ETCH Weekend Reading 2/25/24
You've gotta have taste
Hello!
I’ve been on a space kick recently. It started this Fall, watching For All Mankind while washing baby bottle parts late at night. It continued over the holidays, when a family member gifted me The Apollo Murders. And it came to a head this week, when the first commercial spacecraft landed on the moon.
The job of sifting through the week’s news is sometimes bleak. It is often easier to find the flaws of new technologies than to predict their impact. It is also, arguably, better for business to highlight negative stories than positive ones - company layoff articles in the People Moves section are routinely my most clicked links.
All the same, sometimes I like swimming against the tide. I like having a sense of wonder in my life, even while acknowledging some of the grim challenges we face in the modern world.
I encourage you to think about where your sense of wonder is right now. It doesn’t have to be in space - it could even be in education! With spring just around the corner, now feels like a good time to tap into it.
With that, onto the news!
Funding / M&A
Upward raises $21M / US, Early Childcare Software Infrastructure / Alpha Edison, M13, Fika Ventures,
Loora raises $12M / Israel, Language Learning / QP Ventures, Hearst Ventures, Emerge, Two Lanterns Venture Partners
Stepful raises $12M / US, Training Provider / AlleyCorp Impact, SemperVirens, Reach Capital, Y Combinator, Company Ventures, Green Sands Equity, 01 Advisors
Mia Share raises $6.5M / US, Software Infrastructure / TTV Capital
Ziplines Education raises $6.4M / US, Content Provider / Jackson Square Ventures, Wildcat Venture Partners, WGU Labs
MeVitae raises $1.8M / UK, Recruitment Software / Apex Black
Podium Education acquires Untapped / US, Content Provider (Talent Marketplace)
Unleashed Brands acquires Sylvan Learning / US, Extracurricular Activities
NBME acquires MedVR / US, Training Provider (VR)
CentralReach acquires SILAS / US, Special Education
To be a verified funding in this newsletter, a company must raise $1M+ from named institutional investors, be part of an acquisition where the combined entity has > 50 employees, or raise a VC/PE fund of $10M+.
Other Fundings
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People Moves
Erin Mayhood promoted to CEO of Mentor Collective / via PR Newswire
Huw Williams joins Avantis Education as CEO / via Installation
Former Noodle CSO Lee Bradshaw launches Rhodes Advisors / via Inside Higher Ed
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Links
Early Childhood
Private equity has its eyes on the childcare industry, allegedly awaiting new inflows of government spending. While I think this headline is true and bears watching, I don’t like the assumptions the article uses to drive this narrative. The 4 major brands that the article highlights - KinderCare, Learning Care Group, Goddard School, and Primrose Academy - all target the high-end and corporate-sponsored segments of the early-childcare market (as does Bright Horizons, which is publicly traded, not PE-backed). These segments are the *least* likely to receive benefits from new government spending in the sector, which is almost uniformly targeted at lower-income families. / via The Atlantic
K12
As some of you may have deduced from past links, I’m starting to build out a framework for understanding the education component of the 2024 US election cycle. I’m confident it will include partisan discussions of school funding/education savings accounts, student loan forgiveness, and the new FAFSA rollout. I’m less certain of where the discussion will go with regard to charter schools, who are adjacent to the funding discussion. Some fodder for thinking about this:
When science class is in a former Macy’s. / via New York Times
Will Democrats ever embrace charter schools again? / via Bloomberg Opinion
Also apropos of election season, federal pandemic funds should not disappear just when we need them most / via Hechinger Report
Higher Ed
A recurring | question asked in this newsletter is: What is a modern university? The question sounds simple but takes a while to unravel.
In today’s example, Duke shuts down huge plant collection, causing scientific uproar. Should a university house a large plant collection? Is it “shameful” to shut down a 100-year-old collection? If Duke is the wrong keeper of the plants, who takes over as Johnny Appleseed? / via New York Times
Related, is running a top university America’s hardest job? / via The Economist
And in Europe, “Professor Lee saw locally focused universities of applied sciences – alongside strong vocational education and institutions that diffuse innovation into the average firm – as a key part of the equation. Such universities are ‘not necessarily [doing] world-leading blue-sky research’, he said, but do help make firms highly innovative via ‘marginal incremental improvements by applying other existing technologies…to their own production processes’, with that local role for universities ‘often crucial in terms of creating good jobs.’” / via Times Higher Education
From the private side, Noodle is also working on this definition. Other OPMs, including 2U, Coursera, and Academic Partnership, are working on this too, but Noodle probably has the most wiggle room to make changes right now. / via Inside Higher Ed
Also, what are ghost students? A very real cost being added to already-strained college admissions departments - fake applicants who scam schools for financial aid dollars and other resources. These “ghost students” were reported to represent 20% of all applications to California community colleges last year. / via EdTech Magazine
Workforce
Are games the secret to better company training? Yes! / via Wall Street Journal
Half of college grads are working in jobs that don’t use their degrees. Lots of concepts to pick from in this article, but the one that struck me was “Thanks to the way online hiring algorithms scan applicants’ work histories, the next role that person is now most likely to be considered for is a store manager position, while a break with a corporate marketing department is even less likely.” / via Wall Street Journal
Which matters because employers don’t practice what they preach on skills-based hiring (different article about the same underlying Burning Glass report). These two points illustrate how easy it is for someone to get left behind if they don’t make the “right” choices as a young person, even with all the technology we have at our disposal. / via Higher Ed Dive
EdTech
The EdTech Icarus: Byju’s Crashes and Burns. A great summary from the EdTech Insiders folks (I helped a little, but they deserve the lion’s share of the credit for this one) on the Byju’s saga. My only hope here is that we can close the chapter on Byju’s decline soon. / via
Of course, that hope did not come true this week…After the company announced a “fully subscribed” $200M rights issue, shareholders representing 60% ownership of the company voted to oust the company’s eponymous founder. / via Techcrunch
To clarify, the shareholder vote does not necessarily compel Byju to step down, though it certainly doesn’t help him stay in place.
Additionally, I want to highlight how quintessentially Byju’s the “fully subscribed” funding announcement was. It requires a certain suspension of disbelief to square how a “fully subscribed” round still has room for equity owners of 10%+ of the company to participate.1 What was the plan? To give their old major shareholders token equity for token participation? Or to bait-and-switch 10%+ of the company from their new major shareholders so their old shareholders could keep their pro rata?
Unrelated, what I love about writing consistently is that it encourages you to think about ideas as a living organism rather than something that is set in stone. Less than a month ago, I took this author to task for their jaded perspective on AI, “Arizona State announces plan to give up on education.” Now, I find myself easily nodding in agreement to their new perspective, you’ve gotta have taste. Which highlights the importance - and ambiguity - that tastemaking will play (already plays?) in a world filled with “generated” content. / via Inside Higher Ed
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!
Xeet of the Week
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 things I am excited about! Here is a full list of my employment history and investments:
Prosus, which is a public company, owned 9-10% of Byju’s as of last year and was reported to not have participated in this rights issue. Ownership percentages for other shareholders are hard to come by, but I would not be surprised if the ownership stake that chose not to participate in this rights issue is closer to 20-30%. Possibly even higher.
Always a great read!
Thanks for the link to John Warner re taste and discernment!