ETCH Weekly Update 8/29
Launching ETCH Assessments
Hello!
I hope that you enjoyed Sunday’s edition of Weekend Reading. For today’s Weekly Update, I’m trying something a little different. My intent with this format is to bring more Funding + M&A discussion to paid subscribers and to highlight a new initiative: ETCH Assessments.
Over the last few weeks, a number of folks with industry experience have volunteered to write short overviews of the private market deals covered in Weekend Reading. These overviews include a synopsis of the publicly available information about the companies covered as well as Bull and Bear cases for those companies’ growth. I find this framework useful for thinking about the relative position of each fundraising event in the broader EdTech market and will be contributing to these assessments alongside the volunteer writers.
Below, you’ll see these assessments hyperlinked after each deal summary. I hope you will click through for the deal facts and our takes on potential scenarios for these companies. And please let me know what you think of this new format!
On to the update!
Funding + M&A
Again — trying something new here! Here are the 5 recent deals that the team found most compelling this week. At the end of each bullet point, you can click the link for more information, including deal facts and our Bull and Bear cases for these companies’ growth.
Fizz raises $25M: Palo Alto-based Fizz is a semi-anonymous social app built for college students. The app was developed by two Stanford undergraduate dropouts who recruited a founder with 7 exits under his belt to lead the team. Today, the app is used by students on 80+ campuses across the US. / ETCH Assessment of the deal by Matthew Tower
Kinjo raises $6.5M: Austin-based Kinjo helps parents find educational Roblox games for their children. When a parent subscribes to Kinjo, their child receives Roblox’s in-game currency in exchange for playing educational mini-games (the amount varies based on how educational the game is). Currently used by 20,000 children, the funding from this round will go towards go-to-market efforts and expanding the company’s product to cover Fortnite, Minecraft, and YouTube videos. / ETCH Assessment of the deal by Charlotte Jones
Shaktimaan raises $2M: Bengaluru-based Shaktimaan helps learners prepare for the Indian civil service recruitment exam. The company faces an uphill battle for market share in the most competitive portion of the Indian EdTech market, but hopes to differentiate itself by using AI to substantially lowering the price of test prep courses. The funding from this round will be used to help the company train a proprietary large-language model to replace the human instructors that most of Shaktimaan’s competitors use. / ETCH Assessment of the deal by Charlotte Jones
Inspera acquires Crossplag: Oslo-based Inspera is a private equity-backed global player in the K12 assessments space. Beaverton-based Crossplag helps instructors detect plaigarism in their tests. Of particular interest to Inspera and the 160+ countries the company operates in, Crossplag claims to be the first and only plaigarism detector designed to work across langauges. / ETCH Assessment of the deal by Charlotte Jones
Noodle acquires Meteor Learning: New York-based Noodle is a growth-stage Online Program Manager (OPM). Boston-based Meteor Learning is a strategy consulting firm focused specifically on working with post-secondary institutions. Noodle will use the acquisition as the basis for their own strategy consulting practice, which the company hopes to use to gain deeper insight into where universities are investing for the future. They will also expand their burgeoning university-to-employer business line. / ETCH Assessment of the deal by Matthew Tower
Looking for more insights on EdTech deals? Founding Members receive access to the ETCH Funding Database, which includes information on over 600 financial transactions in the EdTech space from the past 2 years. If you are not a Founding Member you can upgrade here.
Most clicked link from Weekend Reading: Imagine Learning launches $50M venture fund
Context: Founded by Jonathan Grayer, Imagine Learning is a private equity roll-up of K12 content companies, including Learn Zillion, Studysync, Edgenuity, and Twig Education, among others. The company has always been acquisitive, but has not, to my knowledge, been an active player in the venture space.
Just when you thought the AI hype had peaked! While it is not surprising to see a mature company making an announcement about AI, it is surprising to see an announcement about a corporate venture capital fund amid the downturn in the venture market (which has been particularly acute for EdTech). It is all the more surprising to see the move from Imagine Learning, which has been much more of an acquirer than an investor over the past ~10 years.
Optimistically, Imagine may be entering the venture market at the perfect time. The downturn means less competition for deals. Furthermore, many of the education-specialist VCs have been gradually moving towards the workforce market in pursuit of the larger TAMs often associated with workforce companies. It is not hard to imagine (sorry) that the team will have their pick of available deals.
MT Note: I spent a lot of time this week working to get ETCH Assessments off the ground. Moving forward, I’m hoping to find a healthy balance between ETCH Assessments and news analysis in this paid subscription tier, whether it is in this newsletter or a combination of newsletters.
Question of the Week
Results of last week’s poll:
