EdTech Thoughts 5/9 - 5/15
Add Paris to your early-stage fundraising itinerary
Greetings from Santa Fe! I’ll be here for the next few weeks, please reach out if you’ll be in town.
Nothing else to report, on to the news!
Funding / M&A / IPOs
Note: lots of international investment news this week. It is both fun to see our ecosystem grow and stressful to keep up with it all!
Skillmatics raises $16M: Mumbai, India-based Skillmatics has moved 5M units of their educational games since being founded in 2017. They plan to use this round of funding to grow in the North American market
Manabie raises $12M: Singapore-based Manabie offers a full suite of school infrastructure technology, from LMS to ERP to Customer Acquisition Platform
Leland raises $4M: Leland raises this round in what is becoming one of the fast-moving categories of 2022 - coaching and mentoring. In addition to Mentor Collective’s $21M round earlier this year, PeopleGrove also announced a private equity investment this week (terms not disclosed)
Manara raises $3M: San Francisco-based Manara offers cohort-based courses for aspiring engineers in the Middle East and North Africa (MENA). Similar to other, US-focused bootcamps, Manara appears to use an Income-share Agreement (ISA). Somewhat surprisingly, this pre-seed funding round also includes a who’s who of Silicon Valley, including Stripe, Reid Hoffman, Paul Graham, Eric Ries, and the founder of Careem (MENA’s Uber-equivalent)
Educapital raises $100M+ for Fund II: The race to become Europe’s biggest EdTech fund is on! Paris-based Educapital is now in the lead, with a fund the Educapital team hopes to close at around $150M, similar in size to most of the leading US EdTech firms outside of Owl Ventures.
Story
How goes the Revolution?
We (royal “we”) spend a lot of time talking about the “unbundling” of universities. They are old, expensive, and full of things we don’t want. We are limited in the ways we can consumer from them. The people who run them are malevolent and crusty, refusing to adapt.
Surely an “unbundled” university would be much better?
Former Sky (kind of like Comcast in the UK) COO Mike Darcey watched a similar narrative play out in the cable industry. The short version is that it does often look pretty good to be the “unbundled” player like Netflix during periods of growth, but it gets ugly quickly when you are not growing fast enough or hit certain levels of maturity.
But the markets do this, a bit like an 8 year old child, they get fixated on new ideas to the exclusion of all else, but they can quickly lose interest and shamelessly execute a sharp handbrake turn. Woe betide those with no choice but to dance to their changing tune.
But, he highlights, the incumbents must also evolve:
Now, content groups who previously found all such talk incredibly tedious, can be heard discussing subscriber acquisition, customer engagement, churn, etc. They have to run around hiring tech teams, understanding CDNs, hiring teams for subscriber acquisition and churn prevention, data analysts, pricing and packaging people. They need a proper consumer facing brand, a customer management system, and they need to do some real marketing, not just a few arty tune-in promos.
That paragraph sounds awfully similar to the changes running through administrative and admissions departments! And like it might cause some strife when resources are reallocated according to all these…considerations.
As we know, there are two ways to make money in business - bundling and unbundling. While we may be in the “unbundling” phase of education, unbundling a university is not quite so simple.
But it is critical to pushing learning forward, and I will take any anecdotes I can get from other industries on how to progress.
Other Tabs
John Katzman quits tobacco…err Google AdWords: Last week, the US Government Accountability Office (GAO) released a report on Online Program Managers (OPMs). My 30,000-foot takeaway from the report was that the GAO said “we’re watching you” and not much else. This op-ed from John Katzman, CEO of the OPM Noodle, provides a great, nuanced take on where online higher ed might go from here. The situation is not quite so dire as when Don Draper quit tobacco, but does highlight the unsavory dependence of the whole industry on Google AdWords
The most exciting bond sale you’ll read about this week: I’ve been circling | around the under-discussed issue of K12 public school infrastructure, and the financing thereof, in the US. This bond sale by the University of Nebraska highlights $2T (yes, with a T) of deferred facilities maintenance in the US university system. Lest your response be “let private vendors manage this infrastructure!”, that is not working out so well either
How K12 districts are navigating the pandemic: A few anecdotes on the continued fallout from COVID in the K12 public system
Minerva hires enterprise-minded execs: The Minerva Project hired Geoff Watson and Betsy Tucci as President and General Counsel, respectively. It could be a coincidence, but I found it interesting that Geoff (Guild) and Betsy (InStride) both come from tuition-assistance players
Thoughts on Alternative Credentials: A thoughtful take from Michael Feldstein on the state of alternative credentials. The key sentence for me: “Alternative credentials will tend to grow and proliferate at human speed, not technology speed”
Section4 lays off ~25% of staff: As much as education is supposed to be counter-cyclical, I suspect that, sadly, we will see a few more of these articles over the coming months. I haven’t seen a talent list from Section4, but encourage you all to reach out to contacts there to make sure they are OK Update: this list contains the Section4 employees who have opted in to being contacted about new opportunities
Thing(s) I’m Thinking About
There is fairly significant momentum towards a college rankings model that strongly factors post-graduate earnings. We can quibble over how it is factored (immediate post-grad earnings, 10-year NPV, 40-year NPV, etc.), but ROI is, at the very least, a relevant statistic.
Of course, introducing a new, relevant statistic means creating the opportunity to game it.
That is NOT what is happening below - Steph Curry attended and played for Davidson for 3 years, taking them to the Elite 8 of the NCAA tournament in 2008 - but I do expect crazy stories to emerge as institutions pay more attention to this metric.
Ed Tech Thoughts is a short ( < 5 mins), weekly overview of the top stories in EdTech, with my gut reactions attached. If you enjoyed this edition, I hope you will subscribe and/or forward to your friends!
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