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EdTech News Roundup - Week of 1/31-2/6
Two publishers walk into a bar...to talk about workforce skills
Welcome to a whole bunch of new readers (thank you Tyler and Luke!). You signed up just in time for an update on the goals of this newsletter.
For reference, 2 weeks ago I talked about my new job and last week I wrote about reader feedback from last year. This week centers on what this newsletter is and why I write it. First, what this newsletter is:
A short, weekly overview of the top stories in EdTech
Each post should take no more than 5 minutes to read, teach you one thing you didn’t know, and make you smile at least once.1 I am intentionally NOT comprehensive. There are several other fantastic | newsletters and media | organizations | that | fill | that job. Instead, I focus on the handful of stories that stick in my head over the course of the week.
Call me out if…when…I mess something up, but please keep the following in mind as you read:
This newsletter is a labor of love: I do not make money from it and have no plans to do so
I write to form an opinion, not because I know I’m right: they say that the best way to learn something is to teach it to someone else. Writing about it for an audience feels like a close second to me. My goal is to take a stance` on each topic so that people smarter than me (all of you) will help sharpen or disprove them
Read this to build context on my thought process: so much of life, especially in startups, comes down to making a good decision at a specific moment of time. Sometimes, that decision has to be made blind, but it is better to have context. My hope is that reading this gives you a sense for how I think and whether we might some day enjoy working on something together. For those who respond, I get to build some context on you too : )
So, there you have it. No more announcements for a while. On to the news!
Funding / M&A / IPOs
MOS raises $40M: historically, MOS scraped the web to build a proprietary database on scholarship offers for college students. With this round, they have expanded beyond scholarships and into digital banking, hoping to be first in line to offer financial services to today’s students. This sounds like a similar path to what Sofi is attempting, translating student loan repayment into full-stack banking, albeit with a younger target cohort
Free Agency raises $10M: Free Agency’s “talent agents” help their (mostly mid-career) clients land better jobs at better salaries than clients could on their own. Getting the details right matters here, but I am unabashedly bullish on the central theme of giving talent more leverage in negotiating with employers
Pearson acquires Credly & Cengage acquires Infosec for $190M (same links as above)
Pearson and Cengage are two of the largest textbook/courseware publishers in the world.2 Credly is the world’s largest digital credential provider. Infosec is a training company that has trained 100K+ learners in cybersecurity skills over the past 18 years.
Why am I lumping these acquisitions together? The rationale for both is based on the apple of every EdTech investor’s eye - workforce skills. However, the application of this rationale could not be more different.
Credly, combined with last fall’s acquisition of workforce analytics platform Faethm, gives Pearson one of the most comprehensive views of the workforce skills market in the world. Perhaps more importantly, they *own* this access and can turn it on or off for others at their discretion. The thesis appears to be that they can build content dynamically aligned to market needs.
Cengage chose a more vertical approach in acquiring Infosec. The Infosec team comes with existing content and relationships in a niche Cengage expects to grow from $1 to $10B in the next 5 years. The thesis is “retain and invest in Infosec employees and products to support future growth.”
So, who wore it better?
The publishers’ traditional strength has been in the subjects they dominated. Pearson owned biology with their Campbell franchise while Cengage won Economics with Mankiw.3 This suggests Infosec was the more pragmatic purchase.
However, Pearson’s CEO, Andy Bird, made an important point when he called the workforce skills market the “biggest addressable market for learning” in the world. It is unclear whether the skills needed to win (meta, right?) in the zero-sum Higher Ed market are the same that will win in the far larger workforce skills market.
Bomb threats at HBCUs: Likely tied to the start of black history month, at least 14 HBCUs received bomb threats at the start of February. It is heartbreaking and scary just reading about these threats, I can’t imagine how hard it is to be a student and/or administrator on one of these campuses right now
New scrutiny over for-profit —> non-profit university conversions: While I’m generally positive on public < > private partnerships in Higher Ed, I’m also happy to see scrutiny over instances where a for-profit spins out a non-profit, retains the same management team for both entities, and doesn’t substantially change their operations
New Mexico bringing in National Guard to substitute teach: and I can’t blame them for trying it! If you have young people and/or career switchers in your life, I hope you’ll encourage them to consider teaching! Even if they don’t want to teach long term, the Wall Street Journal points out, “Teachers’ ability to absorb and transmit information quickly, manage stress and multitask are high-demand skills” for any career
Thing(s) I’m thinking about
Trying to understand the impact of the $190B in COVID-relief dollars allocated to K12 schools feels overwhelming. Other than masks and tutoring (evidently we have carte blanche for tutoring), it seems like an ever-shifting landscape.
I’d love suggestions for content to read and people to follow (Jess Gartner is my current go-to) to get better equipped on the topic.
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I try very hard to stay neutral here, but its important that you know my potential biases
The world is a very serious place these days, we all need a little levity. I do my best to balance the serious stuff and the fun stuff
Both have substantial non-textbook/courseware businesses, but bear with me here
We can debate the specifics, but I believe my macro point holds