ETCH Weekend Reading 1/28/24
ETCH Weekend Reading 1/28/24
Two words: "Channel Partnerships"
Hello!
2 quick announcements this week:
I’ll be in DC this Thursday and Friday (2/1 and 2/2)! Send me a note if you’re around for an early happy hour Thursday or want to grab coffee during the day Friday.
We are entering the best time of year for early-stage entrepreneurs, with lots of opportunities for non-dilutive funding and exposure. This week, applications opened for 2 of my favorites!
Penn Milken Business Plan Competition: the longest-running EdTech competition I am aware of comes with a cash prize, exposure, and a support team at Penn GSE that I could not recommend more highly.
SXSWedu Shark Tank: Another long-running EdTech competition, hosted by Goldie Blumenstyk, whose has spent the past decade educating me about the education industry through her own newsletter, The Edge.
With that, on to the news!
Funding / M&A
Elice raises $14.9M / Korea, LMS / Vertex Holdings
Beedeez raises €8M / France, Upskilling platform / Arkea Capital, Swen Capital Partners
Redrob raises $4M / South Korea, Recruitment Platform (Assessment) / Murex Partners, DS & Partners
UpSmith raises $3.3M / US, Recruitment Platform (Bootcamp) / A16Z, Asymmetric Capital, GSV, Accel
Roper Technologies to acquire Procare for $1.75B / US, Childcare Platform
PowerSchool acquires Allovue / US, LMS (ERP)
Follett acquires Livingtree / US, Publisher (K12 Infrastructure)
Elentra acquires Skyfactor Benchworks / US, LMS (ERP)
Intelvio acquires Classward / US, Training Provider
Non-profits
To be named in this newsletter, a company must raise $1M+ with verifiable institutional investors, be part of an acquisition where the combined entity has > 50 employees, or raise a VC/PE fund of $10M+
ETCH Funding Database
All of the above deals, and 1,000+ more can be found in the ETCH Funding Database, available in Beta to Paying subscribers. Upgrade your subscription to learn more.
People Moves
Anthony Rotoli joins Ocelot as CEO / via Higher Ed Dive
Sanjay Parmar joins Degreed as CTO. Nicole Williams and Nate Kimmons promoted to COO and CRO, respectively / via businesswire
Arpit Jain and Arvind Singhal join LEAD as CFO and CGO, respectively / via Startup Story
Rohan Chandran joins Guild as CPTO / via Guild
Looking for a job or hiring in EdTech? Join the ETCH Jobs Community and/or subscribe to our Jobs of the Week (JOTW) newsletter!
Links
Early Childhood
New bill proposes tax credit for soaring childcare costs. The bill specifically targets working parents paying for additional childcare, separate from the standard child tax credit. It is not yet clear (to me, at least) how much support this bill has beyond its 3 sponsors. / via Philadelphia Inquirer
K12
Pressure to close schools is ramping up. Here’s what districts need to know. I started worrying about the financial pressure on the US public school system due to the pandemic and the post-pandemic wave of support for K12 alternatives 2 years ago. This concern is less ideologically driven than practical: What happens to a public school system built around high fixed costs when your financial base changes substantially? It seems we are starting to find out as ESSER funds dwindle. / via Education Week
Higher Ed
North Dakota University System suggests 3-year contracts for college presidents to help “lower their blood sugar a little bit.” They say the best jokes are the ones that start with a kernel of truth. / via North Dakota Monitor
Western Oregon University drops D and F grades. The easy response is to cry “grade inflation!” The more complex response is to see moves like this as the bridge step towards mastery and competency-based programs. / via Inside Higher Ed
Workforce
BetterUp and Degreed partner to provide Degreed customers with BetterUp coaching. In 1967, the future was “plastics.” In 2024 EdTech, prepare yourselves for a lot of “Channel Partnerships.” It’s easier than ever to integrate platforms and, with the highest cost of capital in ~two decades, more expensive than ever to build a salesforce. Companies with large client lists have a lot to gain from this trend. / via businesswire
Policy
It is an election year here in the US (and, it turns out, more than 70 other countries) and it seems education will be a top issue. This will lead to proposals from both sides of the aisle - see the democrat-led childcare tax credit bill link above and the Republican initiative to cut college costs (interesting that the effort is to cut costs rather than find value, but that is another story). / via Chronicle of Higher Education
It also means that the Education Department (ED) will be working hard to provide wins for President Biden’s re-election campaign…and being criticized for their efforts. This week alone we saw:
The good: a new National Education Technology Plan (NTEP), guided by data, with surprisingly specific and hard-to-argue-with goals. This is the first to NTEP since 2017. / via Chalkbeat
The meh: Biden cancels another $5B in student loan debt. The principle of cancelling student loan debt is admirable. And, in fairness, the administration can say they have relieved a lot of debt in spite of some substantial roadblocks. Unfortunately, the result has been a mishmash of different strategies with few outstanding wins - I follow this stuff for a living and I can’t tell you offhand how much debt has actually been relieved. / via US News
The ugly: Education Department says it will fix $1.8B FAFSA mistake. Mistakes like this were basically inevitable given the short timeline and number of stakeholders involved in fixing an archaic but critical component of the US post-secondary funding system. Regardless of what administration was in charge of delivering the new FAFSA. But this can, and will, be held against Biden and ED during this election cycle. / via NPR
Last August I asked if the Education Department was being asked to do too much. Unfortunately, I think the answer is yes. The result is that the important wins (like the NTEP update) are often getting crowded out by confusion (like the impact of student debt relief) and outright losses (the new FAFSA is really important! It is sad that its release will be marred by a calculating error).
Image of the Week
This image shows the decision quality of professional players of the board game GO from 1950 to 2021. I came across it in an essay from
aptly titled After AI beat them, professional Go players got better and more creative. (I leave it to you to guess what year AI started beating the world’s best Go players.)This image was particularly cathartic to see after reading an op-ed covering last week’s announcement that Arizona State University had partnered with OpenAI, “Arizona State announces a plan to give up on education.”
It baffles me that a volume discount on a basic software deal can be twisted into “giving up on education.” ASU doesn’t appear to have gotten any interesting usage concessions from OpenAI - the deal doesn’t even provide global access to GPT-4, students and faculty have to apply to use it!
Rigid anti-tech arguments like this op-ed make me want to scream into the void. They assume negative intent, usually based on the premise that the 1960s really were the peak decade for humanity.
I choose to believe that technology is good, actually. That when someone, or some piece of software, can meet or exceed one of your skills, it creates the environment for you to get better - as happened in the world of Go.
What’s important, then, is to make sure as many people as possible can access the environments that drive change. Instead of raging against the machines or forcing corporations to sign nebulous, unenforceable commitments and pledges, we should be focusing our time and money on recruiting AI talent for the public sector. We should be following Denmark’s lead in getting AI resources in the hands of as many students and researchers as possible. We should be chasing the holy grail chatbot, in a practical manner.
We should be seeking out our own personal Go scenarios, using AI to challenge our skills and our ways of thinking.
This email, ETCH Weekend Reading, is ETCH’s free newsletter providing links to the week’s EdTech Funding, M&A, People moves, and a curated list of Links to relevant industry news. If you enjoyed this edition, I hope you will subscribe and/or forward to your friends!
For more on AI + Go, I loved this documentary from a few years ago: https://youtu.be/WXuK6gekU1Y?si=6EpLboo9i0wUPgky
In his book, The Coming Wave, Mustafa Suleyman tells the story of the AI taking a strategy in Go that shocked all the viewers, that no human would ever try, and then of course the AI won. I'll check out the documentary.