EdTech News Roundup - Week of 9/13
Every classroom needs World Map
I still seem to be having some issues with Substack, apologies if you receive this post twice.
Thank you for the feedback on the company spotlight posts. It seems like they could be a positive addition to the newsletter in the future, particularly the sections on market sizing. I’m planning to do a reader survey in November to scope out this and other potential sections.
Two weeks of content to get through, on to the news!
Funding / M&A / IPOs
Blackboard and Anthology merge: see “Stories” below for more
Byju’s acquires Tynker for $200M: Tynker operates an eponymous coding platform with 60M registered students. Bjyu’s now claims they have 100M registered students globally. I spent most of July writing about Byju’s, so won’t go into much further detail here - the pace they are deploying capital (both cash and equity) is impressive
Pearson acquires Faethm: terms undisclosed. Faethm provides workforce analytics to large companies. Earlier this year, we saw 2U invest in workforce tooling via the “Career Engagement Network” and I would not be surprised to see other OPMs invest in this trend as well
Apna raises $100M from Sequoia, Owl, and GSV: A hybrid upskilling/interviewing platform based in India. Apna is just 22 months old, has raised three times this year, and is currently valued at $1B+. They’ve grown from 10M to 16M users in the last ~3 months.
Leap Finance raises $55M: India-based Leap finds its customers affordable loans and other financial services so that they can study abroad. While many governments subsidize university tuition in-country, this benefit is rarely extended to overseas studies. As a result, studying internationally is usually limited to the wealthy, who can afford paying high tuition prices in cash.
The Org raises $20M from Founders Fund: The Org seeks to create real-time portrayals of company organizational structures via both crowdsourcing and in partnership with the companies themselves
Polywork raises $13M from A16Z: A self-described Linkedin challenger, Polyworks endeavors to have its users create a more active profile rather than the static resumes Linkedin promotes
The Amazon announcement is notable for a few reasons:
Covers 100% of costs up front: many company-sponsored tuition assistance programs require employees to pay for their courses up front, only covering tuition if the employee meets certain requirements (usually completion, with a certain GPA). This can be a significant barrier to low-income students even attempting to use their tuition benefit
Employees are eligible after 90 days: Another frequent barrier to entry, many companies require a year-plus of service time before employees can begin using their tuition benefit
Usable at 1200+ institutions: while universities do need to apply to be a part of the program, Amazon is relatively non-selective about where and how students choose to use their benefit
Additionally, Amazon announced a number of non-university upskilling programs, including apprenticeships and short certifications, that employees will be eligible for.
Overall, I hope that this pushes Amazon’s competitors towards offering comparable programs. As was pointed out to me, this is basically every business in the America.
I’m kidding, they haven’t picked a name yet. But Blackboard and Anthology (the PE-backed roll up of Campus Management, Campus Labs, and iModules) are preparing to merge.
Both companies are multi-faceted, but Blackboard gets the preponderance of its revenue from the LMS market and Anthology receives most of its revenue from the SIS market. This merger is based on the principle that there are increased sales to be had when one company sells many things rather than multiple companies selling multiple things.
Opinions diverge as to whether this principle will hold in this specific market. Phil Hill argues that the buyers and buying process for the LMS and SIS in Higher Ed are fundamentally different. Trace Urdan and Troy Williams argue that the companies’ combined distribution power is formidable enough to overcome any differences in the buying process and that there are real savings that can be passed on to institutional partners.
While this is an important argument, the reporting did not cover a more basic rationale - Blackboard’s former owner, Providence Equity Partners, wanted an exit from their investment.
Providence bought Blackboard in 2011. Ten years is a long time in the private equity world, with most companies turning over in closer to 5 years. On the other hand, Veritas Capital rolled up Anthology just last year.
That Veritas is the new majority owner and Providence plans to take a significant amount of cash from the transaction (rather than keeping equity) compounds my belief here. One firm looking for an exit and another hungry to grow their EdTech empire feels like a pretty good rationale for a deal.
College football - brought to you by weed, booze, and gambling: the next ~5 years of college sports look like they are going to be a series of eye-opening cash grabs, with each faction (universities, players, and sponsors) taking advantage of the others. I only hope there is a satisfying equilibrium on the other side of it
Teaching financial literacy doesn’t actually help financial literacy: “Today's financial literacy education doesn't work because virtually all major financial literacy resources are developed or shaped by businesses that benefit when consumers make money mistakes.”
Student safety monitoring as both blessing and curse: I’m not sure where I land on the issue of student safety vs. privacy, but am glad the folks at 74Million dug into it. Regardless, I am frightened by the mental health problems emerging among K12 students
Walmart and Guild publish impact report: Goldie at the Chronicle published some fairly harsh criticism of the report. I hope this turns out similarly to the OPM industry, where impact reports became table stakes (albeit slowly) after 2U published theirs in 2014
Thing(s) I’m Thinking About
I’ve spent a lot of time this year thinking about Community. What communities do I want to be a part of? What role(s) do I play in these communities? How do communities (both mine and others) change over time?
This article on DAOs and [ ] - to - earn models pushed my thinking on how communities can be managed through incentives, both monetary and non-monetary.
I’d like to join a couple of DAO’s this Fall to get a firsthand understanding of how they work. I’m not yet sure how they’ll impact EdTech, but believe they are an important trend to watch.
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I work hard to stay neutral here, but it’s important to me that you all know my potential biases!