EdTech News Roundup - Week of 5/10
Calbright & a reason to shake hands post-COVID
Clubhouse released their Android beta app last week - if you need an invite (either iOS or Android), send me a note and I’ll get you set up.
Some meaty topics this week, on to the news!
There is an easy narrative around Calbright of government waste and mismanagement. The leadership team was given $175M in state funding and graduated 12 of the 904 students that have enrolled since inception. That is not good!
This also comes in the face of the relative success of the California Online Education Initiative, which helped a large portion of California’s Community Colleges go online over the past several years. It is reasonable to argue this funding could have been better spent elsewhere.
I’m hesitant to pile on to this narrative. Many of the original premises of Calbright - starting from 0 rather than on top of existing community college infrastructure, competency-based education, employer-driven programs that grant certificates on the way to a degree - are things many of the folks reading this newsletter (and myself) champion. Many private-sector folks signed on to the Calbright team to try and make good on these goals.
I’m still wrestling with what to make of it all. I do know that as soon as an organization (public or private) receives that type of funding, they also receive a target on their back. I hope that it does not discourage more experiments in the public sector and/or public-private partnership.
For folks who want to read the full CA state audit, you can find it here.
Coming out of COVID, Higher Ed faculty are 48-58% (depending on the metric) more optimistic about using technology in their classrooms. How this translates to continued adoption of technology tools is still up for debate.
If this is giving you deja vu, that is because it was only one month ago that I wrote about Class’ most recent fundraising. Both companies were founded last year and have now raised a collective ~$110M.
My guess is that it is mostly a coincidence that the two companies raised so close together, but I can’t help myself in thinking about this in terms of a go-to-market race. I’m curious to see whether we hear from Blackboard and/or Instructure about their own investments in the classroom experience.
In addition to their $1.5B valuation, Handshake’s business is impressive. A couple stats for y’all to hold on to:
100% of the Fortune 100 are customers: I’m inventing a new VC heuristic here - anytime a business with at least modest scale (and Handshake is beyond modest scale) has a KPI with 100% in it, pay attention
Closing on $100M in annual revenue: $100M is a watershed number at which many companies more seriously contemplate IPOs
18M students / 1,200 HED customers: We typically estimate US HED as ~20M students and ~4500 institutions. Handshake’s active user number encompasses both students and young professionals, but covers 49% of US college graduates that received a job offer between 2018-2020
In our discussion Friday, Michael Colonnese also pointed out that much of this growth came amidst a significant business model shift. In their early stages, Handshake monetized via university contracts, but now (likely) derives the majority of their revenues from (over 550K) employer partners.
As a final note, this is yet another home run by Reach Capital, who are on a tear this year. I’d love to see one of the big publications do something on their major milestones/exits this year.
Earnings Szn - Zovio, GCU, & Coursera
Grand Canyon University: Headlined by 6.9% growth in services revenue and 8.4% growth in non-GCU (OPM) students.
Coursera: Revenue accelerated 64% compared to last year, including an 80% jump in the Degree (OPM) business, which is on a $50M annual run-rate ($12M last quarter). The business looks strong from the outside, though there was an anomalous early lock-up release just before earnings.
Comp at Coinbase - *recommended for people leaders* continuing the narrative around pay transparency
GSV Elite 200 startups - EdTech startups to watch
Elon Musk’s school - sigh/shrug
Does test optional help diversity - I’m looking to get smarter on this topic, I would like to read more about it if y’all have suggestions
Don’t forget about ISAs! - after a lot of noise in 2019, 2020/2021 have seemed quieter as the infrastructure is built?
There are now 4 types (classes?) of Class in School:
Class: the peer group students enroll with
Class: the lesson being taught to students
Class: the physical location in which the lesson is taught
Class: the online locale in which the lesson is taught. But Class may not always be broadcast on Class, it could also be on Zoom, Meet, Engageli, or, heaven forbid, Blackboard Collaborate. You will have to ask your professor if Class will be simulcast in Class on Class.