EdTech Thoughts Weekly Update 5/8 - 5/14
Blink and you'll miss it
Hello!
I hope that many of you enjoyed Friday’s Weekend Reading. As a reminder, Weekend Reading provides links to many of the top stories in EdTech.
This note, the Weekly Update, is for paid subscribers and provides commentary and analysis of what is happening in the EdTech ecosystem. It breaks down why certain companies are being funded and political/strategic moves are being made.
To help illustrate the difference between the two:
With that, on to the news!
A note to paid subscribers: Since we are now below the paywall, I want to share two pieces of advice I’ve been given with regard to growing this newsletter business:
Sell harder: customers don’t magically appear, you have to tell them about the value you’re bringing. And make it easier for your supporters to encourage their friends to subscribe : )
Write more / Take stronger stances: spend more time researching and building long-form positions on topics. Occasionally separate these out from the weekly update so that they are easier to consume.
I’ll admit that both of these make me uncomfortable. But the advice has come, repeatedly, from people I respect. So I’m working on them. I hope that you all will help hold me accountable for improving and won’t mind too much as I experiment within the free and paid products.
Funding / M&A
EdFlex raises $13M: Paris-based EdFlex provides a catalog of learning content for on-demand training. This is a highly competitive market in the US, but EdFlex appears to have found the right combination of go-to-market strength and market demand to build up their business in Europe. This deal is also interesting in the context of Guild’s Career Accelerator product expansion. While Guild chose to build their Career Accelerator internally, I expect many mature companies to expand their product suites and geographic reach through acquisitions of companies like EdFlex in the coming months.1
BeeReaders raises $3.5M: Austin-based BeeReaders helps students learn to read Spanish. The company does not yet have any publicly available efficacy resources, but does sit at the strategically-compelling intersection of literacy and language learning. BeeReaders is also devoting significant resources to go-to-market efforts in Latin America; a geography that is getting explicit attention from many of the EdTech-specialist VC funds (though none contributed to this funding round).
Young Heroes raises $400K: Amsterdam-based Young Heroes provides professional development and facilitated mentorship to young professionals in the Netherlands. After seeing over $300M invested in Mentoring companies last year, the market has been much quieter this year.2 In Young Heroes' favor, they are the first European company that I’ve tracked with an explicit focus on mentoring.
Go1 acquires Blinkist: Brisbane-based Go1 provides a catalog of training and professional development videos to enterprise clients. Berlin-based Blinkist provides text and audio summaries of well-known books. Acquiring a consumer content company focused mostly on the leisure market is a bit of an odd move for the enterprise-focused Go1, but it does continue | to build Go1’s presence in the European market. It is also possible that Go1 valued Blinkist for the company’s technical expertise in the automated generation of short-form learning content as more Go1 and its stakeholders work to incorporate generative AI into their training courses.
HMH acquires Classcraft: Montreal-based Classcraft provides educational games to K12 students in the US and Canada. Classcraft is HMH’s second acquisition since Veritas Capital bought out the company last spring - joining NWEA. It would not surprise me to see HMH add several more companies to its portfolio over the next 12-24 months.
HireVue acquires Modern Hire: Salt Lake City-based HireVue quietly grew into one of the larger digital hiring infrastructure providers over the past 10 years, providing (among other things) a video interviewing platform before Zoom reached mass adoption. One of the notable features of Modern Hire, a startup in the same general market as HireVue, is a Virtual Job Tryout that assesses job applicants based on role-specific competencies.
Note: Byju’s appears to have raised $250M in debt, but the company has not made its own announcement yet. Given the turmoil surrounding Byju’s, I’d like to wait until more details emerge before committing to any analysis of the deal.
Looking for a full list of companies that have raised venture funding this year? Founding Members also receive access to the EdTech Funding and M&A database
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
Links
Most-clicked link from Weekend Reading: Microsoft employees “hooked” on highly-produced corporate training videos
This reminds me of the funny safety videos that airlines started making to get passengers to pay attention. I’m not convinced this is a particularly high-ROI activity that will scale beyond the big tech companies, but it is a fun concept.
Arnold Ventures’ influence beyond regulation
If you only click and read one article this week, make it this one. Industry analyst Phil Hill set out to find who the major supporters of OPM legislation have been and found that one billionaire-led philanthropic organization - Arnold Ventures (AV) - came up over and over again.
I think there is more to this story. What I haven’t been able to grok yet is what led AV to focus on such a specific issue. The organization is quite multifaceted and supports other issues - such as criminal justice reform - that have stronger bi-partisan support. OPM regulation has never had the same public or private cachet that for-profit universities had, which makes it sort of an odd fit for use as a political chip.
I find it sort of alarming how quick we are to use “war” to describe curriculum choices. Even if there is a right answer here - and, fortunately, it does seem like there is a positive trend towards using research to inform the discussion - it takes what should be a nuanced discussion and polarizes it.
Impending | budget crunch | at ED
I don’t understand why ED and the IRS, two of the only government organizations that bring in money, are chronically understaffed. I’m told this is not a great way to run a business, and I think it applies to running a country as well.
There are legitimate issues to be debated at ED. I can understand requirements like “funding cannot be put towards implementation of [new Policy X]” even if I would prefer [Policy X] were funded.3 But this budget crunch will impact student loan collections, a basic function of ED. Lack of funding pushed 4 student loan servicers to exit the market and has now pushed the few student loan servicers that are left to cut at least 1000 support jobs just months before millions of students have to start paying back their loans.
A growing corps of “capital campuses”
I said this a couple weeks ago, but I think it’s worth saying again: it feels like education is going to be a defining issue of the 2024 election cycle. And, potentially, beyond that.
Universities are increasingly at the center of this discussion. In Florida, Governor Ron DeSantis is re-shaping what was the state’s top-performing public institution into something he believes will resemble the private, conservative Hillsdale College.
While there are a lot of reasons to build a satellite campus in DC, staying close to - and, where possible, shaping - the political narrative around education feels like it is rapidly rising up the list.
Sports gambling on college campuses
~2 years ago I wrote about “College football - brought to you by weed, booze, and gambling.” I wasn’t sure what the repercussions of introducing legalized gambling to the sports scene would be.
What’s notable about gambling in college sports vs. professional sports is that - outside of the top ~50 football and basketball programs - neither the coaches nor the athletes are paid particularly well. I suspect this makes them particularly prone to point-shaving schemes like the Alabama baseball coach was involved in. This makes me think we may only be seeing the tip of the iceberg of the changes happening across the sports ecosystem.
AI chatbots help students learn nothing faster
One of the lessons many parents learned from COVID is that school is not about learning fractions, phonics, and/or US History, it is about developing a child.4 This essay illustrates how quickly we seem to have forgotten this lesson amidst the chatbot hype.
The only nitpick I have with the essay is that I think chatbots can play a potentially-critical role in the classroom supporting repetition and failure. They are endlessly patient in a way that even the best teachers don’t have time to be. I agree with the author that this is not a panacea, but do think it will afford teachers more time to focus on the “large units” of development rather than individually un-sticking students from the “small units” of topics like fractions.
Question of the week
I’m going to experiment with moving the Question of the Week section to the free newsletter so that I can draw from a larger audience sample. I may try to bring this section back in some form as the number of paid subscribers grows.
Results of last week’s question:
Tweet of the week
As a possible replacement for Question of the Week:
A commenter pointed out that an astonishing 25% of the student population in Finland scored in the top quartile. Sadly, I’m not sure any amount of American stick-to-it-iveness will be able to top that.5
Disclosure - September 2022
Hello! I try to remain as neutral as possible when writing this newsletter, but some bias is inevitable when there is overlap with an area I care about. After all, I work for companies and invest in t…
I suspect that Guild’s Career Accelerator is leveraging multiple external content partners, but the point I’m making is about M&A moves, not commercial partnerships.
I used data from the Funding + M&A database to get this number. To re-create this dataset, you can use the “Company Type” pivot table.
This is not a thinly veiled reference, I’m trying to generalize this concept away from the current policy debates at ED.
To an unfortunately large number of parents, the lesson learned was actually that schools provide childcare, but we’ll save that conversation for another day and focus on the intellectual point.
If you’ve made it this far, I’m desperately hoping that you’re in on the joke : )