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EdTech Thoughts 4/17 - 4/23
Spring has sprung
Can you smell the AI in the air? It was thick at GSV’s annual EdTech conference in San Diego this week, though it did eventually burn off and lead to some fun conversations.
Rest assured, this newsletter will remain artisanally crafted and 100% organic until chatGPT can do it better. On to the news!
Funding / M&A
Cengage raises $500M: Boston-based Cengage is a PE-backed publisher whose traditional strength has been in supplying textbooks/courseware to the higher education market. The funding from this round will be used to make further investments in the company's new workforce initiatives (which I wrote about 2 months ago), albeit in an indirect way - the cash from this round will actually go towards paying down the company’s ~$3B in long-term debt and expected interest payments.1 Cengage did not disclose exactly how much money this investment will free up, but, presumably, it will allow a meaningful shift in the company’s spending from debt servicing to the workforce business.
Innovamat raises $21M: Barcelona-based Innovamat is attempting to put a proprietary and tech-enabled spin on math education. The company’s 2,000 school (representing 350,000 students) customer base uses the company’s platform and pedagogy to deliver an (self-reported) 11% increase in average scores on standardized tests. The funding from this round will be used to continue expanding the business, with an emphasis on breaking into the US market.
Santé Académie raises $12M: Lyon-based Santé Académie provides continuing education to hospital staff (nurses, nursing assistants, and doctors) in France. Rather than setting its sights on global domination, the company has, refreshingly, dedicated this round’s funding to winning 100% market share in its home market.
Accredify raises $7M: Singapore-based Accredify uses Ethereum to issue and verify digital documents, including the transcripts and degrees of many of Singapore’s major universities. I have been skeptical of US-based entrants to the blockchain-credentialing market as the transition to digital records has largely already happened here and the incumbents are generally good-enough. I am more curious about international solutions like Accredify, where there may be more opportunity to win market share.
MindPrint Learning raises $2M: I am an on-the-record proponent of funding efficacy-based solutions in education and Princeton-based MindPrint Learning is about as efficacy-based as it gets. The company has won two National Science Foundation grants to productize a cognitive screener developed at Penn (and leveraged by NASA to evaluate astronauts) for use in K12 schools. In addition to $2M in equity funding, MindPrint received an undisclosed amount of support from the Walton Family Foundation to continue studying their product’s impact.
Unmudl raises $1M: Austin-based Unmudl helps adults upskill through courses with partner colleges (these courses can be strung together into certificate and degree programs). Additionally, Unmudl connects the students on their platform with employers hiring for the skills they are studying.
Class Technologies acquires CoSo: South Plainfield-based CoSo provides technology services to corporate and government entities. DC-based Class Technologies provides virtual classroom services to K12 and Higher Ed customers around the world. It sounds like the company will now be making an effort to win customers in the Enterprise space as well. In a convenient-for-me coincidence, this news comes the same week as two of Class’ competitors, ClassIn and InSpace, made competitive moves. Tencent-backed ClassIn announced their US market entrance and InSpace announced a partnership with SNHU that also includes a minority investment.
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Most clicked link from last week: Coursera announces Hiring Solutions service
It is easy to get hand-wavy with the details of President Biden’s student loan plan, particularly its relationship to the active student loan schemes of the UK and Australia.2 JFF provides helpful commentary and a great, tactical visual of the similarities and differences between the 3 here.
One of the more wholesome aspects of EdTech community is that just about all of the EdTech-specialist financiers now track and publicly report the social impact their investments make on an annual basis.
The science of reading is not a “new” topic, but discussion of it seems to be picking up steam coming out of COVID and with the popularity of the Sold a Story podcast.
There are so many hidden components to educating a child well. In this case, illnesses derived from inhaling the fumes from old diesel buses forced kids to miss school days. This is sort of frustratingly obvious when you think about it, but remembering to think about it in the first place is the hard part.
I’ve been looking for content that tests my position regarding ED’s attempted new regulations regarding third-party servicers. This might provide an interesting analogy: In 1975, Congress passed a law that the average fuel efficiency of cars should average 27.5 miles per gallon by 1985. The exception to this rule, which, arguably, has kept average fuel economy below this threshold into today, is that trucks were excluded from this mandate. Instead, trucks (and, crucially, SUVs built on truck platforms) would be regulated by the Transportation Department.3
There are a lot of different ways to read this article. To me, the lesson is that a series of seemingly-small and probably-reasonable decisions can lead to unpredictable long-term outcomes if we never take the time to reset and re-establish principles. There is no easy answer to what TPS regulation *should* look like, but it feels like this year is about as opportune a moment as we’re going to get to take a long look at it.
Question of the Week
Results of last week’s poll:
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Cengage is not publicly traded, but does report quarterly and annual earnings, which is where I got the above numbers.