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EdTech News Roundup - Week of 8/16
"Bigger than Coursera in 12 months"
Short one today - it was a slow news week and I had a family event this weekend.
On to the news!
Funding / M&A / IPOs
Achieve Partners acquires Salesforce training platform Cloud for Good: I wrote about the rapid pace at which Achieve is deploying capital just two weeks ago and now they’ve added another company to the mix. Of note, entry-level Salesforce jobs pay almost $10K more than entry-level web development jobs.1
Course Hero acquires Cliffnotes and Quillbot: Course Hero appears to be on an Ed Tech nostalgia kick started when they acquired the team behind Spark Notes in June. Buying well-known legacy brands is an interesting counter-strategy to their competitor Chegg, which focuses on expanding their own brand.
EAB acquires DEI-training firm Seramount: EAB takes a step into the corporate world, a place where they have not played much historically. Seramount’s client list sounds impressive — it includes half of the Fortune 100. Entertainingly, EAB bought Seramount from Bonnier Corp, a media company focused on “outdoor enthusiasts.” How a company with multiple publications about yachts, cruises, and deep sea fishing ended up owning a DEI training company is a mystery lost in the sands of due diligence
Fresh off a $650M round of funding, Emeritus CEO Ashwin Damera told the Hindu Business Line, “We are the largest start-up in the higher education space coming from India, much higher than UpGrad and Great Learning. On the global front, we will be larger than Coursera in the next 12 months.”
Growing up as a pre-2004 Red Sox fan, I loved having an enemy. True story: in the late 90s, a well-meaning restaurant host sat my family at a table, looked at young me, and said “Derek Jeter sat right there just an hour ago!” I then threw a temper tantrum until they moved us to another table.
So, when an EdTech CEO picks a fight, I am here for it!
I also love how much detail Damera provides here. In this one interview, Damera discloses revenue (by geography), profitability, course production costs, plans for future course development, and pricing strategy!
Perhaps most importantly, he also shares Emeritus’ growth rate — they doubled last year and are, apparently, growing even faster this year.
Sean Gallagher, who runs Northeastern’s Center for the Future of Education, wrote this piece on incorporating more credentials into degree pathways. While the proposal is fine, two particular data points within it made my eyes widen:
“During the pandemic, 37 percent of adults pursuing education abandoned their educational goals due to financial hardships, changes at work, or lack of access to programs”
“Pre-pandemic government forecasts of adult learner enrollment suggested not growth, but a 2 percent decline by 2028”
Gallagher’s point is not that the adult learner audience is gone forever. Rather, he believes that many former degree-seekers are now seeking out alternative credentials via platforms like Coursera and edX (and Emeritus!).
Without more evidence about what’s driving Coursera and edX’s growing revenue during the pandemic, it’s hard to say the growth is caused by adult learners abandoning degree programs. But, it’s something to keep an eye on. In any event, I appreciate that Gallagher (through Strada polling data) identified a clear problem in the adult learner audience and proposed a strategy universities can use to attack it.
YikYak is back to terrorize a student near you: YikYak, an anonymous, location-based social app that raised ~$75M and enjoyed a brief, but white-hot moment from ~2013-2015 before shutting down in 2017, is back. For those who might have missed this social era, the app mostly centered around college students commiserating about strange sounds being made in unexpected locations and cyberbullying each other. It’s unclear to me why someone felt the need to revive it, particularly under the same name and feature set
> 50% of incoming first-year students report “mental and emotional exhaustion”: I suspect this is true for all sorts of cohorts in all walks of life. It is sad and stark to see it on a page
Instructure announces Q2 earnings: ~95% of the proceeds from Q2’s IPO went towards paying down debt from last year’s leveraged buyout by Thoma Bravo (TB). This is not an “exit” by TB, who still own the majority of the company
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I work hard to stay neutral here, but it’s important to me that you all know my potential biases!
Caveat emptor, but this does seem to hold up across the major salary websites (Indeed, Glassdoor, and Ziprecruiter)