ETCH Weekend Reading 4/14/24

Post-ESSER K12 funding, Poland bans homework, New student loan relief, and Duolingo in China

Hello!

It is GSV week in San Diego. The forecast calls for sunny skies, full calendars, abundant margaritas, and at least one field trip to a Navy vessel. Please feel free to send selfies taken with your favorite EdTech mascot for next week’s newsletter (which may come a day or two late, depending on how exhausting this week is).

On to the news!

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Funding / M&A

• Abre raises $24M / US, School Software Infrastructure / PeakSpan Capital, JumpStart Ventures, JobsOhio Growth Capital Fund, Golden Angels Investors

• EarliTech Diagnostics raises $21.5M / US, Special Education / Nexus NeuroTech Ventures, Venture Investors (not a typo, they really named their fund this)

• Summer raises $9M / US, Student Financing / Rebalance Capital, SemperVirens, General Catalyst, QED, Flourish Ventures

• Kokoro Kids raises €2.25M / Spain, Special Education / Lego Foundation

• PETE raises $2M / US, Corporate Upskilling / Cofounders Capital

• Ednition raises $1.35M / US, School Software Infrastructure / Reach Capital, GSV Ventures, Avalanche VC, Long Term Impact

• GoodGist raises $1M / US, Corporate Upskilling / FortyTwo VC, Cedar Ridge Partners, DX Partners

• Nexus Capital Management acquires ACT / US, Assessment

  • Note: Yes, that ACT, the (formerly non-profit) administrator of the eponymous college entrance exam

• EAB acquires Forage / US, College Counseling (Career Pathways)

• Multiverse acquires Searchlight / UK (US), Apprenticeships (Talent Management)

• LMS365 acquires Valuebeat / Denmark, Corporate LMS

• Keystone Education Group acquires Edunation and Asia Exchange / Norway, Study Abroad

• Keystone Partners acquires The Center for Executive Coaching / US, Training Provider

To be a verified funding in this newsletter, a company must raise $1M+ from named, searchable institutional investors and disclose the amount raised, be part of an acquisition where the combined entity has > 50 employees, or raise a VC/PE fund of $10M+

Other Transactions

• Enatom raises €900K

• Aviotron raises $600K

• Ada raises Pre-A round

• Wakelet acquires Bulb

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People Moves

• Jessie Woolley-Wilson joins Owl Ventures as Operating Partner / via PRNewswire

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Links

K12

• Post-ESSER fallout starts to come into focus. I think it is fair to say that many (most?) folks in the education space are aware that there may be trouble on the horizon for the K12 world when ESSER funding expires in September. However, there are relatively few folks who can detail exactly what that means. Not for lack of competency, but because it is hard to predict! There are any number of federal, state, and/or local funding initiatives that *might* fill ESSER gaps. Furthermore, the big K12 sales season is late winter to late spring; participants in this year’s sales cycle still have access to ESSER dollars. It will be easier to assess the full scale of the impact next summer (2025).

  • That does not mean we should wait until next summer to talk about it! It is good to see Georgetown’s Edunomics Lab and Tyton Partners dipping their toes in the water, opining on the expected average size of funding cuts to be made and surveying district leaders on their funding priorities for the upcoming school year, respectively. / via K12 Dive and Tyton Partners

  • We also heard from Houston’s superintendent, who is preparing many of his schools for substantial budget cuts. These cuts are not purely ESSER-driven - this superintendent has already made headlines shaking up a poor-performing school system - but I think it’s fair to say the end of ESSER played a substantial role. / via 74 Million

• A Brooklyn elementary school changes its hours to 7am - 7pm to help working parents with childcare. I continue to believe that change is coming to the “traditional” school day, whether it is extended-day experiments like this, the year-round schooling on trial in Philadelphia, or the influence/competition of public school alternatives (charters, microschools, etc.). / via New York Times

  • For better or for worse, these scheduling changes are largely being driven by childcare needs, not academics. Employers are taking note of childcare needs too, though their focus, to date, is mostly on the Pre-K children of employees. / via Wall Street Journal

  • Also related, 51% of Americans say the country’s public K12 education is headed in the wrong direction. Not great! / via Pew Research

• Poland’s Prime Minister bans homework (until 3rd grade). And it will be optional through the 8th grade, not counting toward grades. While building a (winning) political platform around “excessive homework” is morbidly entertaining, this feels like a problem better solved by a scalpel (and efficacy research) rather than the sledgehammer of a national policy. / via Associated Press

• The 5% problem. “Imagine a doctor prescribing a sophisticated new drug to 100 patients and finding 95 of them didn’t take it as prescribed. That is the situation with many online math interventions in K–12 education today. They are a solution for the 5 percent. The other 95 percent see minimal gains, if any.” / via Education Next

Higher Ed

• I said my piece on the FAFSA a month ago, so am not going to spend much more time on it. For those tracking the issue, Inside Higher Ed provided a helpful timeline of events and Phil Hill provided an eye-opening visual of the state-by-state impact. / via Inside Higher Ed and PhilOnEdTech

  • Also from the Education Department this week, and definitely not tied to the FAFSA fallout or impending election, President Biden outlines plans for 30 million Americans to receive student loan relief. / via Washington Post

    • To be more specific, the intent behind student loan relief is good. But, it feels like putting the cart before the horse. The horse being college costs continuing to rise at an eye-watering rate while students continue to be spun in circles on how to evaluate which colleges are worth attending (or whether to attend at all). / via New York Times and Bloomberg

• The Army reconsiders its education benefits package. There is some nuance to this topic, it is not just cost-cutting. But it is hard not to question as the military modernizes, with an increasing dependence on software and knowledge work. / via Inside Higher Ed

EdTech

• Kirkbi 2023 Annual Report. Press release here. Kirkbi is a Danish company that has been known mainly for its ownership of Lego, but which spent $875M on Brainpop in 2022 and played a substantial role in the $1.7B go-private deal for Kahoot! last year. This annual report is especially notable because it highlights the changing of the guard from the 3rd-generation of family ownership to the 4th generation. / via Kirkbi

• Duolingo continues to grow in China. It has been easy to forget about China’s EdTech market since 2021’s for-profit tutoring ban, which wiped out most of the sector. Duolingo - and, to a lesser extent, Coursera - provide a helpful reminder that there is still opportunity in the market if you look in the right places. / via ChinaDaily

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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!

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