byju’s started as test preparation software for students in India, but has grown into a multi-channel international behemoth. They are not yet a household name in the US, but last summer I wrote about their plan for doing so (and the $2B they spent on acquisitions last year) via the acquisition of Epic and subsequent Epic partnership with Disney. It sounds like this round will go towards more inorganic growth
Medway raises $15M: Medway helps medical students in Brazil study for exams, particularly residency tests. This market segment is relatively “hot” in the US, including recently funded OnlineMedEd, recently acquired Osmosis, well-funded Sketchy, and large, but privately held UWorld.1 However, given the country-by-country variation in medical training/certification, it makes sense that a competitor might emerge in a large international market like Brazil
FourthRev raises $11.6M: FourthRev is a trilogy-like bootcamp services provider based in Europe. This round comes about a year after their seed fundraise, which the company used to grow 225% year-over-year.
Epicode raises $10M: Epicode is a “career acceleration platform for the tech sector”. For brevity, let’s just call it a coding bootcamp, though the team has interesting aspirations towards continuing to work with their learners over time
Chipper raises $5.6M: One of the nastier sides of the student loan industry is that borrowers are given a portfolio of loans and the default payback strategy is to pay them all down in equal amounts each month - regardless of individual interest rate and/or loan size. Chipper helps borrowers optimize the pay down of their portfolio so that they pay less interest over time ($309/month less, according to Chipper).
CourseHero acquires Scribbr: Scribbr is a Europe-focused proofreading and editing service that CourseHero adds to its growing | list of acquisitions. CourseHero provides a great example of a company that eschewed fundraising for most of its growth, but is now pivoting to embrace the additional strategic options (like inorganic growth) that venture funding can provide
As an investor, it is very important to have a couple of soapbox topics, ideally connected to things that help your portfolio do better. I don’t have a financial interest in any of the publishers doing well/poorly, but “PE firms gobbling up publishers like gummy bears” might turn into a soapbox.
Taking 10 of the largest publishers/curriculum providers, we’ve now got an even split of PE-owned and not PE-owned:
You can debate my list of ten, but there is a story here. Among the five PE-owned publishers, both McGraw and Discovery have been traded between PE firms in the last 12 months. It also would not surprise me to see Scholastic follow Pearson in going private as their leadership power struggle continues, meaning 7/10 would then be PE-owned.
This trend isn’t an inherently good or bad thing. My time at Cengage was quite nice, surrounded smart people who cared about the students who used our products; I’m sure others have had different experiences with other PE-owners. But it is important for thinking about how funding moves through the industry, particularly in the form of exit opportunities. Pearson spent $200M on Credly just 40 days ago - a new private owner might treat this as an opening salvo to more M&A or last call before a long winter.
Details on Amazon Career Choice: Career Choice is Amazon’s in-house version of Guild, where Amazon employees who want to pursue further education are routed to a select number (140) of partner education providers. This program has been long in the making, but one number stuck out to me: in the “weeks” since SNHU began accepting Amazon employees through Career Choice, they have enrolled 2400 new students
MIT Sloan unveils product management cert: I normally wouldn’t cover a certificate launch at a university (these happen all the time), but I thought this announcement was interesting in the context of the continued growth of Reforge and other non-university training providers
LearnLaunch unveils Fund III: LearnLaunch was one of the first dedicated EdTech ecosystem players, doing some of the hardest work in the industry of helping new companies get off the ground. It is great to hear they will continue to play that role via both their non-profit and their third venture fund
Florida wants universities to change accreditors every 5 years: I was, very briefly, excited about this bill. Were legislators pushing their state’s universities to assess institutional effectiveness on a regular basis? No. No, they were acting on a grudge. Legislators were mad that University of Florida’s accreditor publicly disagreed with a university decision to bar certain professors from serving as expert witnesses in a trial (a decision that was soon reversed). So legislators decided to try and mandate that the university change accreditors, a decision that the Chronicle estimates to cost tens of thousands of dollars for each of Florda’s 40 public institutions
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While they do not appear in the news often, if you know a med student, you know a person who has forked over $1000+ to UWorld