EdTech News Roundup - Week of 11/8
$1.7M for 5% of future income, 30-year fixed
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On to the news!
Funding / M&A / IPOs
Brightchamps raises $51M: Goa-based Brightchamps teaches children to “code and other skills”, with over 100K registered users on the platform. While Techcrunch spent most of the article concerned about whether they were or weren’t in Stealth Mode (sigh), there is an interesting comment at the end about potential peer-to-peer features (my EdTech hobby horse)
Framework raises $2M: Framework provides “on-demand business school” for startups. ~10 years ago there was a wave of startups focused on the workplace learning/business education space and the ones that survived were all platforms like Degreed/Pluralsight/etc. There is an emerging second wave now, headlined by companies like Quantic, Akimbo, Collective Academy, and Reforge. I’m curious to see if the market has changed sufficiently that a full stack school-replacement solution can win at scale
PowerSchool acquires Kickboard: Kickboard provides “behavior management solutions” to K12 schools. They’ve been acquired by Vista Equity-owned Powerschool who remain acquisitive post-IPO
Education Testing Services (ETS) acquires “majority stake” in Kira Talent: speaking of exit options, ETS is leaning into the growth of their newly formed venture unit, which now includes at least 12 other companies. Kira Talent provides a “holistic admissions platform” to university clients
Stories
2U partners with National University of Singapore (NUS):
NUS is the top university in Singapore, one of the most respected institutions in Asia, and #29 in US News global ranking (Top 5 outside of US/UK). NUS is less well-known in the US, which they attempted to rectify via a joint venture with Yale | that fizzled out this year.
This partnership highlights a trend that my admittedly US-centric worldview (for shame!) often forgets - the most exciting competition in the OPM market is international. Some of the competitors are household names, like Coursera and 2U’s edX (I’m assuming the acquisition goes through). Others are less so, like KeyPath, Online Education Services (OES), and Emeritus. HolonIQ puts the international OPM market at $3.7B by 2025, but I think COVID aftereffects could drive it to be even bigger.
Notably, this 2U < > NUS deal is for short courses, not degree programs. I’m curious whether this is both sides feeling each other out (reminder that NUS’ partnership with Yale did not go well) or the result of a head-to-head competition with Emeritus, who tends to focus on short courses. Either way, 2U’s international activity here is a harbinger for the rest of the industry.
2U also reported Q3 results this week - they were good (technical term), with most revenue growth coming from the degrees segment.
Other Tabs
USC’s $115K Master’s in Social Work: Smarter people than me will write books about how we got to where we are with online education and student debt. The only thing I have to say on the subject is its on us to figure out what the right accountability metrics are
Investing in people, literally: Slow Ventures invested in Marina Mogilko. Not for a company or specific educational training program, but gave her an unrestricted $1.7M in cash for 5% of her income for the next 30 years. Income share agreements (ISAs) are an often-divisive topic in the higher ed/workforce industry that could be a force for accountability (see above). This headline was as weird for me to write as it was for you to read, so there is still a lot of work to do before we get there. However, it seems billionaires like Eric Schmidt and Robert Smith may help grease the skids along the way
Strada names new CEO, Stephen Moret: Strada, formerly known as USA Funds, is the US’ largest guarantor of student loans. However, they’ve evolved into much more than that - acquiring companies like Inside Track, Road Trip Nation, and CAEL and investing in many more. There are a few entities in the higher ed/workforce world that play a sometimes-quiet but highly influential role in how the industry evolves. Strada is one of them, making their leader a key industry figure to watch
Masterclass throws a party: literally and figuratively. Holy moly, there is a lot to get through in this release
Byju’s announces innovation hub: I continue to be impressed by the pace of capital deployment by Byju’s. The pace has also made it hard for me to suss out their strategic plan outside of raising a lot of capital (including $1.2B in debt just last week) and acquiring quickly. I expect that this innovation hub will be a feeder for this strategy
Rachel Carlson (Guild founder) and Aileen Lee (Rachel’s Series A VC) walk through Guild’s Series A pitch deck: a paywalled (sorry!) but nice story showing that founder < > VC relationships aren’t perfect and that billion-dollar businesses don’t always start out that way, they evolve over time
Thing(s) I’m Thinking About
There are two, seemingly uncorrelated, trends occurring across the United States:
The death of the suburban mall: called “zombie malls” by the New York Times, these malls were the retail workhorses of the 80s, 90s, and early 2000s that have been losing share to online commerce for years.
The inflexibility of public K12 infrastructure: public school systems use long-term financing to build new infrastructure, planning for student growth/decline over decades. When ~5% of students leave the system for homeschooling in 18 months, this planning is warped. Even if these students eventually return, school infrastructure is rarely built with year-to-year flexibility in mind
Where might a capacity-constrained school system look for easily-partitioned additional space? How about malls?
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