Investor Marlon Nichols and Wonderschool’s Chris Bennett on getting to the point with a pitch deck

Before our conversation on Extra Crunch Live, Marlon Nichols dropped a bomb on me. The MaC Venture Capital founding managing partner hadn’t actually seen Wonderschool’s original pitch deck before investing in the remote education startup. Our conversation with the company’s CEO, Chris Bennett was the first time he’d been through the seed-stage deck.

Their partnership was a bit of Silicon Valley luck, good timing and some old fashioned networking.

“He was a part of an organization that was helping to bring more diverse founders in touch with investors,” says Nichols. “That was happening when I first moved to the San Francisco Bay Area in 2011. We started to build a casual relationship then. Fast forward to 2016. At my first fund, Cross Culture [Ventures], we were interested in investing in early childhood care. We were actually looking at a number of different companies and one of my partners, Suzy [Ryoo] was like, ‘Have you heard of this company Wonderschool that Chris Bennett was starting, and I was like, ‘Holy shit, I know Chris.’ ”

According to Bennet, Nichols reached out about the opportunity on Facebook Messenger. After the initial conversation and assessing some direct competitors, Nichols says Wonderschool was ultimately the right fit for Cross Culture’s portfolio.

Fittingly, the startup’s origin also has its roots in SV networking.

“I used to go the TED conference every year,” says Bennett. “I met a woman who told me that early childhood education was really important [ … ] She said, ‘A lot of the skills I use today as a CEO, a lot of those seeds were planted before the age of five.’ I thought that was a really wild idea. I started doing research and realized there was a shortage of childcare in America.”

Bennett cringed slightly when we started the process of showing off the company’s early deck. The first thing that jumped out at all of us was just how bare bones the presentation is: white text on a blue background, largely made up of bullet points. There’s not flash — or even graphics — to be found in the entire thing. And the CEO adds that honestly, not much changed aesthetically between that first pitch and the Series A deck.

“It aligned with what we were valuing at the time,” says Bennett. “We were really focused on getting the product-market fit and really trying to understand what our customers needed. And we’re really focused on building the team.”

Perhaps there was something to it, however, as Wonderschool managed to raise $20 million for the latter.

#chris-bennett, #education, #extra-crunch-live-recap, #funding, #mac-venture-capital, #marlon-nichols, #startups, #venture-capital, #wonderschool

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Merlyn Mind emerges from stealth with $29M and a hardware and software solution to help teachers with tech

We’ve chronicled, in great detail, the many layers of technology, services and solutions, that have been wrapped around the world of education in recent years — and especially in the last year, which became a high watermark for digital learning tools because of Covid-19. Today, a startup called Merlyn Mind is coming out of stealth with a proposition that it believes helps tie a lot of this together in the K-12 classroom — a “digital assistant” that comes in the form of a piece of custom hardware and software to “read” natural voice and remote control commands from a teacher to control multimedia apps on a screen of choice. Along with this, Merlyn Mind is announcing $29 million in initial funding to build out its vision.

The funding is being led by specialist edtech investor Learn Capital, with other unnamed investors participating. It comes after Merlyn Mind spent about three years quietly building its first release and more recently piloting the service in 50+ classrooms in more than 20 schools.

Co-founded by longtime IBM scientists Satya Nitta (the CEO), Ravi Kokku, and Sharad Sundararajan — all of whom spent several years leading education efforts in IBM’s Watson AI research division — Merlyn Mind is coming to the market with a patented, vertically integrated solution to solve what Nitta told me in an interview he believes and has seen first-hand to be a fundamental pain point in the world of edtech.

In effect, education and technology may have now been merged into a single term as far as the tech world is concerned, but in terms of practical, on-the-ground application, many teachers are not making the most of the tools they have in the classroom. The majority are, he believes, facing “cognitive overload” (which is not to mention the kids, who themselves probably are facing the same: a problem for it to tackle down the road, I hope), and they need help.

To be fair, this problem existed before the pandemic, with research from McKinsey & Co. published in 2020 (and gathered earlier) finding that teachers were already spending more than half of their time on administrative tasks, not teaching or thinking about how and what to teach or what help specific students might need. Other research from Learn Platform found that teachers potentially have as many as 900 different applications that they can use in a classroom (in practice, Nitta told me a teacher will typically use between 20 and 30 applications, sites and tech services in a day, although even that is a huge amount).

Post-Covid-19, there are other kinds of new complications to grapple with on top of all that. Not only are many educators now playing catch-up because of the months spent learning at home (it’s been widely documented that in many cases, students have fallen behind), but overall, education is coming away from our year+ of remote learning with a much stronger mandate to use more tech from now on, not less.

The help that Merlyn Mind is proposing comes in the form of what the startup describes as an “AI hub.” This includes a personal assistant called Symphony Classroom, a kind of Alexa-style voice interface tailored to the educational environment and built on a fork of Android; a smart speaker that looks a bit like a soundbar; and a consumer-style remote that can be used also for navigation and commands.

These then work with whatever screen the teacher opts to use, whether it is a TV, or an interactive whiteboard, or something else; along with any other connected devices that are used in the classroom, to open and navigate through different apps, including various Google apps, NearPod, Newsela, and so on. (That could potentially also include kids’ individual screens if they are being used.)

The idea is that if a teacher is in the middle of a lesson on a specific topic and a question comes up that can best be answered by illustrating a concept through another app, a teacher can trigger the system to navigate to a new screen to find that information and instantly show it to the students. The system can also be used to find a teacher’s own materials on file. The demo I saw worked well enough, although I would love to see how an ordinary teacher — the kind they’re hoping will use this — would fare.

Everyone knows the expression “hardware is hard,” so it’s interesting to see Merlyn addressing its problem with a hardware-forward approach.

Nitta was very ready with his defense for this one:

“I’ll tell you why we built our own hardware,” he told me. “There’s a bunch of AI processing that’s happening on the device, for various reasons, including latency and security. So it’s kind of an edge AI appliance. And the second thing is the microphones. They are designed for the classroom environment, and we wanted to have complete control over the tooling of these microphones for the processing, for the environment, and that is very hard to do. If you are taking a third-party microphone array off the shelf, it’s impossible, actually, you simply cannot.”

The startup’s early team is rounded out with alums from the likes of HP Education, Amazon, Google, Facebook, Broadcom and Roku to help build all of this, knowing the challenges they were tackling, but also the payoff once it would be finished if it all works.

“We have a very, very talented team, and we basically said, right, this is going to be a lot of hard work that will take us three and a half years. We have to build our own piece of hardware… and we ended up building the entire voice stack from from scratch ourselves, too,” Nitta continued. “It means we have end to end control of everything from the hardware all the way to the language models.”

He did point out though that over time, there will be some elements that will be usable without all the hardware, in particular when a teacher may suddenly have to teach outside the classroom again in a remote learning environment.

It’s a very ambitious concept, but where would education and learning be if not for taking leaps once in a while? That’s where investors stand on the startup, too.

“Just as we saw with the breakthrough edtech company Coursera which reached IPO this year and was started a decade ago by two machine learning professors, in today’s hypercompetitive market the best edtech companies need to start with an advanced technological core,” said Rob Hutter, founder and managing partner of Learn Capital. “Merlyn is one of the first companies to focus on the enhancement of live teaching in classrooms, and it is developing a solution that is so intuitive it allows teachers to leverage technology with mastery while using minimal effort.  This is a very promising platform.”

The proof will be in how it gets adopted when it finally launches commercially later this year, with pricing to be announced later.

#classrooms, #edtech, #education, #funding, #ibm, #merlyn-mind, #teachers, #watson

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Vienna’s GoStudent raises $244M at a $1.7B valuation for its online tutor marketplace

Online teaching came into the spotlight for many students and parents in the last year, and today one of the companies that saw a big lift during that rush of activity is announcing a big round of funding to carry it into what has emerged as a more permanent change of habits for many learners.

GoStudent, a marketplace where K-12 students (and their parents) can find and engage with one-to-one video-based tutors in a variety of subjects, has raised €205 million ($244 million), in a Series C round that values the company at €1.4 billion ($1.7 billion).

The funding is coming at a time of strong growth. The Vienna, Austria-based startup is now live in 18 countries and sees some 400,000 sessions booked monthly on its platform, up 700% year-on-year (and up 15% month-on-month). It says it is on track to double employees to 1,000 and reach 10,000 tutors by the end of this year. The plan is to expand to more countries — Mexico and Canada are next on the list — and to continue growing its lists of tutors and subjects covered.

“We now plan to be even more aggressive geographically and plan to invest more into the brand,” Felix Ohswald, cofounder and CEO, told TechCrunch.

(As a point of comparison, when it last fundraised in March, GoStudent was booking a mere 250,000 tutoring sessions over its platform.)

DST Global is leading the round, with SoftBank (via its Vision Fund 2), Tencent, Dragoneer and previous backers Coatue, Left Lane Capital and DN Capital also participating. Vienna, Austria-based GoStudent has raised €291 million to date, including a €70 million round only this past March and €13.3 million in a Series A this past November.

The rapid pace of funding and GoStudent’s rising valuation — this investment makes it the highest-valued edtech startup in Europe, the company said — comes amid a streak of funding rounds for edtech companies.

And that may be no surprise: online and other digital tools in the last year especially felt more relevant (and in many cases were used more) than ever before due to social distancing during the pandemic. (Other recent deals have included funding for Byju’s, Kahoot, Formative, Engageli, Lingoda, Brainly, ClassDojo, Newsela, and Yuanfudao, among many others.)

But in the case of GoStudent, it’s also because the startup itself is also doing an A+ job in scaling its concept.

The company has been around since 2016 — when it started out initially providing a network for people to help each other answer questions (similar to Brainly), as well as connect with tutors, and for tutors to organize classes — but it was only about 2.5 years ago that GoStudent started to focus more squarely on one-to-one tutoring.

GoStudent provides a fully-integrated service, which lets students and their parents select from a range of topics that are typically taught in schools — currently some 30 subjects, including sciences, math, computing, languages, history, business and more — that they can be tutored on generally or specifically with the aim of taking an exam.

Tutoring comes from people who are tested, vetted and interviewed by GoStudent before they can join the platform; and before engaging tutors, parents and students interview an individual tutor and go through a practice lesson as part of that.

Learning plans are then organized according to students’ schedules and what they are setting out to do (they can send over their homework, or chapters they’re studying in school or even a curriculum outline); and the classes, assessments and payments (based on packages booked), are all handled over the platform, too.

Although there are a number of ways of learning a subject over the internet today — and specifically a number of online-only direct tutoring platforms in the market now (including Brainly, Yuanfudao, and others) — Ohswald said that by and large GoStudent’s biggest competition is the bigger in-person business of teaching, and of students and tutors connecting with each other through word of mouth — the “offline shadow market of tutors,” as he calls it.

All the same, while there are tech tools involved in provisioning and running lessons, at its heart GoStudent is also still about humans connecting to help each other, rather than humans connecting with computer programs.

Interestingly, its founders believe that the Covid-19 pandemic effect was not uniformly positive for its business.

“The pandemic had mixed effects,” Ohswald said. “On the one hand there was a natural demand from kids and parents. But with the schools closed, there was less pressure, less exams, less demand for after-school study. That aspect had a negative effect. But more broadly, there was a BIG boost for digital education. So the mindset of the parent and family drastically shifted.”

He noted that many families turned to tutoring to help “support the kids at home, to help them to stop being overwhelmed.” (And I would add, especially in the first part of the lockdown last year when schools were scrambling a little to regroup and teach online, that as a parent, we found it a relief to have at least some consistency with private tutors online at that time.)

What that means, essentially, is that while GoStudent did well in the last year, the company does not want to tie its growth to a specific set of pandemic circumstances that may well become less of an issue in the year ahead.

Indeed, for better or worse, there are bigger factors at play that predate the pandemic. Increasing pressure on students to perform their best competing against others, a continuing focus on testing, and a general level of academic ambition; but also a much easier and cheaper way of finding and connecting with people who can help students feel more supported in their efforts: all of these are also playing a role.

“GoStudent is one of the fastest growing companies that we have ever backed. The company has grown 800% in terms of revenue and 70x in terms of value since 2020 and we are convinced that this is just the beginning,” Nenad Marovac, founder and managing partner, DN Capital, told TechCrunch. “We believe that GoStudent can become one of the top digital schools in the world. By leveraging technology GoStudent democratizes quality education to all at affordable prices.”

#edtech, #education, #europe, #funding, #gostudent, #online-education, #tutoring, #tutors

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Extra Crunch roundup: influencer marketing 101, spotting future unicorns, Apple AirTags teardown

With the right message, even a small startup can connect with established and emerging stars on TikTok, Instagram and YouTube who will promote your products and services — as long as your marketing team understands the influencer marketplace.

Creators have a wide variety of brands and revenue channels to choose from, but marketers who understand how to court these influencers can make inroads no matter the size of their budget. Although brand partnerships are still the top source of revenue for creators, many are starting to diversify.

If you’re in charge of marketing at an early-stage startup, this post explains how to connect with an influencer who authentically resonates with your brand and covers the basics of setting up a revenue-share structure that works for everyone.


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Our upcoming TC Early Stage event is devoted to marketing and fundraising, so expect to see more articles than usual about growth marketing in the near future.

We also ran a post this week with tips for making the first marketing hire, and Managing Editor Eric Eldon spoke to growth leader Susan Su to get her thoughts about building remote marketing teams.

We’re off today to celebrate the Juneteenth holiday in the United States. I hope you have a safe and relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

As the economy reopens, startups are uniquely positioned to recruit talent

Little Fish in Form of Big Fish meeting a fish.

Image Credits: ballyscanlon (opens in a new window) / Getty Images

The pandemic forced a reckoning about the way we work — and whether we want to keep working in the same way, with the same people, for the same company — and many are looking for something different on the other side.

Art Zeile, the CEO of DHI Group, notes this means it’s a great time for startups to recruit talent.

“While all startups are certainly not focused on being disruptive, they often rely on cutting-edge technology and processes to give their customers something truly new,” Zeile writes. “Many are trying to change the pattern in their particular industry. So, by definition, they generally have a really interesting mission or purpose that may be more appealing to tech professionals.”

Here are four considerations for high-growth company founders building their post-pandemic team.

Refraction AI’s Matthew Johnson-Roberson on finding the middle path to robotic delivery

Matthew Johnson-roberson

Image Credits: Bryce Durbin

“Refraction AI calls itself the Goldilocks of robotic delivery,” Rebecca Bellan writes. “The Ann Arbor-based company … was founded by two University of Michigan professors who think delivery via full-size autonomous vehicles (AV) is not nearly as close as many promise, and sidewalk delivery comes with too many hassles and not enough payoff.

“Their ‘just right’ solution? Find a middle path, or rather, a bike path.”

Rebecca sat down with the company’s CEO to discuss his motivation to make “something that is useful to the general public.”

How to identify unicorn founders when they’re still early-stage

Image Credits: RichVintage (opens in a new window)/ Getty Images

What are investors looking for?

Founders often tie themselves in knots as they try to project qualities they hope investors are seeking. In reality, few entrepreneurs have the acting skills required to convince someone that they’re patient, dedicated or hard working.

Johan Brenner, general partner at Creandum, was an early backer of Klarna, Spotify and several other European startups. Over the last two decades, he’s identified five key traits shared by people who create billion-dollar companies.

“A true unicorn founder doesn’t need to have all of those capabilities on day one,” Brenner, writes “but they should already be thinking big while executing small and demonstrating that they understand how to scale a company.”

Founders Ben Schippers and Evette Ellis are riding the EV sales wave

disrupt mobility roundup

Image Credits: TechCrunch

EV sales are driving demand for services and startups that fulfill the new needs of drivers, charging station operators and others.
Evette Ellis and Ben Schippers took to the main stage at TC Sessions: Mobility 2021 to share how their companies capitalized on the new opportunities presented by the electric transportation revolution.

Scale AI CEO Alex Wang weighs in on software bugs and what will make AV tech good enough

Image Credits: Alexandr Wang

Scale co-founder and CEO Alex Wang joined us at TechCrunch Sessions: Mobility 2021 to discuss his company’s role in the autonomous driving industry and how it’s changed in the five years since its founding.

Scale helps large and small AV players establish reliable “ground truth” through data annotation and management, and along the way, the standards for what that means have shifted as the industry matures.

Even if two algorithms in autonomous driving might be created more or less equal, their real-world performance could vary dramatically based on what they’re consuming in terms of input data. That’s where Scale’s value prop to the industry starts, and Wang explains why.

Edtech investors are flocking to SaaS guidance counselors

Image Credits: Getty Images / Vertigo3d

The prevailing post-pandemic edtech narrative, which predicted higher ed would be DOA as soon as everyone got their vaccine and took off for a gap year, might not be quite true.

Natasha Mascarenhas explores a new crop of edtech SaaS startups that function like guidance counselors, helping students with everything from study-abroad opportunities to swiping right on a captivating college (really!).

“Startups that help students navigate institutional bureaucracy so they can get more value out of their educational experience may become a growing focus for investors as consumer demand for virtual personalized learning increases,” she writes.

Dear Sophie: Is it possible to expand our startup in the US?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

My co-founders and I launched a software startup in Iran a few years ago, and I’m happy to say it’s now thriving. We’d like to expand our company in California.

Now that President Joe Biden has eliminated the Muslim ban, is it possible to do that? Is the pandemic still standing in the way? Do you have any suggestions?

— Talented in Tehran

Companies should utilize real-time compensation data to ensure equal pay

Two women observing data to represent collecting data to ensure pay equity.

Image Credits: Rudzhan Nagiev (opens in a new window) / Getty Images

Chris Jackson, the vice president of client development at CompTrak, writes in a guest column that having a conversation about diversity, equity and inclusion initiatives and “agreeing on the need for equality doesn’t mean it will be achieved on an organizational scale.”

He lays out a data-driven proposal that brings in everyone from directors to HR to the talent acquisition team to get companies closer to actual equity — not just talking about it.

Investors Clara Brenner, Quin Garcia and Rachel Holt on SPACs, micromobility and how COVID-19 shaped VC

tc sessions mobility speaker_investorpanel-1

Image Credits: TechCrunch

Few people are more closely tapped into the innovations in the transportation space than investors.

They’re paying close attention to what startups and tech companies are doing to develop and commercialize autonomous vehicle technology, electrification, micromobility, robotics and so much more.

For TC Sessions: Mobility 2021, we talked to three VCs about everything from the pandemic to the most overlooked opportunities within the transportation space.

Experts from Ford, Toyota and Hyundai outline why automakers are pouring money into robotics

disrupt mobility roundup

Image Credits: TechCrunch

Automakers’ interest in robotics is not a new phenomenon, of course: Robots and automation have long played a role in manufacturing and are both clearly central to their push into AVs.

But recently, many companies are going even deeper into the field, with plans to be involved in the wide spectrum of categories that robotics touch.

At TC Sessions: Mobility 2021, we spoke to a trio of experts at three major automakers about their companies’ unique approaches to robotics.

Apple AirTags UX teardown: The trade-off between privacy and user experience

Image Credits: James D. Morgan/Getty Images

Apple’s location devices — called AirTags — have been out for more than a month now. The initial impressions were good, but as we concluded back in April: “It will be interesting to see these play out once AirTags are out getting lost in the wild.”

That’s exactly what our resident UX analyst, Peter Ramsey, has been doing for the last month — intentionally losing AirTags to test their user experience at the limits.

This Extra Crunch exclusive helps bridge the gap between Apple’s mistakes and how you can make meaningful changes to your product’s UX.

 

How to launch a successful RPA initiative

3D illustration of robot humanoid reading book in concept of future artificial intelligence and 4th fourth industrial revolution . (3D illustration of robot humanoid reading book in concept of future artificial intelligence and 4th fourth industrial r

Image Credits: NanoStockk (opens in a new window) / Getty Images

Robotic process automation (RPA) is no longer in the early-adopter phase.

Though it requires buy-in from across the organization, contributor Kevin Buckley writes, it’s time to gather everyone around and get to work.

“Automating just basic workflow processes has resulted in such tremendous efficiency improvements and cost savings that businesses are adapting automation at scale and across the enterprise,” he writes.

Long story short: “Adapting business automation for the enterprise should be approached as a business solution that happens to require some technical support.”

Mobility startups can be equitable, accessible and profitable

tc sessions

Image Credits: TechCrunch

Mobility should be a right, but too often it’s a privilege. Can startups provide the technology and the systems necessary to help correct this injustice?

At  our TC Sessions: Mobility 2021 event, we sat down with Revel CEO and co-founder Frank Reig, Remix CEO and co-founder Tiffany Chu, and community organizer, transportation consultant and lawyer Tamika L. Butler to discuss how mobility companies should think about equity, why incorporating it from the get-go will save money in the long run, and how they can partner with cities to expand accessible and sustainable mobility.

CEO Shishir Mehrotra and investor S. Somasegar reveal what sings in Coda’s pitch doc

Image Credits: Carlin Ma / Madrona Venture Group/Brian Smale

Coda CEO Shishir Mehrotra and Madrona partner S. Somasegar joined Extra Crunch Live to go through Coda’s pitch doc (not deck. Doc) and stuck around for the ECL Pitch-off, where founders in the audience come “onstage” to pitch their products to our guests.

Extra Crunch Live takes place every Wednesday at 3 p.m. EDT/noon PDT. Anyone can hang out during the episode (which includes networking with other attendees), but access to past episodes is reserved exclusively for Extra Crunch members. Join here.

#artificial-intelligence, #coda, #diversity, #ec-techcrunch-tc-mobility, #education, #entrepreneurship, #eric-eldon, #extra-crunch-roundup, #jackson, #juneteenth, #klarna, #private-equity, #rachel-holt, #rpa, #scale-ai, #shishir-mehrotra, #startups, #susan-su, #tc, #transportation, #venture-capital

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Edtech investors are flocking to SaaS guidance counselors

ApplyBoard, a startup that helps international students find opportunities to study abroad, announced today that it has nearly doubled its valuation in a little over a year. The Ontario-based company is now worth around $3.2 billion after raising a $300 million Series D round led by the Ontario Teachers’ Pension Plan Board.

ApplyBoard makes money from revenue-sharing agreements with colleges and universities. If a student attends a college after using their services, ApplyBoard receives a cut of the tuition. Meanwhile, the service, which helps students search and apply to schools, is free to use.

Co-founder and CEO Martin Basiri did not share specifics on revenue, but he confirmed that his company is growing its sales at a 400% year-over-year rate in 2021. For context, sales in 2019 hit $300 million, meaning that ApplyBoard is making at least $1.2 billion in sales this year.

These figures violate the prevailing edtech narrative from last year: Higher ed is dead! Students don’t want to attend college anymore. Bring back the gap year, but make it permanent!

Instead, this company is proving that the university tech stack is more lucrative than many assumed, especially if you look beyond content offerings and into back-end marketing support.

My take: Startups that help students navigate institutional bureaucracy so they can get more value out of their educational experience may become a growing focus for investors as consumer demand for virtual personalized learning increases.

‘Students want a seamless and pain-free application process’

ApplyBoard’s recent fundraising efforts shed a light on its strategy to become, effectively, a tech-savvy guidance counselor for the approximately 200,000 students that it has served to date.

The company raised a $55 million extension round in September to bring on a partner, Education Testing Services (ETS) Strategy Capital, the venture arm of the world’s largest nonprofit education testing and assessment organization. ETS helps administer the TOEFL English-language proficiency test and the GRE graduate admissions test.

The synergies there led ApplyBoard to launch ApplyProof, a service that helps admissions and immigrant officers verify documents that international students need to apply to colleges around the world. Today’s financing event similarly brings in a strategic investor, Ontario Teachers’ Pension Plan.

“The demand remains high post-pandemic and we continue to see a strong, pent-up demand from students wishing to study abroad,” Basiri said. “Students want a seamless and pain-free application process and be able to have all the information they need to make an informed decision.”

#applyboard, #career-karma, #ec-edtech, #edtech, #education, #higher-ed, #startups, #tc

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Formative, a student learning and analytics platform, raises $70M to challenge the summative, test-based approach to education

Tests are king in many school systems and other educational environments: they are seen as an efficient way to assess what knowledge students have retained, and how well they do on a level playing field where everyone has the same exam to take.

Some, however, believe that system is flawed, and today a startup that’s built a platform to provide another way of assessing and teaching is announcing a big round of funding on the heels of strong growth for its approach.

Formative — a platform for K-12 teachers to provision assignments from other digital sources and learning platforms, assess how students handle them, help them based on those results, and then use progressive assignments to build a bigger picture and how that student is acquiring knowledge — has picked up $70 million, funding that it will be using to continue expanding the reach of its platform.

The funding is being led by Summit Partners previous investors Fika Ventures, Mac Ventures and Rethink Education also participating, among others. Formative is not disclosing its valuation but this is being described as a minority investment.

More significantly, it’s a major step up for the startup, which was founded in Santa Monica, CA, back in 2011 and had raised less than $7 million before now.

The funding however matches how well the startup has been doing. On the back of a major surge of interest in digital learning tools — spurred by the Covid-19 pandemic, the subsequent closure of physical schools, and a huge shift to remote learning — Formative says that its platform is already in the majority of U.S. school districts (specifically 92% of all U.S. school districts have at least one teacher signed up); that more than four million students have engaged with “Formatives” (as the assignments are casually called); and that it is delivering annual recurring revenue growth of around 700%.

And in keeping with that momentum, Formative has a lot of ambitious plans for the funding. They include building more analytical tools for teachers and administrators as well as parents and students; taking Formative to more international markets (it’s currently most active in English-speaking countries); and more generally (and perhaps most importantly) building technology that’s helping the system rethink what a quality education might look like, what form that should take.

“One of our big goals in the future is to really help be a gateway to evaluate the rigor and effectiveness of different curriculum streams,” said Craig Jones, the CEO who co-founded Formative with Kevin McFarland (the COO), in an interview. “We’re using all the data that we’ve collected, the billions of student responses to facilitate a bigger picture, insights on student learning, to the necessary stakeholders. That can spin off into a lot of different things that we can help our schools and teachers and parents use that data to ultimately drive additional learning.”

Jones and McFarland came up with the idea for Formative the startup while working on education PhDs at UCLA, where they were looking at how different pedagogic approaches might prove to work better than traditional methods for learning. Formative the startup takes its name from the idea of formative evaluation, where teachers provide regular, sustained assessment to check on students and modify how they are teaching to help them learn. In many ways it sits in opposition to an over-reliance on summative assessment, or the idea of wrapping up learning, and evaluating, based on a final test, although in practice even a shift to more formative can still help a student better prepare for those final summative assessments.

While the idea behind formative assessments has been around for a while, the breakthrough that Jones and McFarland had was to realize that the concept could be truly scaled and expanded if it was digitized, since that would enable efficient assignment delivery, and much more data collation, visualization, communication and analytics.

That concept, of course, took on a whole new profile in the last year and a half: schools and teachers that had already invested in the idea of using more digital tools, and possibly even Formative itself, ramped up their engagement; and they were joined by a new wave of educators scrambling to fill the big gap created by schools closing to slow down the spread of Covid-19, who might have previously had a very tenuous engagement with online learning. That had a big impact on a lot of the edtech sector, with online learning companies like Kahoot also seeing a big rise in use (and taking a bigger initiative into learning management by acquiring tools like Clever), as well as a plethora of other providers.

Formative too seized the moment and set up something it called the Covid-19 Assistance Program, providing free access to its platform — which is normally priced in different tiers, starting at free for a basic service, then increasing to $12 and $17 or ‘contact us’ based on numbers of teachers using the platform that allows for more integrations, more analytics and so on. Some 5,000 teachers and schools signed up for the free service, Jones said, and McFarland noted that as schools reopened, it’s continued through in what has definitely been an evolving engagement with technology for many in the classroom. (And not all are so quick to shift: my kids’ secondary school in London still strictly forbids people using “screens” at school and in classrooms.)

“There’s been a really big shift in the U.S., where there are more devices in classrooms now than there are students,” said McFarland, who said that many are taking a hybrid approach of saying, effectively, ‘If we want to utilize this, we can utilize it but not necessarily rely on it every single day.’

“That’s where you’ll see a lot of flexibility,” he continued. “They’re using a device, not a toy. We try to work a lot in that flexible hybrid environment.”

The approach it has taken is to make its system work in as seamless a way as possible for teachers, by not only integrating with all the learning materials that are “native” to digital platforms, but also making digitized versions of the most popular publications, and those that they are using as part of their curriculum, also something the teachers can call up and assign through Formative. In that regard, it’s not a learning content company, but more of a channel for making the content that is there, more accessible and more useful. It also links up with other tools like learning management systems when they are used to create a more efficient process overall.

That’s a model that has resonated with both educators and investors.

“Formative helps to accelerate learning for students, save time for teachers and quantify results for school and district administrators,” said Tom Jennings, an MD at Summit Partners, in a statement. “We believe Formative has a rare combination of rapid, capital-efficient growth, innovative products, delighted customers and a humble, mission-driven team. We admire how Craig, Kevin and the team have built the business and expect our partnership to help Formative accelerate product enhancements and the continued global expansion of the business.” Jennings is joining Formative’s board with this round.

#e-learning, #education, #formative, #funding, #online-education, #tc

0

UBS investment makes Byju’s the most valuable startup in India

Edtech giant Byju’s has become the most valuable startup in India after raising about $350 million in a new tranche of investment from UBS Group and Zoom founder Eric Yuan, Blackstone and others that valued the Bangalore-based firm at $16.5 billion (post-money).

In a new filing, Byju’s revealed that scores of investors including Abu Dhabi government fund ADQ and Phoenix Rising had together invested about $350 million in the startup. The new valuation helps Byju’s surpass Paytm, which was last valued at $16 billion, for the crown position in the Indian startup ecosystem. (Paytm is currently working on exploring the public markets and eyeing to raise as much as $3 billion and eyeing a valuation of up to $30 billion.)

The new tranche of investment is part of a larger round that Byju’s kickstarted earlier this year and is looking to secure over $1.5 billion. Some of its recent investors also include B Capital Group and hedge fund XN. The startup was valued at $11 billion late last year, and $5.75 billion in July 2019.

The startup plans to use the fresh capital, in part, to acquire more startups. Byju’s, which acquired Indian physical coaching institute Aakash for nearly $1 billion earlier this year, is conducting due diligence to buy and online learning startup Toppr and has also engaged with U.S.-based Epic, TechCrunch reported earlier this year.

Byju’s prepares students pursuing undergraduate and graduate-level courses, and in recent years it has also expanded its catalog to serve all school-going students. Tutors on the Byju’s app tackle complex subjects using real-life objects such as pizza and cake.

The pandemic, which prompted New Delhi to enforce a months-long nationwide lockdown and close schools, accelerated its growth, and those of several other online learning startups including Unacademy and Vedantu.

As of early this year, Byju’s said it had amassed over 80 million users, 5.5 million of whom are paying subscribers. Byju’s, which is profitable, generated revenue of over $100 million in the U.S. last year, Deborah Quazzo, managing partner of GSV Ventures (which has backed the Indian startup), said at a session in March held by Indian venture fund Blume Ventures.

The startup executives said at a UBS event earlier this year that Byju’s current revenue run rate is $800 million, a figure they expect will reach $1 billion in the next 12-15 months. It has also accelerated its international expansion plans in recent months.

#asia, #byjus, #education, #funding, #india, #paytm

0

How to Think Outside Your Brain

The days when we could do it all in our heads are over.

#brain, #education, #education-k-12, #intelligence-and-intelligence-tests-iq, #memory, #philosophy, #psychology-and-psychologists

0

Tiger Global in talks to invest in Classplus at over $250 million valuation

Tiger Global is in talks to lead a $30 million round in Indian edtech startup Classplus, according to sources familiar with the matter.

The new round, which includes both primary investment and secondary transactions, values the five-year-old Indian startup at over $250 million, two sources told TechCrunch.

The new round follows another ~$30 million investment that was led by GSV recently, one of the sources said. The round hasn’t closed, so terms may change.

Classplus — which has built a Shopify-like platform for coaching centers to accept fees digitally from students, and deliver classes and study material online — also raised $10.3 million in September last year from Falcon Edge’s AWI, cricketer Sourav Ganguly and existing investors RTP Global and Blume Ventures. That round had valued Classplus at about $73 million, according to research firm Tracxn.

Classplus didn’t respond to a request for comment. Sources requested anonymity as the matter is private.

As tens of millions of students — and their parents — embrace digital learning apps, Classplus is betting that hundreds of thousands of teachers and coaching centers that have gained reputation in their neighborhoods are here to stay.

The startup is serving these hyperlocal tutoring centers that are present in nearly every nook and cranny in India. “Anyone who was born in a middle-class family here has likely attended these tution classes,” Mukul Rustagi, co-founder and chief executive of Classplus, told TechCrunch last year. “These are typically small and medium setups that are run by teachers themselves. These teachers and coaching centers are very popular in their locality. They rarely do any marketing and students learn about them through word-of-mouth buzz,” he said then.

Rustagi had described Classplus as “Shopify for coaching centers.” Like Shopify, the service does not serve as a marketplace that offers discoverability to these teachers or coaching centers. Instead, it offers a way for these teachers to leverage its tech platform to engage with customers.

This year, Tiger Global has backed — or in talks to back — about two dozen startups in India.

#apps, #asia, #classplus, #education, #funding, #india, #tiger-global

0

Nexford University lands $10.8M pre-Series A to scale its flexible remote learning platform

Two profound problems face the higher education sector globally — affordability and relevance. Whether you live in Africa, Europe, or the U.S., a major reason why people don’t go to university or college or even drop out because they cannot afford tuition fees. On the other hand, relevance shows the huge gap between what traditional universities teach and what global employers actually look for. It’s not a secret that universities focus a bit too much on theory.

Over the past few years, there has been the emergence of a number of alternative credential providers trying to provide students with the necessary skills to earn and make a living. Nexford University is one of such platforms, and today, it has a closed $10.8 million pre-Series A funding round.

Dubai-based VC Global Ventures led the new round. Other investors include Future Africa’s new thematic fund (focused on education), angel investors, and family offices. Unnamed VCs from 10 countries, including the U.S., U.K., France, Dubai, Switzerland, Qatar, Nigeria, Egypt and Saudi Arabia, also took part.

To date, Nexford has raised $15.3 million, following the first tranche of $4.5 million in seed funding raised two years ago.

Fadl Al Tarzi launched Nexford University in 2019. The tech-enabled university is filling affordability and relevance gaps by providing access to quality and affordable education.

“That way, you get the best of both worlds,” CEO Al Tarzi said to TechCrunch. “You get practical skills that you can put to work immediately or for your future career while actively keeping a job. So the whole experience is designed as a learning as a service model.”

Nexford Unversity lets students study at their own pace. Once they apply and get admitted into either a degree program or a course program, they choose how fast or slow they want the program to be.

Nexford University

Fadl Al Tarzi (CEO, Nexford University)

The CEO says whatever students learn on the platform is directly applicable to their jobs. Currently, Nexford offers undergraduate degrees in business administration; 360° marketing; AI & automation; building a tech startup; business analytics; business in emerging markets; digital transformation; e-commerce; and product management. Its graduate degrees are business administration, advanced AI, e-commerce, hyperconnectivity, sustainability, and world business.

Nexford’s tuition structure is very different from traditional universities because it’s modelled monthly. Its accredited degrees cost between $3,000 to $4,000 paid in monthly instalments. In Nigeria, for instance, an MBA costs about $160 a month, while a bachelor degree costs $80 a month. But the catch for the monthly instalment structure means the faster a learner graduates, the less they pay.

What’s it like learning with Nexford University?

Nexford University doesn’t offer standardized and theoretical tests or assignments as most traditional universities do. Al Tarzi says the company employs what he calls a competency-based education model where students prove mastery by working on practical projects.

For instance, a student working on an accounting course will most likely need to create a P&L statement, analyze balance sheets and identify where the error is to correct it. The platform then gives the student different scenarios showing companies with different revenues and expense levels. The task? To analyse and extract certain ratios to help make sense of which company is profitable and the other unit economics involved.

Though Nexford plays in the edtech space, Al Tarzi doesn’t think the company is an edtech company. As a licensed and accredited online university, Nexford has a huge amount of automation across the organization and provides students with support from faculty and career advisors.

After offering degrees, Nexford puts on its placement hats by fixing its graduates with partner employers.

There’s a big shortage of jobs in Nigeria, and despite the high unemployment, it’s actually difficult to find extremely qualified entry-level graduates. So Nexford has carried out several partnerships where employers sponsor their employees or soon-to-be employees for upskilling and rescaling purposes.

An illustration is with Sterling Bank, a local bank in the country. Most Nigerian banks have yearly routines where they hire graduates and put them on weeks-long training programs. Sterling Bank employs any candidate it feels did great after the capital intensive (eight weeks in most cases) programs.

So what Nexford has done is to partner with Sterling to fund the tuition for high school leavers. When these students go through Nexford’s programs for the first year, they begin to get part-time placements at Sterling. Upon graduation, they get a job in the bank.

“That saves Sterling the training cost and our tuition fee is almost equal to the training that they provided for students. Also, students start paying back once they get placed, so it’s a win-win.”

Nexford University has learners from 70 countries, with Nigeria its biggest market yet. Nexford also has blue-chip partnerships with Microsoft, LinkedIn Learning, and IBM to provide access to tools, courses and programmes to improve the learning experience.

One of the major gains of this learning experience is how it prepares people for remote jobs. Nexford is bullish on its virtual skills grid, where people will get jobs remotely regardless of their location on the platform.

“Across Sub Saharan Africa by the year 2026, there’s gonna be a shortage of about 100 million university seats as a result of huge growth in youth population not met by growth and supply. Even if you want to build universities fast, you wouldn’t be able to meet the demand. And that spirals down to the job market. We don’t think the local economy will produce enough jobs in Nigeria, for instance. But we want to enable people to get remote jobs across the world and not necessarily have to migrate.” 

Last year, Nexford’s revenues grew by 300%. This year, the company hopes to triple the size of its enrollment from last year, the CEO said.

Nexford is big on designing students’ curriculum based on analysis of what their employer needs. Al Tarzi tells me that the company always follow the Big Data approach, asking themselves, “how do we find out what employers worldwide are looking for and keep our curriculum alive and relevant?”

“We develop proprietary technology that enables us to analyze job vacancies as well as several other data sources; use AI to understand how those data sets and build a curriculum based on those findings. So, in short, we start with the end in mind,” he answers.

The company is keen on improving its technology regardless. It wants to analyse skills more accurately and automate more functions to enhance user experience. That’s what the funding will be used for in addition to fuelling its regional expansion plans (particularly in Asia) and investing in growth and product development. Per the latter, the online university says it will be launching partner programs with more employers globally to facilitate both placement and upskilling and rescaling. 

Merging both worlds of tech and the traditional university model is no easy feat. The former is about efficiency, user-centricity, product, among others. The latter embodies rigidity and continues to lag behind fast-paced innovation. And while there’s been a boom in edtech, most startups try to circumvent the industry’s bureaucracy by launching an app or a MOOC. Nexford’s model of running a degree-granting, licensed, accredited, and regulated university is more challenging but in it lies so much opportunity.

Iyin Aboyeji, Future Africa general partner CEO, understands this. It’s one reason why the company is the first investment out of Future Africa’s soon-to-be-launched fund focused on the future of learning and why he believes the company is a game-changer for higher education in Africa.

“During the pandemic, while many universities in Nigeria were shut down due to labour disputes, Nexford was already delivering an innovative and affordable new model of online higher education designed for a skills-based economy.”  

For general partner at Global Ventures Noor Sweid, Nexford University is redressing the mismatch between the supply of talent and the demands of today’s digital economy. “We are thrilled to partner with Fadl and the Nexford team on their journey toward expanding access to universal quality higher education in emerging markets,” she said.

#africa, #artificial-intelligence, #asia, #education, #europe, #funding, #future-africa, #higher-education, #ibm, #massive-open-online-course, #microsoft, #nexford-university, #nigeria, #online-learning, #product-management, #saudi-arabia, #tc, #tech-startup, #united-states, #university

0

Targeting ‘Critical Race Theory,’ Republicans Rattle American Schools

In a culture-war brawl that has spilled into the country’s educational system, Republicans at the local, state and national levels are trying to block curriculums that emphasize systemic racism.

#black-people, #discrimination, #education, #history-academic-subject, #race-and-ethnicity, #republican-party, #slavery-historical, #state-legislatures, #trump-donald-j, #united-states-politics-and-government

0

Wonderschool’s Chris Bennett and investor Marlon Nichols will break down the path to seed-stage funding

Extra Crunch Live is all about helping founders build better venture-backed businesses. Naturally, we do this by having candid conversations with founders and their investors.

On an upcoming episode of Extra Crunch Live, we’ll sit down with MaC Venture Capital founding managing partner Marlon Nichols and Wonderschool co-founder and CEO Chris Bennett. REGISTER HERE FOR FREE!

Not only will we discuss how they came together for Wonderschool’s seed round in 2017, but how that translated into what has become a total of $24 million in funding from VCs like a16z and First Round Capital.

We’ll also host the Extra Crunch Live Pitch-off, where folks in the audience can pitch their startup to Nichols and Bennett to get their live feedback.

Nichols is a former Kauffman Fellow and Investment Director at Intel Capital. His portfolio includes Gimlet Media, MongoDB, Thrive Market, PlayVS, Fair, LISNR, Mayvenn, Blavity and Wonderschool. Nichols knows more than most of us will ever learn about seed-stage fundraising, and even gave a chat at TechCrunch Early Stage in April that outlines four strategies for securing seed funding.

We’ll get even deeper on that subject with Nichols, and hear the perspective from the other side of the table with Bennett.

Wonderschool is a network of early childhood programs that combine the quality of top-notch early education with an in-home setting.

Bennett can talk extensively on edtech as a sector, and we’ll pick both his and Nichols’ mind on that fast-growing space.

Don’t forget that this episode will feature an Extra Crunch Live Pitch-off, so founders in the audience should be ready to “raise their hand” and get in the mix.

The episode goes down on Wednesday, June 16 at 3 p.m. ET/noon PT. Extra Crunch Live is accessible to anyone who wants to attend, but on-demand access to the content, including the entire library of ECL episodes, is reserved exclusively for Extra Crunch members. Join now to check out what Aileen Lee, Roelof Botha, Mark Cuban and more had to say on earlier episodes of ECL. 

You can register for this episode of Extra Crunch Live, with MaC Venture Capital and Wonderschool, right here.

#chris-bennett, #education, #extra-crunch-live-announcement, #mac-venture-capital, #marlon-nichols, #seed-stage, #startups, #tc, #wonderschool

0

529 Plans for College: Shop Around and Save Fees

There was big growth in account balances during the pandemic, but some states are offering promotions to attract even more savers.

#529-savings-plans, #colleges-and-universities, #content-type-service, #education, #education-k-12, #morningstar-inc, #personal-finances, #savings, #states-us, #tuition, #vanguard-group-inc

0

Dealing With Our Segregated, Jim Crow Education System

The George Floyd case may represent a milestone of progress in criminal justice. But can we expand this recognition of unfairness and inequity to other spheres?

#black-people, #discrimination, #education, #floyd-george-d-2020, #george-floyd-protests-2020, #humphreys-county-miss, #internal-revenue-service, #segregation-and-desegregation, #supreme-court-us, #tax-credits-deductions-and-exemptions

0

Liquid Instruments raises $13.7M to bring its education-focused 8-in-1 engineering gadget to market

Part of learning to be an engineer is understanding the tools you’ll have to work with — voltmeters, spectrum analyzers, things like that. But why use two, or eight for that matter, where one will do? The Moku:Go combines several commonly used tools into one compact package, saving room on your workbench or classroom while also providing a modern, software-configurable interface. Creator Liquid Instruments has just raised $13.7 million to bring this gadget to students and engineers everywhere.

Students at a table use a Moku Go device to test a circuit board.

Image Credits: Liquid Instruments

The idea behind Moku:Go is largely the same as the company’s previous product, the Moku:Lab. Using a standard input port, a set of FPGA-based tools perform the same kind of breakdowns and analyses of electrical signals as you would get in a larger or analog device. But being digital saves a lot of space that would normally go towards bulky analog components.

The Go takes this miniaturization further than the Lab, doing many of the same tasks at half the weight and with a few useful extra features. It’s intended for use in education or smaller engineering shops where space is at a premium. Combining eight tools into one is a major coup when your bench is also your desk and your file cabinet.

Those eight tools, by the way, are: waveform generator, arbitrary waveform generator, frequency response analyzer, logic analyzer/pattern generator, oscilloscope/voltmeter, PID controller, spectrum analyzer, and data logger. It’s hard to say whether that really adds up to more or less than eight, but it’s definitely a lot to have in a package the size of a hardback book.

You access and configure them using a software interface rather than a bunch of knobs and dials — though let’s be clear, there are good arguments for both. When you’re teaching a bunch of young digital natives, however, a clean point-and-click interface is probably a plus. The UI is actually very attractive; you can see several examples by clicking the instruments on this page, but here’s an example of the waveform generator:

Graphical interface for a waveform generator

Image Credits: Liquid Instruments

Love those pastels.

The Moku:Go currently works with Macs and Windows but doesn’t have a mobile app yet. It integrates with Python, MATLAB, and LabVIEW. Data goes over Wi-Fi.

Compared with the Moku:Lab, it has a few perks. A USB-C port instead of a mini, a magnetic power port, a 16-channel digital I/O, optional power supply of up to four channels, and of course it’s half the size and weight. It compromises on a few things — no SD card slot and less bandwidth for its outputs, but if you need the range and precision of the more expensive tool, you probably need a lot of other stuff too.

A person uses a Moku Go device at a desk.

Image Credits: Liquid Instruments

Since the smaller option also costs $500 to start (“a price comparable to a textbook”… yikes) compared with the big one’s $3,500, there’s major savings involved. And it’s definitely cheaper than buying all those instruments individually.

The Moku:Go is “targeted squarely at university education,” said Liquid Instruments VP of marketing Doug Phillips. “Professors are able to employ the device in the classroom and individuals, such as students and electronic engineering hobbyists, can experiment with it on their own time. Since its launch in March, the most common customer profile has been students purchasing the device at the direction of their university.”

About a hundred professors have signed on to use the device as part of their Fall classes, and the company is working with other partners in universities around the world. “There is a real demand for portable, flexible systems that can handle the breadth of four years of curriculum,” Phillips said.

Production starts in June (samples are out to testers), the rigors and costs of which likely prompted the recent round of funding. The $13.7M comes from existing investors Anzu Partners and ANU Connect Ventures, and new investors F1 Solutions and Moelis Australia’s Growth Capital Fund. It’s a convertible note “in advance of an anticipated Series B round in 2022,” Phillips said. It’s a larger amount than they intended to raise at first, and the note nature of the round is also not standard, but given the difficulties faced by hardware companies over the last year, some irregularities are probably to be expected.

No doubt the expected B round will depend considerably on the success of the Moku:Go’s launch and adoption. But this promising product looks as if it might be a commonplace item in thousands of classrooms a couple years from now.

#education, #engineering, #funding, #fundings-exits, #gadgets, #hardware, #science, #startups, #stem, #tc

0

Mapping out one edtech company’s $200M bet on lifelong learning

Mumbai-based Emeritus, an edtech company that works with universities to create online upskilling courses for employed folks, just spent a big chunk of cash to break into K-12.

Emeritus, which is part of the Eruditis group, announced today that it plans to acquire iD Tech, a STEM education service for children. The acquisition, which has not yet closed, is estimated to be around $200 million and leaves iD Tech operating as an independent brand for now.

In order to execute on lifelong learning, a company needs to be able to seamlessly transition its audiences — from high school to college to post-employment — between products.

In August, Eruditis raised a $113 million Series D from investors including Chan Zuckerberg Initiative, Sequoia India and Leeds Illuminate. Today, the startup has more than 200 programs, from bootcamps to online degree programs, that are offered to career folks in partnership with more than 50 of the world’s top universities, including MIT, Harvard and Columbia. ID Tech brings a whole different set of customers to its umbrella: The startup offers courses for elementary through high-school students across the globe taught by college students in the U.S.

The acquisition will allow Emeritus, which has been on a hiring and fundraising tear as of late, to grow beyond adult learning and well into the world of lifelong learning. It’s a trend we spotted back in a January edtech investor survey: Investors then mentioned how remote education needs to extend beyond school hours as learners become more multilayered. Edtech companies would soon have to find ways to create value for students throughout their educational experience, starting from early childhood into post-employment.

Breaking into lifelong learning sounds great, but it’s a complex goal, given that a freshman in high school learns differently than a full-time employed professional with six years of experience. Emeritus CEO and co-founder Ashwin Damera spoke to TechCrunch to explain why it makes sense from a product and revenue perspective.

“Last year we started seeing a lot of K-12 teaching moving online,” Damera said. “Then we opened our eyes and said, we used to think that this audience is not ready to learn online, but maybe we should relook at that assumption.”

The universe of universities

In order to execute on lifelong learning, a company needs to be able to seamlessly transition its audiences — from high school to college to post-employment — between products. In Emeritus’ case, Damera explained how the two companies already overlap in the middle of that chain: higher ed.

#ec-edtech, #ec-news-analysis, #edtech, #education, #higher-ed, #tc

0

Edtech stocks are getting hammered but VCs keep writing checks

After years in the backwaters of venture capital, edtech had a booming 2020. Not only did its products become must-haves after schools around the globe went remote, but investors also poured capital into leading projects. There was even some exit activity, with well-known edtech players like Coursera going public earlier this year.

But despite a rush of private capital — which has continued into this year, as we’ll demonstrate — edtech stocks have taken a hammering in recent weeks. So while venture capitalists and other startup investors are pumping more capital into the space in hopes of future outsize returns, the stock market is signaling that things might be heading in the other direction.

Who’s right? One investor that The Exchange spoke to noted that market turbulence is just that, and that he’s tuning into activity but not yet changing his investment strategy. At the same time, the recent volatility is worth tracking in case it’s a preview of edtech’s slowdown.


The Exchange explores startups, markets and money. 

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


Let’s look at the changing value of edtech stocks in recent months, parse some preliminary data via PitchBook that provides a good feel for the directional momentum of edtech venture capital, and try to see if there’s irrational exuberance among private investors.

You could argue that it’s public investors who are suffering from irrational pessimism and that private-market investors have the right to it. But since public markets price private markets, we tend to listen to them. Let’s go!

Falling shares

We’re sure that you want to get into the private-market data, so we’ll be brief in describing the public-market carnage. What follows is a digest of edtech stocks and their declines from recent highs:

  • Compared to its 52-week high, Chegg stock has lost over a third of its value.
  • After reaching $62.53 per share in April, Coursera has shed about half of its value and is trading close to its $33 IPO price.
  • 2U closed at $33.92 per share yesterday, its shares also losing half of their value compared to their 52-week high.
  • Staying on that theme, Stride (K12) closed at $26.77 per share yesterday, which is about half of its 52-week high.

    #chegg, #ec-edtech, #edtech, #education, #fundings-exits, #startups, #stock-market, #the-exchange, #venture-capital

0

Three students sue coding bootcamp Lambda School alleging false advertising and financial shenanigans

Lambda School has attracted a lot of attention, and raised some $130 million in venture funding from an impressive list of investors, for its novel approach to coding education: offering six-month virtual computer science courses for $30,000, with the option of paying for the courses in installments based on a sliding scale that only kicks in after you land a job that makes at least $50,000.

But it turns out that the startup is attracting a a lot of controversy, too. In the latest development, three students have filed lawsuits against the company in California, claiming misleading financial and educational practices.

The suits — which are being brought by the non-profit National Student Legal Defense Network on behalf of Linh Nguyen, Heather Nye and Jonathan Stickrod — go back to a period of between 2018 and 2020, and they focus on four basic claims.

First, that Lambda School falsified and misrepresented job placement rates. Second, that Lambda School misrepresented the true nature of its financial interest in student success (specifically, there are question marks over how Lambda handles its ISA contracts and whether it benefits from those). Third, that it misrepresented and concealed a regulatory dispute in California that required the school to cease operations. And fourth, that it enrolled and provided educational services and signed ISA contracts in violation of that order.

The filings for the three cases are embedded below.

The three students are all currently on the hook for their Lambda tuitions, which they opted to pay back in installments by way of the school’s income share agreement (ISA) model. The suits do not disclose how much the three individuals are seeking in damages.

For those who have been following news of Lambda School over the last several years, the claims detailed in the suit will sound familiar. The inflated job placement rates; and the fact that it wasn’t legally allowed to operate, yet was still accepting students, signing ISA deals, and teaching, for example, were all reported over that period of time, along with other criticisms about how CEO and founder Austen Allred, a self-proclaimed “growth hacker“, leveraged his and Lambda’s other Twitter accounts to hype up the school.

Some of the issues that are raised in the lawsuits have also been resolved since then. For example, the prominent display of over 80% of students finding jobs can no longer be found on the Lambda site, and in California you no longer get an ISA but a retail installment contract (similar but different). But as is the way of litigation, lawsuits based on past issues from people who were impacted by them when they were still active, are, in many ways, the next logical, unsurprising step.

There is also a specific strategy behind these three cases being filed the same time.

Alex Elson, the co-founder of the National Student Legal Defense Network, told TechCrunch in an interview that the ISA contracts that students sign at Lambda have arbitration clauses that preclude students from arbitrating against Lambda in groups, ie class action suits. The idea is that by bringing three nearly identical individual cases simultaneously against the school, the defendants can both expose the widespread practices of Lambda, and pave the way for broader relief for others similarly impacted. (The Student Defense Network’s co-counsel in the case is CalebAndonian PLLC and Cotchett Pitre & McCarthy LLP.)

Originally incubated at Y Combinator and backed by a long list of investors that include GV (Google Ventures), Gigafactory (ex-Founders Fund partners), GGV, and more, Lambda School has had a tough time of it in the last year, a period that has seen the Covid-19 pandemic have a disproportionate and impact on some parts of the economy but not others.

Edtech has largely been seen as a huge growth area, but that may not have been the case for edtech startups specifically focused on vocational, technology jobs, given that the tech world has seen a lot of hiring freezes, and layoffs, as companies sought to keep down costs in the face of the unknown.

Lambda went through two sets of layoffs in the space of a year, and it seems that in one of them it also changed its teaching model, doing away with TLs (team leads), paid mentors who helped assess students, and instead moved to a model where students mentored each other and assessed themselves. It has also changed the courses themselves, shortening them to six months from their original nine- and 18-month formats — but not reducing the prices for those courses.

And it’s not quite past all of its regulatory issues, either.

Just two weeks ago, California’s Department of Financial Protection and Innovation (DFPI) announced a settlement with the school over the language that it uses in financing contracts with students.

Specifically, the DFPI took issue with how it said Lambda falsely described its financial arrangement with students as a “qualified educational loan… subject to the limitations on dischargeability contained in… the United States Bankruptcy Code.” (Educational loans are usually exempt from bankruptcy discharge — when a debtor is not required to pay a debt because that debtor is bankrupt, it’s a bankruptcy discharge; typically educational loans are not covered by this, so the issue here was the Lambda School was claiming that even if a student files for bankruptcy that student would still have to pay back Lambda.)

“The language violates the new California Consumer Financial Protection Law (CCFPL), which took effect this year and prohibits companies from engaging in practices that are unlawful, unfair, deceptive, or abusive,” the DFPI noted.

The settlement requires Lambda to notify students that the bankruptcy dischargeability provision language is not accurate; retain a third party to review the terms of the school’s finance contract to ensure that it complies with all applicable laws; and undergo a review of its marketing materials to ensure that the information is accurate and not likely to mislead consumers.

You could say that all of these issues are the table stakes of being a startup and trying something new: the school is moving fast, breaking things, and iterating along the way to figure it all out. But for a service that can leave students liable for paying back $30,000, it’s a big price for others to pay when those things don’t quite work as advertised.

Still, despite all that, Lambda also continues to have a lot of supporters and partners. Just last month, for example, it announced a new backend engineering program that it developed with Amazon. And while it doesn’t seem guaranteed taking the problem will get you an instant open door to a job with the tech giant, it’s a sign of where there remains interesting value in the idea.

We have also reached out to the company’s CEO and founder Austen Allred, and the company itself, for a response and we will update this post as we learn more.

Updated with Lambda’s response: with the following statement:

Per policy, we don’t speak about individual student or alumni situations in detail publicly, but we’re of course happy to review matters directly and will review any cases that are filed. In general, though, for any student’s ISA payments to be activated, they would have first signed an ISA contract and subsequently landed a role leveraging skills learned at Lambda School that pays $50K or more in salary.

Our mission is to de-risk education and expand access to higher paying jobs. For that reason, our ISAs (and RICs in California) are designed with policies that are as flexible and student-centric as possible. That includes our purposely generous proration refund and proration policy for students who decide to leave the program, regardless of tuition payment method. Additionally, if an alumnus loses their job, salary, or is making under $50K a year, their payments are immediately paused. ISAs expire completely after 24 payments or 60 deferred months, even if the total paid is less than $30,000.

Our number one priority is student success. We stand behind the quality of our instructors and our proven student outcomes (which we go into more detail about here and in our outcomes reporting). While we will always strive for our students and alumni to have a positive experience and achieve their career goals, we’re also willing to work with individuals and review cases to come to a resolution.

The suits are below:

#developer, #education, #lawsuit

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Snowman, the studio behind Alto’s Adventure and others, launches a kids app company, Pok Pok

Snowman, the small studio behind award-winning iOS games Alto’s Adventure, Alto’s Odyssey, Skate City, and others, is spinning out a new company, Pok Pok, that will focus on educational children’s entertainment. Later this month, Pok Pok will debut its first title, Pok Pok Playroom, aimed at inspiring creative thinking through play for the preschool crowd.

The launch takes Snowman back to its roots as an app maker, not a games studio.

In fact, the company’s first iOS app, Checkmark, had been in the productivity space, offering location-based reminders to iPhone users. But Snowman later shifted to making games, tapping into the demand for mobile games with early launches like Circles and Super Squares. But it wasn’t until Alto’s Adventure came out that Snowman really kicked off its foray into gaming.

“We’ve never really considered Snowman to be a video game studio,” explains Snowman co-founder and Creative Director Ryan Cash. “A lot of people would assume that because it’s really all that we’re known for at the moment. It’s kind of our core business. But we like to think of ourselves more as like a team of tinkerers who like working on creative stuff. And for now, it happens to be video games, but you never know kind of what might be around the corner,” he says.

Image Credits: Snowman

Pok Pok actually emerged from Snowman’s culture of tinkering.

Snowman employees Mathijs Demaeght and Esther Huybreghts, now Pok Pok Design Director and Creative Director, respectively, went looking for an app to entertain their young son James when he was a toddler. They soon found that there weren’t many options that fit what they had been hoping to find.

They had wanted something that wouldn’t rile him up, something that wasn’t too technical, and something that wasn’t gamified, Esther explains.

When they later had their second son Jack, they decided to just built the app they wanted for themselves. After showing a rough prototype to Ryan, he saw the potential and told them to run with it.

Ryan’s sister, Melissa Cash, whose background was in developing products at Disney for babies and toddlers, had been helping with the Alto’s Odyssey launch at the time. When she saw what Esther and Mathijs were working on, she was impressed.

Image Credits: Snowman

“I’ve worked in the kid space for five years, and I’ve never seen anything that’s even remotely like this. And then, I just knew this is what I wanted to work on for the next 20 years,” she says. Melissa became involved with the project and is now CEO of the Pok Pok spinout.

Although legally a distinctive entity, Pok Pok remains closely tied to Snowman.

“We’ve been incubating the company within Snowman. We moved desks to a corner and we all work together as mentor, colleagues, and collaborate as a group,” Melissa notes. Ryan is still involved, as well. “Ryan is everything — our advisor, our helper — we haven’t even come up with a title for him,” she adds.

Today, the Pok Pok team is six full-time employees, but works with contractors and educators on its projects. Snowman, meanwhile, is over 20 people, mostly in Toronto. However, some Snowman employees spend 30% to 50% of their time on Pok Pok, Ryan says.

For the time being, Pok Pok is self-funded thanks to Snowman’s success on other fronts, which not only includes the Alto’s series, but also Apple Arcade’s Where Cards Fall and Skate City, both of which are now expanding to PC and console. The company is also working on DISTANT, a collaboration with Slingshot and Satchel.

Pok Pok Playroom, which is aimed at kids ages 2 to 6, will be the first title to go live from Pok Pok, arriving on May 20th. The app itself will initially contain six “digital toys,” so to speak, which encourage kids to creatively play. These toys also grow with the child as they age up.

For example, a stacking blocks toy could appeal to toddlers who just want to move the shapes around, but an older child might build a town with them. A drawing toy can encourage scribbles at younger ages or become a real canvas for art when the child is older. There’s also a calming toy called “musical blobs” that’s sort of like a lava lamp with differently-shaped that bounce around and respond to touches.

All the toys are designed to be open-ended — there’s no right or wrong way to use them. And Pok Pok Playroom is not a game. There are no levels to beat or objectives to achieve. There’s nothing to buy.

What is different about Pok Pok Playroom, compared with games and “digital toys” from rivals like Toca Boca, for example, is that it’s designed to be more educational and realistic.

“We take a more educational approach, and we still plan to do that for future apps and for whatever Pok Pok Playroom will grow into after launch,” says Esther. “For example, we have no unicorns or no wizards in Pok Pok Playroom. Everything is grounded in reality. I think we want to explore with children what the world looks like and how it works. We have tons of ideas for taking a more education-based approach for all the children, as well, that isn’t necessarily the ABCs, 1,2,3’s pedagogical, so to speak.”

Image Credits: Snowman

Pok Pok also won’t use talking animals or fantasy characters in order to avoid the subject of diversity. Instead, its apps will features all races, all genders, all family constructs, all different sorts of abilities and disabilities, as they’re built.

“I think it’s very important to us to have kids be able to recognize themselves, and family members and friends in the app,” says Esther. “It’s really important to our entire team that everyone feels respected in who they are and what their family looks like, and… I think that’s still really lacking in the kid space right now. We want to be the front-runner there,” she notes.

The new app, which has been in development for nearly three years, will be priced on a subscription basis with more “digital toys” added over time.

Though Pok Pok will aim more at the preschool crowd, the company envisions a future where it designs creative projects for the next age group up and for other types of learning.

Pok Pok Playroom has been beta tested with around 250 families ahead of its launch.

It will be available on iPhone and iPad starting on May 20th at 9 AM ET, with a 14-day free trial. It will then be priced at $3.99 per month or $29.99 per year, and will not feature in-app purchases.

 

#altos-odyssey, #altos-adventure, #apple, #apps, #education, #families, #gaming, #ios-apps, #iphone, #kids, #mobile, #parents, #ryan-cash, #snowman, #tc, #video-games, #video-gaming

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StuDocu raises $50M as its note-sharing network for college students passes 15M users

Whether learning online or taking a class in person, every student knows all too well how important it is to have good notes from your classes as a key way to remember and apply what you’ve been taught. Now, an Amsterdam-based startup called StuDocu, which has built a big and profitable business by way of a platform to help source and share the best student-created class notes, is announcing $50 million in funding on the heels of huge growth — a sign of demand and opportunity in the space.

The Series B is coming from Partech, the French VC, and it comes as StuDocu is gaining some critical mass: the startup says it now reaches 15 million users across 2,000 universities in 60 countries. What’s notable about that scale is not just the size but the fact that it had been achieved while the company was previously largely bootstrapped: Both PitchBook and Crunchbase note only about $1.5 million raised before now, but in fact CEO Marnix Broer tells me that it had quietly raised just under $10 million before now with previous investors including Piton Capital, Peak Capital and Point Nine Capital.

A lot of the focus in edtech in the last year of Covid-19 living has been on technology that helps people learn remotely as well (or maybe even better) than they might have done in more traditional, physical environments: improved streaming experiences, better approaches for teaching via a screen, tools for managing the experience, and so on. StuDocu both fits that mold, but also, in a way, is a throwback to the more basic approach we associate with learning: sitting in a class and taking notes during the lessons.

That was the environment in which four students came together and first formed StuDocu.

In the Netherlands, where StuDocu is based, a large amount of one’s evaluation in an undergraduate class is based on how you do in the final exams, and so the notes have perhaps even more disproportionate value.

CEO Marnix Broer, along with his friends Jacques Huppes, Lucas van den Houten and Sander Kuijk, saw an opportunity while still students back in 2013 to leverage the power of the internet and crowdsourcing, to make it easier for people who were studying the same course at university to connect together online and help each other by uploading notes from their courses and exchanging them with each other — the power of many being one way of better covering your bases in the knowledge department.

(Huppes has stepped away from the company in an active role but remains an advisor, the other two are still there, Broer said.)

Initially the product was “completely free,” he said, and was organically a popular enough concept that it not only picked up users at their university in Delft, but also a number of other schools. Then, as the founders approached graduation, “we decided we needed to earn some money,” and with the concept still going strong, they turned their attention to making their tool into a business.

Through a couple of iterations, “We finally came up with trying to keep as much free as we can in a freemium model,” Broer said. In StuDocu’s case, using the data they had amassed about how much certain documents were viewed, downloaded and recommended over others, they created a top 20% of all documents, which were labelled premium, “so you either upload your own docs or pay a small subscription fee to access them.” Conversely, this also means that 80% of documents on the site are all still free.

StuDocu also built a few pieces of technology into its platform to help fight against scammers or people trying to game it: the only users who it now measures to determine what is premium content are premium users themselves, who do not get any indication of what is premium content on the site and what is not, and are more likely more serious and heavier users of StuDocu.

“We want the best quality documents to stay up and the rest to drift down the pile, so that our users only experience great notes,” he said. “But we know if a few upload garbage we haven’t lost money on it. We just gave access for free and should not have. At the end of the day, it’s a community and we believe that will ensure the quality stays high.” They also incentivise people to review documents with lottery tickets and other rewards.

And it has increasingly been adding in more ways of scanning materials to determine that what people are submitting are actual notes about the subject at hand, rather than blank documents or random unrelated writing. A recent search partnership with Algolia, Broer said, should also help with more granualar document searches, rather than simply searching by university and course to find materials.

It’s a compelling business model that helps square the issue that a lot of user-generated content sites have, which is that the vast majority are consumers rather than creators. Broer said that currently some 15% of its users pay for the service, 15% access it by uploading content, and 70% of its base are using it free and not uploading anything.

Through its gradual building up of a business from a tool that they built to help themselves, StuDocu went, Broer said, from “working in a squat“, to taking a small and cheap space with interns, to what Broer describes “a normal office.”

There are a number of other edtech companies that have identified the potential of providing platforms for students to help each other with learning. Brainly, another big one out of Europe (specifically Poland) built its concept not around notes but students helping each other answer homework questions, similar to Chegg. NexusNotes out of Australia also has built a platform aimed at amassing notes; Academia includes not just notes but also research papers; Docsity also focuses on both class notes and papers. StudySmarter also out of Europe also brings in notes but also applies AI to shape a person’s learning progress.

Perhaps the most similar and StuDocu’s biggest competitor of all is Course Hero out of the U.S., which is now valued at around $1.1 billion (a notable number here too, since StuDocu is not disclosing valuation).

“We consider ourselves the leading global player,” Broer noted, with more than 30 local languages supported across its catalog of courses and notes.

“We help millions of students and have millions of documents, but at the same time we consider ourselves a hyper-local marketplace,” he added. “Three hundred people who are on the same law course can now communicate and share knowledge with each other.”

This funding will be an interesting test of both extending that hyper-local concept to more places, but also tapping into opportunities where the help that might come could have a much bigger impact.

In the UK, for example, going down another age bracket younger than university to students of high school age (14 and up), the majority of them are studying to prepare for two sets of tests, GCSEs that you take in year 11 (aged 16/17 usually) and A-Levels you take in year 13 (18/19 years old), both based around very specific subjects and thus based on very particular curriculums that literally the whole country studies together. That is to say, even if individual schools or teachers might have different approaches or teach better or worse, at the end of the day, all the students will be taking the same examinations in their specified subjects.

This presents an interesting opportunity to a company like StuDocu, which could build a much bigger network of users as a result on an even smaller proportion of contributed, strong notes (since more of the users will all be needing the same materials). This is also a model used in other places, and Broer said StuDocu is well on its way to testing and slowly expanding in specifically these kinds of markets at the moment.

And you could argue that even if standardized tests were not a part of the equation, students will want better notes to use for other kinds of coursework, such as essay writing, or simply to help retain knowledge as they continue to learn. With some 200 million people currently in university education, there are a lot of opportunities to find variations on the premise.

There might also be possibilities down the line to work more closely also with universities to build out the course materials — also a big area considering that a lot of professors already provide notes for their lectures to students — although Broer said that for now its focus is remaining on students and their needs, since in many cases professors still do not do this.

It’s for all of these reasons that investors are there for StuDocu’s funding.

“StuDocu is a platform already helping millions of students around the world, and we’re excited to partner with this talented team in their mission to make education more accessible to all.” comments Bruno Crémel, a general partner at Partech, in a statement. “When we met the team at StuDocu, we were wildly impressed with their data-driven culture and by how much students really love using their services. We look forward to working closely with Marnix and his team as they accelerate StuDocu’s global expansion and develop even more innovative ways to support students in meeting their learning goals.”

#amsterdam, #education, #europe, #funding, #notes, #studocu, #university

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The human-focused startups of the hellfire

Disasters may not always be man-made, but they are always responded to by humans. There’s a whole panoply of skills and professions required today to respond to even the tiniest emergency, and that doesn’t even include the needs during pre-disaster planning and post-disaster recovery. It’s not a very remunerative industry for most and the mental health effects from stress can linger for decades, but the mission at the core of this work — to help people in the time of their greatest need — is what continues to attract many to partake in this never-ending battle anyway.

In the last three parts of this series on the future of technology and disaster response, I’ve focused on, well, technology, and specifically the sales cycle for new products, the sudden data deluge now that Internet of Things (IoT) is in full force, and the connectivity that allows that data to radiate all around. What we haven’t looked at enough so far is the human element: the people who actually respond to disasters as well as what challenges they face and how technology can help them.

So in this fourth and final part of the series, we’ll look at four areas where humans and technology intersect within disaster response and what future opportunities lie in this market: training and development, mental health, crowdsourced responses to disasters, and our doomsday future of hyper-complex emergencies.

Training in a hellfire

Most fields have linear approaches to training. To become a software engineer, students learn some computer science theory, add in some programming practice, and voilà (note: your mileage may vary). To become a medical doctor, aspiring physicians take an undergraduate curriculum teeming with biology and chemistry, head to medical school for two deadened years of core anatomy and other classes and then switch into clinical rotations, a residency, and maybe fellowships.

But how do you train someone to respond to emergencies?

From 911 call takers to EMTs and paramedics to emergency planning officials and the on-the-ground responders who are operating in the center of the storm as it were, there are large permutations in the skills required to do these jobs well. What’s necessary aren’t just specific hard skills like using call dispatch software or knowing how to upload video from a disaster site, but also critically-important softer skills as well: precisely communicating, having sangfroid, increasing agility, and balancing improvisation with consistency. The chaos element also can’t be overstated: every disaster is different, and these skills must be viscerally recombined and exercised under extreme pressure with frequently sparse information.

A whole range of what might be dubbed “edtech” products could serve these needs, and not just exclusively for emergency management.

Communications, for instance, isn’t just about team communications, but also communicating with many different constituencies. Aaron Clark-Ginsberg, a social scientist at RAND Corporation, said that “a lot of these skills are social skills — being able to work with different groups of people in culturally and socially appropriate ways.” He notes that the field of emergency management has heightened attention to these issues in recent years, and “the skillset we need is to work with those community structures” that already exist where a disaster strikes.

As we’ve seen in the tech industry the last few years, cross-cultural communication skills remain scarce. One can always learn this just through repeated experiences, but could we train people to develop empathy and understanding through software? Can we develop better and richer scenarios to train emergency responders — and all of us, really — on how to communicate effectively in widely diverging conditions? That’s a huge opportunity for a startup to tackle.

Emergency management is now a well-developed career path. “The history of the field is very fascinating, [it’s] been increasingly professionalized, with all these certifications,” Clark-Ginsberg said. That professionalization “standardizes emergency response so that you know what you are getting since they have all these certs, and you know what they know and what they don’t.” Certifications can indicate singular competence, but perhaps not holistic assessment, and it’s a market that offers opportunities for new startups to create better assessments.

Like many of us, responders get used to doing the same thing over and over again, and that can make training for new skills even more challenging. Michael Martin of emergency data management platform RapidSOS describes how 911 call takers get used to muscle memory, “so switching to a new system is very high-risk.” No matter how bad existing software interfaces are, changing them will very likely slow every single response down while increasing the risk of errors. That’s why the company offers “25,000 hours a year for training, support, integration.” There remains a huge and relatively fragmented market for training staff as well as transitioning them from one software stack to another.

Outside these somewhat narrow niches, there is a need for a massive renaissance in training in this whole area. My colleague Natasha Mascarenhas recently wrote an EC-1 on Duolingo, an app designed to gamify and entrance students interested in learning second languages. It’s a compelling product, and there is no comparative training system for engaging the full gamut of first responders.

Art delaCruz, COO and president of Team Rubicon, a non-profit which assembles teams of volunteer military veterans to respond to natural disasters, said that it’s an issue his organization is spending more time thinking about. “Part of resilience is education, and the ability to access information, and that is a gap that we continue to close on,” he said. “How do you present information that’s more simple than [a learning management system]?” He described the need for “knowledge bombs like flash cards” to regularly provide responders with new knowledge while testing existing ideas.

There’s also a need to scale up best practices rapidly across the world. Tom Cotter, director of emergency response and preparedness at Project Hope, a non-profit which empowers local healthcare workers in disaster-stricken and impoverished areas, said that in the context of COVID-19, “a lot of what was going to be needed [early on] was training — there were huge information gaps at the clinical level, how to communicate it at a community level.” The organization developed a curriculum with Brown University’s Watson Institute in the form of interactive PowerPoints that were ultimately used to train 100,000 healthcare workers on the new virus, according to Cotter.

When I look at the spectrum of edtech products existing today, one of the key peculiarities is just how narrow each seems to focus. There are apps for language learning and for learning math and developing literacy. There are flash card apps like Anki that are popular among medical students, and more interactive approaches like Labster for science experiments and Sketchy for learning anatomy.

Yet, for all the talk of boot camps in Silicon Valley, there is no edtech company that tries to completely transform a student in the way that a bona fide boot camp does. No startup wants to holistically develop their students, adding in hard skills while also advancing the ability to handle stress, the improvisation needed to confront rapidly-changing environments, and the skills needed to communicate with empathy.

Maybe that can’t be done with software. Maybe. Or perhaps, no founder has just had the ambition so far to go for broke — to really revolutionize how we think about training the next generation of emergency management professionals and everyone else in private industry who needs to handle stress or think on their feet just as much as frontline workers.

That’s the direction where Bryce Stirton, president and co-founder of public-safety company Responder Corp, has been thinking about. “Another area I am personally a fan of is the training space around VR,” he said. “It’s very difficult to synthesize these stressful environments,” in areas like firefighting, but new technologies have “the ability to pump the heart that you need to experience in training.” He concludes that “the VR world, it can have a large impact.”

Healing after disaster

When it comes to trauma, few fields face quite the challenge as emergency response. It’s work that almost by definition forces its personnel to confront some of the most harrowing scenes imaginable. Death and destruction are given, but what’s not always accounted for is the lack of agency in some of these contexts for first responders — the family that can’t be saved in time so a 911 call taker has to offer final solace, or the paramedics who don’t have the right equipment even as they are showing up on site.

Post-traumatic stress is perhaps the most well-known and common mental health condition facing first responders, although it is hardly the only one. How to ameliorate and potentially even cure these conditions represents a burgeoning area of investment and growth for a number of startups and investors.

Risk & Return, for instance, is a venture firm heavily focused on companies working on mental health as well as human performance more generally. In my profile of the firm a few weeks ago, managing director Jeff Eggers said that “We love that type of technology since it has that dual purpose: going to serve the first responder on the ground, but the community is also going to benefit.”

Two examples of companies from its portfolio are useful here to explore as examples of different pathways in this category. The first is Alto Neuroscience, which is a stealthy startup founded by Amit Etkin, a multidisciplinary neuroscientist and psychiatrist at Stanford, to create new clinical treatments to post-traumatic stress and other conditions based on brainwave data. Given its therapeutic focus, it’s probably years before testing and regulatory approvals come through, but this sort of research is on the cutting-edge of innovation here.

The second company is NeuroFlow, which is a software startup using apps to guide patients to better mental health outcomes. Through persistent polling, testing, and collaboration with practitioners, the company’s tools allow for more active monitoring of mental health — looking for emerging symptoms or relapses in even the most complicated cases. NeuroFlow is more on the clinical side, but there are obviously a wealth of wellness startups that have percolated in recent years as well like Headspace and Calm.

Outside of therapeutics and software though, there are entirely new frontiers around mental health in areas like psychedelics. That was one of the trends I called out as a top five area for investment in the 2020s earlier this year, and I stand by that. We’ve also covered a startup called Osmind which is a clinical platform for managing patients with a psychedelic focus.

Risk & Return itself hasn’t made an investment in psychedelics yet, but Bob Kerrey, the firm’s board chairman and the former co-chair of the 9/11 Commission as well as former governor and senator of Nebraska, said that “it’s difficult to do this if you are the government, but easier to do this in the private sector.”

Similar to edtech, mental health startups might get their start in the first responder community, but they are hardly limited to this population. Post-traumatic stress and other mental health conditions affect wide swaths of the world’s population, and solutions that work in one community can often translate more broadly to others. It’s a massive, massive market, and one that could potentially transform the lives of millions of people for the better.

Before moving on, there’s one other area of interest here, and that is creating impactful communities for healing. First responders and military veterans experience a mission and camaraderie in their service that they often lack once they are in new jobs or on convalescence. DelaCruz of Team Rubicon says that one of the goals of bringing veterans to help in disaster regions is that the veterans themselves “reconnect with identity and community — we have these incredible assets in these men and women who have served.” It’s not enough to just find a single treatment per patient — we oftentimes need to zoom out to the wider population to see how mental health ripples out.

Helping people find purpose may not be the easiest challenge to solve as a startup, but it’s certainly a major challenge for many, and an area fermenting with new approaches now that the the social networking wave has reached its nadir.

Crowdsourcing disaster response

Decentralization has been all the rage in tech in recent years — just mention the word blockchain in a TechCrunch article to get at least 50 PR emails about the latest NFT for a toilet stain. While there is obviously a lot of noise, one area where substance may pan out well is in disaster response.

If the COVID-19 pandemic showed anything, it was the power of the internet to aggregate as well as verify data, build dashboards, and deliver highly-effective visualizations of complex information for professionals and laypeople alike. Those products were developed by people all around the world often from the comfort of their own homes, and they demonstrate how crowds can quickly draft serious labor to help respond to crises as they crop up.

Jonathan Sury, project director at the National Center for Disaster Preparedness at the Earth Institute at Columbia University, said that “COVID has really blown so much of what we think about out of the water.” With so many ways to collaborate online right now, “that’s what I would say is very exciting … and also practical and empowering.”

Clark-Ginsberg of RAND calls it the “next frontier of disaster management.” He argues that “if you can use technology to broaden the number of people who can participate in disaster management and respond to disasters,” then we might be reaching an entirely new paradigm for what effective disaster response will look like. “Formal structures [for professional frontline workers] have strengthened and that has saved lives and resources, but our ability to engage with everyday responders is still something to work on.”

Many of the tools that underpin these crowdsourced efforts don’t even focus on disasters. Sury pointed to Tableau and data visualization platform Flourish as examples of the kinds of tools that remote, lay first responders are using. There are now quite robust tools for tabular data, but we’re still relatively early in the development of tools for handling mapping data — obviously critical in the crisis context. Unfolded.ai, which I profiled earlier this year, is working on building scalable geospatial analytics in the browser. A lot more can be done here.

Oftentimes there are ways to coordinate the coordinators. Develop for Good, which I looked at late last year, is a non-profit designed to connect enterprising computer science students to software and data projects at non-profits and agencies that needed help during the pandemic. Sometimes these coordinators are non-profit orgs, and sometimes, just very active Twitter accounts. There’s a lot more experimentation possible on how to coordinate efforts in a decentralized way while still engaging with professional first responders and the public sector.

Speaking of decentralization, it’s even possible that blockchain could play a role in disaster and crisis response. Many of these opportunities rest on using blockchain for evidence collection or for identity. For example, earlier this week Leigh Cuen took a careful look at an at-home sexual assault evidence collection kit from Leda Health that uses the blockchain to establish a clear time for when a sample was collected.

There is a lot more potential to harness the power of crowdsourcing and decentralization, and many of these projects have applications far outside disaster management itself. These tools not only solve real problems — they provide real community to people who may not be related to the disaster itself, but are enthusiastic to do their part to help others.

The black swans of black swans

In terms of startups, the three markets I identified — better training, better mental health, and better crowdsourcing collaboration tools, particularly around data — collectively represent a very compelling set of markets that will not only be valuable for founders, but can rapidly improve lives.

In his book Normal Accidents, Charles Perrow talks about how an increasing level of complexity and coupledness in our modern technical systems all but guarantee disasters to occur. Add in a warming world as well as the intensity, frequency, and just plain unusualness of disasters arriving each year, and we are increasingly seeing entirely novel forms of emergencies we have never responded to before. Take most recently the ultra-frigid conditions in Texas that sapped power from its grid, leading to statewide blackouts for hours and days in some parts of the state.

Clark-Ginsberg said, “We are seeing these risks emerge that aren’t just typical wildfires — where we have a response structure that we can easily setup and manage the hazard, [we’re] very good at managing these typical disasters. There are more of these atypical disasters cropping up, and we have a very hard time setting up structures for this — the pandemic is a great example of that.”

He describes these challenges as “trans-boundary risk management,” disasters that cross bureaucratic lines, professions, societies, and means of action. “It takes a certain agility and the ability to move quickly and the ability to work in ways outside typical bureaucratic structures, and that is just challenging full stop,” he said.

The Future of Technology and Disaster Response

Even as we begin to have better point solutions to the individual problems that disasters and their responses require, we can’t be remiss in neglecting the more systematic challenges that these emergencies are bringing to the fore. We have to start thinking about bringing humans together faster and in more novel ways to be the most effective, while coupling them flexibly and with agility to the best tools that meet their needs in the moment. That’s probably not literally “a startup,” but more a way of thinking about what it means to construct a disaster response fresh given the information available.

Amanda Levin, a policy analyst at the Natural Resources Defense Council, said that “even if we mitigate, there are huge pressures and huge impacts today from a warming world … even if we stop emissions today, [they] will still persist.” As one of my interviewees in government service who asked to go unnamed noted about disaster response, “You always are coming up short somewhere.” The problems are only getting harder, and we humans need much better tools to match the man-made trials we created for ourselves. That’s the challenge — and opportunity — for a tough century ahead.

#anki, #bob-kerrey, #calm, #disaster, #disaster-response, #duolingo, #education, #emergency-management, #enterprise, #government, #headspace, #health, #jeff-eggers, #michael-martin, #policy

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Extra Crunch roundup: How Duolingo became an edtech leader

The pandemic has just pushed edtech mainstream, but language-learning startup Duolingo had already spent the past decade figuring out how to build a successful edtech app.

In our latest installment of the EC-1 series, Natasha Mascarenhas goes deep with the company to understand how it found product-market fit, then figured out how to grow like a consumer tech startup and monetize like a SaaS startup. After a record 2020, the Pittsburgh-based company also opened up about its plans for the future, including a focus on speaking a new language (in addition to listening, reading and writing).

Here’s more from Natasha about what’s inside:

Want this kind of coverage on a different company or sector. Check out our ever-growing list of EC-1s, which include recent profiles of Klaviyo, StockX, Tonal and more.

Thanks for reading!

Eric Eldon
Managing Editor, Extra Crunch (subbing in for Walter again)

Amid the IPO gold rush, how should we value fintech startups

Fairy dust flying in gold light rays. Computer generated abstract raster illustration

Image Credits: gonin / Wikimedia Commons

If there has ever been a golden age for fintech, it surely must be now.

As of Q1 2021, the number of fintech startups in the U.S. crossed 10,000 for the first time ever — well more than double that if you include EMEA and APAC. There are now three fintech companies worth more than $100 billion (Paypal, Square and Shopify) with another three in the $50 billion-$100 billion club (Stripe, Adyen and Coinbase).

Yet, as fintech companies have begun to go public, there has been a fair amount of uncertainty as to how these companies will be valued on the public markets. This is a result of fintechs being relatively new to the IPO scene compared to their consumer internet or enterprise software counterparts. Furthermore, fintechs employ a wide variety of business models: Some are transactional, while others are recurring or have hybrid business models.

And fintechs now have a multitude of options in terms of how they choose to go public. They can take the traditional IPO route, pursue a direct listing or merge with a SPAC. Given the multitude of variables at play, valuing these companies and then predicting public market performance is anything but straightforward.

How to attract large investors to your direct investing platform

Image Credits: princessdlaf (opens in a new window)/ Getty Images

Many fintech startups have tried to become a market-maker between investors and investment opportunities.

However, the challenge with this two-sided market is: How do you get the investors to show up?

It’s hard enough to get retail investors, but family offices and other large check writers are even more challenging to lure.

Analytics as a service: Why more enterprises should consider outsourcing

Image Credits: anyaberkut (opens in a new window) / Getty Images

With an increasing number of enterprise systems, growing teams, a rising proliferation of the web and multiple digital initiatives, companies of all sizes are creating loads of data every day.

This data contains excellent business insights and immense opportunities, but it has become impossible for companies to derive actionable insights from this data consistently due to its sheer volume.

The analytics-as-a-service (AaaS) market is expected to grow to $101.29 billion by 2026. Organizations that have not started on their analytics journey or are spending scarce data engineer resources to resolve issues with analytics implementations are not identifying actionable data insights.

Through AaaS, managed services providers (MSPs) can help organizations get started on their analytics journey immediately without extravagant capital investment.

MSPs can take ownership of the company’s immediate data analytics needs, resolve ongoing challenges, and integrate new data sources to manage dashboard visualizations, reporting and predictive modeling — enabling companies to make data-driven decisions every day.

Will fintech unicorn Flywire’s proposed IPO reach escape velocity?

Flywire, a Boston-based magnet for venture capital, filed to go public Monday.

Flywire is a global payments company that attracted more than $300 million as a startup, according to Crunchbase, most recently raising a $60 million Series F last month. We don’t have its most recent valuation, but PitchBook data indicates that the company’s February 2020, $120 million round valued Flywire at $1 billion on a post-money basis.

So what we’re looking at here is a fintech unicorn IPO. A great way to kick off the week, to be honest, though we thought that Robinhood would be the next such debut.

Fintech venture capital activity has been hot lately, which makes the Flywire IPO interesting. Its success or failure could dictate the pace of fintech exits and fintech startup valuations in general, so we have to care about it.

First, what does Flywire do and with whom does it compete? Then, a closer look at its financial results as we hope to get our hands around its revenue quality, aggregate economics and growth prospects.

After that, we’ll discuss valuations and which venture capital groups are set to do well in its flotation.

As Q2’s lull fades, unicorn IPOs are revving up

If it feels like IPO news slowed for a few weeks at the start of the second quarter, your gut is correct. Investors previously told The Exchange that the first, third and fourth quarters of 2021 would be hot periods for public debuts, but that Q2 would be slower. Their argument revolved around reporting cadences and how long it takes for certain periods of accounting work to be completed.

So we weren’t surprised when the second quarter’s IPO cycle began to feel a bit soft compared to the rapid-fire first quarter. And, as we’ve all heard in recent days, the great SPAC rush is slowing.

But that hasn’t stopped a number of firms from defying expectations and going public all the same.

SAP CEO Christian Klein looks back on his first year

SAP CEO Christian Klein

Image Credits: SAP

SAP CEO Christian Klein was appointed co-CEO with Jennifer Morgan in October 2019. He became sole CEO just as the pandemic was hitting full force across the world last April.

He was put in charge of a storied company at 39 years old. By October, its stock price was down and revenue projections for the coming years were flat.

That is definitely not the way any CEO wants to start their tenure, but the pandemic forced Klein to make some decisions to move his customers to the cloud faster. That, in turn, had an impact on revenue until the transition was completed. While it makes sense to make this move now, investors weren’t happy with the news.

There was also the decision to spin out Qualtrics, the company his predecessor acquired for $8 billion in 2018. As he looked back on the one-year mark, Klein sat down with TechCrunch to discuss all that has happened and the unique set of challenges he faced.

Forerunner’s Eurie Kim and Oura’s Harpreet Rai discuss betting on consumer hardware

Image Credits: Forerunner Ventures / Oura

Forerunner General Partner Eurie Kim and Oura CEO Harpreet Rai joined us on Extra Crunch Live to discuss the process of taking Oura to the next level — and beyond — as the product found a second (or third) life during the pandemic through partnerships with sports leagues like the NBA.

And as we’re wont to do, we asked the pair to take a look at a handful of user-submitted pitch decks.

How to break into Silicon Valley as an outsider

Full length of young courageous man climbing on green circles against white background

Image Credits: Klaus Vedfelt (opens in a new window) / Getty Images

Domm Holland, co-founder and CEO of e-commerce startup Fast, appears to be living a founder’s dream.

His big idea came from a small moment in his real life. Holland watched as his wife’s grandmother tried to order groceries, but she had forgotten her password and wasn’t able to complete the transaction.

He built a prototype of a passwordless authentication system where users would fill out their information once and would never need to do so again. Within 24 hours, tens of thousands of people had used it.

Shoppers weren’t the only ones on board with this idea. In less than two years, Holland has raised $124 million in three rounds of fundraising, bringing on partners like Index Ventures and Stripe.

Although the success of Fast’s one-click checkout product has been speedy, it hasn’t been effortless.

For one thing, Holland is Australian, which means he started out as a Silicon Valley outsider.

Holland talks about how he built his network, why it’s important — not just for fundraising but for building the entire business — and how to avoid the mistakes he sees new founders make.

Revel’s Frank Reig shares how he built his business and what he’s planning

founders series-Frank-reig-revel

Image Credits: Bryce Durbin

It’s only been three years since they hit the streets, but Revel’s blue electric mopeds have already become a common sight in New York, San Francisco and a growing number of U.S. cities.

However, Revel founder and CEO Frank Reig set his sights far beyond building a shared moped service.

In fact, since the beginning of 2021, Revel has launched an e-bike subscription service, an EV charging station venture and an all-electric rideshare service driven by a fleet of 50 Teslas.

We caught up with Reig to talk about what he learned from building the company, how Revel’s business strategy has evolved and what lies ahead.

Brex, Ramp tout their view of the future as Divvy is said to consider a sale to Bill.com

Credit cards, computer illustration.

Image Credits: KTSDESIGN/SCIENCE PHOTO LIBRARY / Getty Images

Divvy, a Utah-based corporate spend unicorn, is considering selling itself to Bill.com for a price that could top $2 billion. For the fintech sector, it’s big news.

Corporate spend startups including Ramp and Brex are raising rapid-fire rounds at ever-higher valuations and growing at venture-ready cadences. Their growth and the resulting private investment were earned by a popular approach to offering corporate cards, and, increasingly, the group’s ability to build software around those cards that took into account a greater portion of the functionality that companies needed to track expenses, manage spend access and, perhaps, save money.

It makes sense to see Bill.com decide to take on the yet-private corporate spend startups that are playing the field; why not absorb a growing customer base and fend off competition in a single move?

To get a better handle on how the startups that compete with Divvy feel about the deal, TechCrunch reached out to both Ramp CEO Eric Glyman, and Brex CEO Henrique Dubugras.

4 strategies for building a digital health unicorn

Image of a stuffed unicorn sitting in a hospital bed hooked up to an IV

Image Credits: Huber & Starke (opens in a new window) / Getty Images

It’s an entrepreneur’s market in digital health today, with startups raising record-breaking funding at soaring valuations and debuting on public markets to eager investors.

The massive influx of capital to healthcare should not be surprising; the pandemic has made it starkly clear that digital health is the future of healthcare.

To that end, we should anticipate additional healthcare exits worth more than $1 billion in the near term. Which again, is great for entrepreneurs — as long as they understand how hard it is to build a unicorn in healthcare. Today, becoming a unicorn requires founders who are long on vision and operational experience.

During the pandemic, lots of investors jumped in to invest in digital health for the first time. But we’ve been investing for more than a decade.

Here are four instrumental strategies to building a unicorn in digital health that we know work.

One CMO’s honest take on the modern chief marketing role

A CMO's role

Image Credits: Matthias Kulka / Getty Images

There’s no shortage of commentary around the chief marketing officer title these days, and certainly no lack of opinions about the role’s responsibilities and meaning within a company.

There’s a reason for that. CMO is the shortest tenured C-suite role — the average tenure of a CMO is the lowest of all C-suite titles at 3.5 years.

That’s because the chief marketing officer’s role is increasingly complex. Qualifications require broad, strategic thinking while also maintaining tactical acumen across several functions. There’s a big disparity in what companies expect from CMOs. Some want a strategist with an eye for go-to-market planning, while others want a focus on close alignment with sales in addition to brand awareness, content strategy and lead generation.

Other companies want their CMO to emphasize product marketing and management. Ask 10 CMOs how they define their role and you’ll get 10 different answers.

Here, a tenured CMO shares his honest take on what the role actually means, plus the key attributes of today’s modern CMO.

Despite gains, gender diversity in VC funding struggled in 2020

People have been discussing the importance of expanding opportunities for women in venture capital and startup entrepreneurship for decades. And for some time it appeared that progress was being made in building a more diverse and equitable environment.

The prospect of more women writing checks was viewed as a positive for female founders, a cohort that has struggled to attract more than a fraction of the funds that their male peers manage. All-female teams have an especially tough time raising capital compared to all-male teams, underscoring the disparity.

Then COVID-19 arrived and scrambled the venture and startup scene, creating a risk-off environment during the end of Q1 and the start of Q2 2020. Following that, the venture world went into overdrive as software sales became a safe harbor in the business world during uncertain economic times. And when it became clear that the vaunted digital transformation of businesses large and small was accelerating, more capital appeared.

But data indicate that the torrent of new capital has not been distributed equally — indeed, some of the progress that female founders made in recent years may have eroded.

How to make sure your legal team is M&A ready

Image of chess pawns forming a king crown cast shadow to represent a merger.

Image Credits: wildpixel (opens in a new window) / Getty Images

When it comes to acquiring or merging a business with another, it’s imperative that decision-makers know why they’re pursuing a deal and its potential impact on the company, good and bad.

Mergers and acquisitions (M&A) may indeed be the best route to success, but there’s a lot of room for problems, and many leaders underestimate the role in-house legal teams can play in mitigating these problems and facilitating progress until they’re locked into a deal.

And that’s when issues become much more difficult to resolve and plans unravel.

While a CEO and board might fully appreciate in-house counsel, it’s equally important the team is supported across a company — from marketing to product development — in order to ensure an efficient closing and successful integration. The best way to do that is by bringing in-house counsel into the process early and often.

Beyond the fanfare and SEC warnings, SPACs are here to stay

The rise of SPACs

Image Credits: erhui1979 / Getty Images

The number of SPACs in the deep tech sector was skyrocketing, but a combination of increased SEC scrutiny and market forces over the past few weeks has slowed the pace of new SPAC transactions.

The correction is an inevitable step on the path to mainstreaming SPACs as an alternative to IPOs, but it won’t cause them to go away.

Instead, blank-check vehicles will evolve and will occupy a small and specialized — but important — part of the startup financing landscape.

Uber’s mixed Q1 earnings portray an evolving business

Uber Drivers Win Supreme Court Appeal To Be Considered Workers

Image Credits: Matthew Horwood/Getty Images / Getty Images

Uber followed Lyft in reporting its Q1 2021 earnings this week. And like its rival, its results take a little bit of work to understand.

We parsed them as a pair so that we understand what’s going on at the ride-hailing and food-delivery giant.

Let’s start with the big numbers: Uber’s revenue missed sharply, while its profitability beat expectations.

How did investors vet Uber’s performance? The company’s stock is off around 4% in after-hours trading.

Surprised by the revenue miss? Shocked by the profit beat? Startled by the sharp drop in the value of Uber’s stock? Let’s unpack the numbers.

How much product room will fintech giants leave for startups?

Let’s examine the buy now, pay later (BNPL) market, mostly through the lens of PayPal’s first-quarter results.

PayPal’s BNPL results are impressive — and not just to your humble servant, but to other fintech watchers as well — which begs the question: Can the platform effect that the PayPals of the world bring to bear suffocate a growing slice of the startup market?

Freemium isn’t a trend — it’s the future of SaaS

Image of a pair of scissors cutting a string affixed to a metal weight.

Image Credits: Richard Drury (opens in a new window) / Getty Images

As the COVID-19 lockdowns cascaded around the world last spring, companies large and small saw demand slow to a halt seemingly overnight. Enterprises weren’t comfortable making big, long-term commitments when they had no clue what the future would hold.

Innovative SaaS companies responded quickly by making their products available for free or at a steep discount to boost demand.

But these free offerings didn’t go away as lockdowns loosened up. SaaS companies instead doubled down on freemium because they realized that doing so had a real and positive impact on their business. In doing so, they busted the outdated myths that have held 82% of SaaS companies back from offering their own free plan.

AI is ready to take on a massive healthcare challenge

AI in genome sequencing

Image Credits: GIPhotoStock / Getty Images

Shortening the diagnostic odyssey of rare diseases and reducing the associated costs was, until recently, a moonshot challenge, but is now within reach.

About 80% of rare diseases are genetic, and technology and AI advances are combining to make genetic testing widely accessible.

Whole-genome sequencing, an advanced genetic test that allows us to examine the entire human DNA, now costs under $1,000, and market leader Illumina is targeting a $100 genome in the near future.

Why did Bill.com pay $2.5B for Divvy?

illustration of money raining down

Image Credits: Bryce Durbin / TechCrunch

As expected, Bill.com is buying Divvy, the Utah-based corporate spend management startup that competes with Brex, Ramp and Airbase. The total purchase price of around $2.5 billion is substantially above the company’s roughly $1.6 billion post-money valuation that Divvy set during its $165 million, January 2021 funding round.

Per Bill.com, the transaction includes $625 million in cash, with the rest of the consideration coming in the form of stock in Divvy’s new parent company.

Bill.com also reported its quarterly results: Its Q1 included revenues of $59.7 million, above expectations of $54.63 million. The company’s adjusted loss per share of $0.02 also exceeded expectations, with the street expecting a sharper $0.07 per share deficit.

The better-than-anticipated results and the acquisition news combined to boost the value of Bill.com by more than 13% in after-hours trading.

Luckily for us, Bill.com released a deck that provides a number of financial metrics relating to its purchase of Divvy. This will not only allow us to better understand the value of the unicorn at exit, but also its competitors, against which we now have a set of metrics to bring to bear.

Let’s unpack the deal to gain a better understanding of the huge exit and the value of Divvy’s richly funded competitors.

 

5 investors discuss the future of RPA after UiPath’s IPO

Business process management with flowchart to improve efficiency and productivity. Manager analysing workflow on computer screen to implement robotic automation (RPA)

Image Credits: NicoElNino / Getty Images

Robotic process automation (RPA) has certainly been getting a lot of attention in the last year, with startups, acquisitions and IPOs all coming together in a flurry of market activity. It all seemed to culminate with UiPath’s IPO last month. The company that appeared to come out of nowhere in 2017 eventually had a final private valuation of $35 billion. It then had the audacity to match that at its IPO. A few weeks later, it still has a market cap of over $38 billion in spite of the stock price fluctuating at points.

Was this some kind of peak for the technology or a flash in the pan? Probably not. While it all seemed to come together in the last year with a big increase in attention to automation in general during the pandemic, it’s a market category that has been around for some time.

RPA allows companies to automate a group of highly mundane tasks and have a machine do the work instead of a human. Think of finding an invoice amount in an email, placing the figure in a spreadsheet and sending a Slack message to Accounts Payable. You could have humans do that, or you could do it more quickly and efficiently with a machine. We’re talking mind-numbing work that is well suited to automation.

 

Twitch UX teardown: The Anchor Effect and de-risking decisions

Image of a smartphone displaying the Apple Inc. App Store page for the Twitch streaming app.

Image Credits: Bloomberg (opens in a new window) / Getty Images

Built for Mars CEO Peter Ramsey tears down Twitch’s UX, asking how Twitch rakes in cash and the psychology used within its app to encourage users to keep spending.

Ramsey describes Twitch’s protocol of asking users if they want to subscribe to a streamer before seeing their stream “unnecessarily boolean,” which would be a great band name.

But that’s neither here nor there. Ramsey notes: “Often it’s at the point of clicking, not the final stage of a process, meaning the user decides to buy the item when they click ‘check out now,’ not when they’ve entered their card details and click ‘complete purchase.’
Ramsey argues Twitch shouldn’t make users choose between doing nothing and subscribing: “Instead, if they changed the text to, say, “learn more,” the user could click it without having to internalize the decision.”

To buy time for a failing startup, recreate the engineering process

Image of a paper plane in freefall against a black backdrop.

Image Credits: wabeno (opens in a new window) / Getty Images

In non-aerobatic fixed-wing aviation, spins are an emergency. If you don’t have spin recovery training, you can easily make things worse, dramatically increasing your chances of crashing. Despite the life-and-death consequences, licensed amateur pilots in the United States are not required to train for this. Uncontrolled spins don’t happen often enough to warrant the training.

Startups can enter the equivalent of a spin as well. My startup, Kolide, entered a dangerous spin in early 2018, only a year after our Series A fundraise. We had little traction and we were quickly burning through our sizable cash reserves. We were spinning out of control, certain to hit the ground in no time.

All spins start with a stall — a reduction in lift when either the aircraft is flying too slowly or the nose is pointed too high. In Kolide’s case, we were doing both.

Kolide had a lot going for it that enabled me to recover the company, but by far the most important was that we recognized we were in a spin very early, and we had enough cash remaining (and therefore sufficient time) to execute a recovery plan.

What Square’s smashing earnings tell us about consumer bitcoin demand

Shares of Square are up more than 6% after the American fintech company reported a staggering $5.06 billion in revenue in its Q1 2021 earnings report, far ahead of an expected tally of $3.36 billion.

By posting the huge revenue beat, Square grew 266% compared to its year-ago Q1. Because that’s the sort of growth that we generally expect to see from early-stage startups instead of maturing public companies, some exploration is in order. In short, bitcoin revenues from Square, and how they fit into its accounting, are responsible for much of its outsized growth.

And that’s something we need to talk about.

 

#apps, #education, #extra-crunch-roundup, #startups, #tc

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