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EdTech News Roundup - Week of 8/9
The gang goes to GSV
GSV was a lot of fun - please encourage your family/friends/etc. to get/stay vaccinated/wear masks where appropriate so we can do it again next year.
On to the news!
Funding / M&A / IPOs
Singapore-based OPM, Eruditus, raises $650M on $3.2B valuation: Eruditus partners with elite US universities to deliver short courses to students. Sound familiar? Eruditus operates mostly in Southeast Asia and India, but shares many US university partners with their US-based competitors. I’m still thinking through how they fit into the “platform wars” (see below), where international is a growth driver
Bangalore-based UpGrad raises $185M on $1.2B valuation: Upgrad falls into a similar category as Eruditus, but with a more international spread of university partners. Softbank’s Vision Fund 2 is an investor in both of them
Product School raises $25M from Leeds: The bootcamp space is finally expanding beyond software development. In addition to offerings from well-funded existing providers like Thinkful, General Assembly, and Trilogy, product-focused Reforge raised $20M+ and OnDeck raised $20M. Bootstrapped since 2014, it makes sense that Product School decided they needed more capital to stay competitive
Noodle announced a new short courses platform, akin to the short courses Coursera offers and what 2U will offer when the edX acquisition closes. Noodle’s main points of differentiation are that they require a lower revenue share from partners, and that they emphasize targeting partner university alumni.
Coursera announced their own revenue share reduction hours (seconds?) later.1
Big news often comes out during GSV, but this was a pretty cool sequence of events! There are two angles I’m thinking about right now:
The dogfight for more users: after writing about platform strategy last week, I started thinking about historical comparisons to what is going on in online education. The best I’ve come up with thus far are Rideshare in the 2010s and Search in the early 2000s.2 In both cases, it wasn’t the best product that won (*ducks*), but the most efficient flywheel of user acquisition —> product —> monetization —> user acquisition. I expect a similar story to play out here
What are the other “Big Ed” companies going to do?: Noodle’s announcement included a partnership with D2L, one of the big LMS providers. In their last earnings call, Coursera highlighted an “LMS content ingestion solution” that sounds awfully like an LMS competitor. I’m curious to see how the other LMS’, publishers, tutoring companies, and other legacy education providers reshape their roles to keep/improve their spots in the value chain
This chart, highlighting voluntary vs. involuntary “separations” is pretty neat, especially when considering the 10M+ open jobs available during the same time period.3
How is this impacting the labor market? On Highway 95, just north of Philly, I saw two(!) billboards advertising $10K sign-on bonuses for HVAC workers and auto mechanics.
There is a universal debt problem among millennial and younger college graduates, but the pain is particularly acute for Black graduates. Per WSJ,
The median net worth of households with Black college graduates in their 30s has plunged over the past three decades to less than one-tenth the net worth of their white counterparts.
I am not in the camp of “let’s completely rid ourselves of the post-secondary degrees”, but I’m glad to see folks at the Wall Street Journal and the Chronicle of Higher Education diving into the data and proving that degrees are not a panacea for individual economic opportunity.4
I don’t have a perfect answer to this issue, but am reading about it, calling attention to it where I can, and would love to work with folks attempting to solve it.
Chegg Q2 earnings: though quieter thus far in 2021, Chegg continues to beat on earnings and are sitting on almost $2B of cash/short-term investments…
More details on tenure-track teaching positions at WPI: 15 new tenure-track roles each year for the next 3 years!
Thing(s) I’m thinking about
One piece of advice I give to many college students is “start a business” - it doesn’t matter if it’s painting houses, mowing lawns, or selling t-shirts, just find a way to do it.
Student-led investment funds sounds like a pretty good happy-medium of actively participating in a business with guardrails collaboratively set by the host school/organization.
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I work hard to stay neutral here, but it’s important to me that you all know my potential biases!
Noodle’s announcement hit my inbox at 3:16AM; the earliest mention I can find of Coursera’s is at 9:13AM, via Edsurge. Inside Higher Ed, who broke the Noodle news, wrote that they couldn’t get quotes from 2U or Coursera due to embargo, so it is unlikely either announcement was spurred by the other
You could also think about the video streaming wars (Netflix, HBO, Hulu, etc.), but that space is still in its early days, making it hard to draw conclusions
One nitpick: I wish they had made the left axis in increments of 10 instead of 20 so that the 50% mark could be highlighted. That line feels like an important demarcator in the labor market, signifying whether employers or workers are holding more sway