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EdTech Thoughts 6/13 - 6/19
I hope you all took time yesterday or are taking time today to celebrate and reflect on Juneteenth. It can be as simple as finding a black-owned business near you to support, just take at least one step in a positive direction.
Programming note: I’m planning to publish next week and then will be off July 4th week. I’m going to be on honeymoon through most of July, so updates will be shorter (and I may take an additional week or two off). Normal content will resume again July 31.
On to the news!
Funding / M&A / IPOs
UpGrad raises $225M: UpGrad is a Mumbai, India based test prep provider. While the company has been rapidly expanding to other verticals, it receives most of its revenue from graduate-level exams. Of note, Educational Testing Service (ETS), the non-profit administrator of the TOEFL and GRE (among other tests), participated in the round. I am intrigued by the strategy of looking for complements between the (arguably) rival forces of testing and test prep, rather than creating another Course Hero vs. Course Villain scenario
CoachHub raises $200M: Another week, another coaching platform raising the fundraising bar. This time it is corporate-focused CoachHub, which facilitates 1:1 matches between coaches and employees of all levels. This round will be used to expand CoachHub’s business in Asia, an area of strong growth for the company
TestGorilla raises $70M: TestGorilla helps companies replace resume screens with relevant assessments. Instead of building assessments in-house, which can be fairly expensive, TestGorilla crowdsources their assessments from subject-matter experts by offering revenue-sharing agreements for assessments used on their platform. In two years of operations, the company has amassed 5300 clients and 220+ assessments
Elevate K12 raises $40M: Elevate K12 provides live-streamed instructors for K12 classrooms across the US. This is a fascinating potential solution to the K12 teacher shortage, though I wish the company had shared more information about both their business and the efficacy of remotely teaching a class where students are physically present
Transfr VR raises $35M: Transfr provides exposure and on-the-job training for careers via VR. They are one of several companies I missed in my VR overview a few weeks ago! The company currently serves 10K+ users across 300+ organizations
Prenda raises $20M: Prenda provides the platform and curriculum supporting 300+ microschools and 3,000+ students (each school has between 5 and 10 students) across the US. Prenda is a full substitute to public schools for students; able to receive funding from public sources and providing an accredited teacher to oversee student progress (though the physical locations may only be staffed by a non-accredited “guide”). The company currently serves K-8 students, but will contemplate product expansion as part of their use-of-funds for this round
Velocity Career Labs raises $6.5M: Velocity Career Labs (VCL) joins a growing cohort of startups attempting to put education credentials on a blockchain. In premise, this is a compelling use case for blockchain technology - no more schools holding credentials hostage due to unpaid parking tickets or centralized entities controlling transcripts. In practice, participation in the Velocity Network (VCL’s homebrew blockchain network), whose core revenue strategy is dependent on being the sole arbiter of “verified” entities on the network and issuer of the “credits” the allow the network’s marketplace to transact, is not that different from being on the Parchment platform
Metacrafters raises $4.5M: Metacrafters is another Web3 / blockchain-focused startup, spun out from Proof of Learn’s startup studio. Metacrafters uses grants from a variety of Web3 entities (including both blockchain foundations and more general Web3 companies) to train people for technical Web3 roles
LearnLaunch’s new cohort: LearnLaunch, one of the top EdTech accelerators, is focusing on Workforce with their latest cohort of early-stage startups, which includes Automation Workz, Career Dash, Empathetics, Julius Education, and Rob Wunderkind
What’s going on with today’s market?
For the past few weeks, the stock market has been in and out of bear market territory. I’m not a stock prognosticator and have no desire to give advice on the broader market beyond that it seems unlikely that we’ll have a quick rebound like in 2020.
I do want to talk about the strategies that companies, particularly venture-backed startups, think about during periods of uncertainty / downturns. Specifically, you will likely read about companies taking one or more of the following three actions over the coming weeks/months:
Cutting expenses: for knowledge worker driven companies like technology startups, this usually means layoffs. Companies with a significant physical presence may also shut down some/all locations
Planning for profitability: usually with an emphasis on prioritizing “core” businesses rather than “growth” businesses. This could also mean spending more on Sales & Marketing rather than Product
Raising money: raising a large amount of capital relative to what has previously been raised without a commensurate increase in valuation. Many companies will raise “down rounds”, where the funding comes at a valuation that is actually below previous funding rounds
Taking any/all of these actions is not necessarily reflective of a company being run well or poorly. A well-run company may still cut expenses. Nor are they mutually exclusive. A profitable company may still cut expenses and/or raise money.
The past two weeks, I’ve used the jargon-y term “defensive” to describe companies employing these strategies. With limited access to information, it is a mixture of art and science predicting the drivers of a given funding round. However, given the market moment we are in, it is safe to assume that the above strategies are at least being discussed by the leaders of almost every growth and late-stage company you read about in the funding news.
For more thoughts on the downturn, I encourage you to read through VC fund Sequoia Capital’s presentation deck on the topic.
Ohio beefs up school security, including training process for arming teachers: Ohio will invest $100M in K12 school security (+$5M for HED), including a training program for schools that want to arm their employees. To rinse the taste of this out of your mouth, I encourage you to read Isabelle Hau’s Edsurge piece on “softening, not hardening” schools. Isabelle writes, and has the data to back up, that bringing more love to our schools and communities might be more impactful than arming everyone to the teeth
Coursera global skills report: This report describes the courses that Coursera users self-selected into over the past year, providing a neat picture of course demand by country and region. Contrary to coverage | of it (including Coursera’s own press release), it does not provide is a picture of actual workforce competencies and whether or not they are declining
Arkansas’ Online University Roller Coaster: Lots of great nuggets in this overview of Arkansas’ transition from “Build” to “Buy” in public online higher ed. In addition to several great quotes from Evangeline Tsibris Cummings, University of Florida’s online leader, Inside Higher Ed posits, in a possibly freudian slip, that University of Phoenix is soon to join the ranks of for-profit universities who sell to a public university system
Byju’s fishiness: Byju’s auditor, Deloitte, is apparently refusing to sign off on the company’s 2021 financial statements. To be 100% clear, I have no inside information on Byju’s, but this is red flag #3 that I have read about - following reports of predatory loan practices and that their eponymous CEO financed at least half of their last funding round himself
Daycare and wages: Community college administrator and Inside Higher Ed blogger Matt Reed calls out the ethical quandary community colleges face by offering early-childhood education programs. Because early-childhood educators are paid so poorly, community colleges know that students in early-childhood programs will not be able to pay back their tuition and live sustainable lives. Meanwhile, parents are demanding both increased qualifications and flexibility from their childcare providers
Mitch Daniels leaves Purdue: Called, by at least one person, the Nation’s best college president, Mitch Daniels leaves having made a stamp on Higher Ed. As president of Purdue University, Daniels will likely be best remembered for keeping tuition flat for 11 straight years, championing ISAs, purchasing Kaplan’s Online University, and being early to bring students back to campus during the pandemic
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!
If I missed something, or there is a topic you’d like to learn more about, I encourage you to submit a story! Submissions can be named or anonymous