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EdTech Thoughts 4/3 - 4/9
Elite schools should take more brand risk
Last year, in the weeks surrounding GSV, EdTech companies announced ~$300M of venture funding. Objectively, that is a lot of funding. But it was just 1/3 of the almost $1B of funding announced in 2021.
It is a different market this year, but I still expect a number of announcements over the next 2 weeks. To brush up on all the funding and M&A that has already happened this year as well as get a picture of how the public edtech companies are doing, I encourage you to subscribe to the paid version of this newsletter
If you’ll be at GSV, let me know! On to the news.
Funding / M&A
Cometa raises $5M: Mexico City-based Cometa provides a platform for schools in Mexico to collect and track tuition. The funding from this round will be used to expand the company’s presence in Mexico and continue developing their platform.
Humani raises $2.2M: Copenhagen-based Humani provides psychometric assessments to employers to help hire and develop their employees. Of note, Humani is the third European | startup this year to raise early-stage funding for an employer-focused assessments startup.
Greenworkx raises $750K: Greenworkx provides a platform that upskills workers for green jobs and helps employers find and hire said workers. It sounds like the company will take a similar approach to training and placement in the “green jobs” field as Multiverse has taken in the technology field. One of the founders worked at Multiverse prior to starting Greenworkx and Multiverse’s founder, Euan Blair, is an angel investor.1
Learneo acquires LanguageTool: Learneo, the artist formerly known as Course Hero, adds Potsdam, Germany-based LanguageTool to its growing portfolio of EdTech entities. No word yet on whether Course Villain will make a counter-move.2
Note: There is a persistent rumor about Byju’s | fundraising. It is hard to know what to believe about the round, round size, or valuation. I do believe that many of their equity holders will have marked down their investments and that any “flat valuation” funding round will have significant investor protections that go unannounced. On the positive side, the company did finally hire a new, experienced senior leader to help them navigate troubled financial waters.3
Looking for a full list of companies that have raised venture funding this year? Upgrade to paid for access to the EdTech Funding and M&A database
Elite schools should take more brand risk
In the past, I have argued that the argument for dramatically expanding the undergraduate student population at elite schools is silly and will never happen. I stand by that argument.
The business model of elite schools is not driven by the education of students - Top 10 schools routinely lose $10K+ per student per year.4 It is driven by all the other stuff (graduate programs, academic research, hospitals, alumni donations, etc.) that happens around the education of undergrad students. There just isn't much to be gained from expanding their student populations beyond a certain size.
Instead of advocating for increasing the size of student bodies, I think the conversation should focus on pushing schools to make a bigger impact with the students they do serve.
I saw an example of what this could look like this week at Columbia’s event for Justice Through Code. Justice Through Code is a Columbia-owned-and-operated technical bootcamp + mentorship program for formerly incarcerated individuals. The program is relatively small and confers a certificate, not a degree. But, it places students at top-tier companies like AWS, Zoom, Disney, Oracle, and Capital One.
Unfortunately, there is a very real stigma against formerly incarcerated people trying to get and stay in the workforce. And there are very few organizations with the brand credibility to meet this problem in an immediately impactful way. Columbia and its elite-institution peers are some of them. I’d love to see more schools stake their brand on programs with impact, like Justice Through Code.
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2U is shouldering responsibility for nearly every organization that does business with US universities with this lawsuit. It was a little surprising to me that no other organizations joined the suit or even voiced public support. At the very least, my hope is that the suit brings more information to light on the decision-making that went into February’s Dear Colleague Letter.
I also hope it leads to more public discussion of how ED could better regulate the space. John Katzman put forward the first relatively in-depth public proposal I’ve seen on this subject and I hope to see more over the coming months.
One of the more entertaining experiential learning projects I’ve read about - a Chapman University instructor (and Taco Bell comms exec) told his class that he would cancel the term’s final exam if one of them made a TikTok that got 1M+ views. Reading the slide before the instructor started his voiceover, a student proceeded to film him challenging them, panned to her seatmate making a funny face, and posted to TikTok asking for hearts. Less than 24 hours later, the final was canceled.
The Age of Average and the real problem with GPT
Have you ever noticed an Airbnb Aesthetic? Or a Millenial Coffeeshop? The 5+1 apartment building? That modern cars all kinda look the same and every DTC brand uses the same font?
My greatest concern with AI/GPT/etc. is not that students will use it, but that students will use it and all get the same answer. That answer will be objectively right - just as extensive wind tunnel testing found the most aerodynamically-optimal car design. But something will be missing. It becomes incumbent upon us to push the boundaries with tools like GPT, not just accept average.
Question of the Week
Note: votes are anonymous
Results of last week’s poll: Funding announcements tend to have a ~3 month lag time, so it is hard to track this in real time, but the results do seem to match the public discourse. I think it underrates the Private Equity and BigCo appetite for language learning though.
Ed Tech Thoughts is a short ( ~ 5 mins), weekly overview of the top stories in EdTech, with a few (hopefully interesting) gut reactions attached. If you enjoyed this edition, I hope you will subscribe and/or forward to your friends!
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I give Euan a lot of credit for supporting a former employee in this manner. To me, it reflects a culture of professional development that goes beyond the norm.
Each of the companies in this portfolio, including Course Hero itself, continues to operate under their own brand. Course Hero’s CEO runs Learneo concurrently with his Course Hero responsibilities.
I noted that this was likely to happen in the footnote of October’s $250M funding round announcement
Unfortunately, I have not found a canonical source for this data, but I do feel reasonably confident that it is true. At my alma mater, Amherst College, the full price of tuition, room, and board for students is $80,250. The total cost to Amherst for that student is $113K. This means the school loses $30K per student per year for every full-pay student (a population that is now less than 40% of the student body). My guess is that $10K/student/year is actually too conservative an estimate.