ETCH Weekend Reading 3/3/24
ETCH Weekend Reading 3/3/24
Crumbling public school infrastructure, $1B gift to Einstein College, Duolingo earnings, and Stack Overflow's deal with Google/Gemini
Hello!
No announcements from me this week, straight to the news!
Funding / M&A
Inkitt raises $37M / US, Content Provider / Khosla Ventures, NEA, Kleiner Perkins, Redalpine
MT Note: While Inkitt is not, strictly, an EdTech company, I expect companies like it to have a substantial impact on EdTech. See also notes on Klarna’s chatbot and Stack Overflow’s Google deal below
Interview Kickstart raises $10M / US, Training Provider / Blume Ventures
Heat Geek raises £4M / UK, Training Provider / Transition, Triple Point Ventures
NativeX raises $2.5M / Vietnam, Language Learning / Ansible Ventures, Blueprint Ventures, Northstar Ventures
Graide raises £1.6M / UK, Teacher Tools / XTX Ventures, Mercia Ventures, SFC Capital
MoonHub raises $1.4M / UK, VR / Unconventional Ventures, Pi Labs, Ada Ventures
Tokidos raises $1.35M CAD / Canada, Gamified Learning / Triptyq Capital, Investissement Québec, Boreal Ventures
Software Circle acquires ARC Technology for £2M / UK, Software Infrastructure
Workday acquires HiredScore / US, HR Infrastructure (Recruitment Software)
HMH acquires Writable / US, Content Provider
Launches HMH Labs
Deel acquires Zavvy / US (Germany), Talent Management Software
Wayside Publishing acquires Nualang / US, Language Learning
Erudifi acquires Doyobi / Singapore, Student Financing (Gamified Learning)
Leeds Equity Partners acquires TouchMath / US, Content Provider
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 Transactions
ETCH Funding Database
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People Moves
Robin Wadsworth promoted to CEO of Thought Industries / via PR Newswire
Dr. Ivory Toldson joins Concentric Education Solutions as Chief of Research / via K12 Dive
Chris Berry joins Zen Educate as CRO / via PRWeb
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Links
K12
The desolation of America’s urban schools. This article is heartbreaking, and reinforces a trend I have been following for more than 2 years. America’s public school infrastructure is crumbling, and there is no plan to fix it. / via The Nation
Related, there is a $2B school infrastructure bill making its way through the legislature in the state of Idaho. I’d love for states to prove my thesis wrong; we will see what this bill looks like if/when it gets passed. / via K12 Dive
Not really related, but at least showing thoughtfulness about the future of US K12 education, two 2024 trends pieces from Michael Horn and Robin Lake. / via
and 74 Million
NAEP scores were declining long before COVID. Alongside this general trend is a troubling “achievement gap,” which shows that score declines were worse among lower-performing students than higher-performing students. / via 74Million
Homeschooling appears to be on the rise in England (though the data is not particularly well-kept). / via Education Executive
Why one school district spent $1M fighting a special education student. Helping students with learning disabilities often requires more resources than the average student without a disability. Public schools have long vascillated between 2 strategies for serving these students, 1) paying for them to go to private school or 2) hiring paraprofessional staff directly to support them. Lawsuits like those mentioned in this article are disticts’ efforts to protect the precedent for whichever strategy they are focused on. / via Wall Street Journal
It stands to reason that software for this student population could reduce the cost to serve them while (hopefully) maintaining student outcomes. Anecdotally, I have noticed more PE and VC activity is this segment of the EdTech market, but do not yet have the data to call it a “trend.”
Related to district funding choices but not special education, Nevada uses AI to determine school funding. Is this the future or a cautionary tale? / via Education Week
Higher Ed
$1B donation will provide free tuition at Albert Einstein College of Medicine. This is awesome. Not every college/university can count on a $1B donation to change their financial trajectory, but this is also a reminder that the business of operating - and sustaining - a university is far more complex than “fixing” cost/tuition prices. / via New York Times
Additonally, not every college can rely on a $1B donation from former faculty member (as is the case with Einstein), but at least faculty are getting more involved in the business of universities? The rise of faculty budget activists. “Faculty are starting — certainly belatedly, and maybe too late, who knows — to understand that if we don’t also participate in budgetary issues, ultimately faculty governance is meaningless.” / via Chronicle of Higher Education
Related, these tenured professors thought their jobs were safe, they were wrong. To be clear, layoffs stink. But, also, it seems fair to say that the employees of an organization should have at least some sense/vested interest in the financial health of their employer. / via Chronicle of Higher Education
(One more tab down the rabbit hole, then I’ll stop.) A group of instructors who are less worried about their jobs? The faculty at the University of Florida, who former senator Ben Sasse has won over with moderation and money. A highly entertaining mea culpa: “I don’t like his politics, I don’t agree with some of what I thought he might be doing, and even may still do. But at the same time, there was this reaction to him and to the announcement that was probably overblown to many.” / via Times Higher Education
Back to university complexity, acquiring actual education businesses (i.e. scaled online degree providers) has been one of the lowest ROI actions traditional universities have taken in recent years. This complicates the discussion over whether the University of Idaho can complete its acquisition of University of Phoenix - it is almost certainly a bad idea, but who are the stakeholders who get to make that call? / via PhilonEdTech and New York Times
A thoughtful overview of how various stakeholders in higher ed are thinking about AI, AI will shake up higher ed. Are colleges ready? One statistic that stuck out to me: 5 institutions - Northeastern University, Carnegie Mellon University, the University of Pennsylvania, Clemson University, and the University of Florida - accounted for ~half of AI job postings at universities. / via Chroncile of Higher Education
Workforce
Career websites face emerging role as salary transparency cops. I’m not sure I like the principle of holding job board websites liable for the actions of their corporate users, but I get how it would incentivize enforcement of salary transparency laws in a quick and decentralized way. / via Bloomberg Law
EdTech / Tech
Duolingo daily active users grow 65%. NFA, but if I had to bet on one non-BigTech/AGI company to become *the* catch-all learning app, it would be Duolingo. / via Bloomberg
Swedish FinTech company Klarna’s AI assistant is “doing the equivalent work of 700 full-time agents.” I fully expect this story to play out in EdTech and large universities. Those riverfront textile mill offices in Manchester may become residential lofts sooner than we expect. / via Fast Company and Inside Higher Ed
Related, Stack Overflow cuts IP licensing deal with Google to supply Gemini’s knowledge base. It remains to be seen how the major publishers will work with AI platforms in the long term. However, this deal, alongside Google’s $60M/year deal to license Reddit content, starts to provide a framework for what publisher relationships might look like. / via Techcrunch
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!