Microsoft acquires TakeLessons, an online and in-person tutoring platform, to ramp up its edtech play

Microsoft said in January this year that Teams, its online collaboration platform, was being used by over 100 million students — boosted in no small part by the Covid-19 pandemic and many schools going partly or fully remote. Now, it’s made another acquisition to continue expanding its position in the education market.

The company has acquired TakeLessons, a platform for students to connect with individual tutors in areas like music lessons, language learning, academic subjects and professional training or hobbies, and for tutors to book and organize the lessons they give, both online and in person.

Terms of the deal have not been disclosed but we are trying to find out. San Diego-based TakeLessons had raised at least $20 million from a range of VCs and individuals that included LightBank, Uncork Capital, Crosslink Capital and others. TakeLessons posted a short note in the form of a Q&A confirming the deal on its site. The note said that it will continue operating business as usual for the time being, with the intention of taking its platform to a wider global audience.

It’s not clear how many active students and tutors TakeLessons had on its platform at the time of acquisition, but for some context, another big player in the area of online one-to-one tutoring, GoStudent out of Europe, raised $244 million in funding earlier this year that valued it at $1.7 billion. Others in online tutoring like Brainly are also seeing valuations in the hundreds of millions.

Given the relatively modest amount raised by TakeLessons, it’s likely this was a much lower valuation. Yet the acquisition is still one that gives Microsoft the infrastructure and beginnings of setting up a much more aggressive play in mass-market online education, potentially to go head-to-head with these and other big platforms.

TakeLessons today offers instruction in a wide variety of areas, including music lessons (which was where it had gotten its start) through to languages, academic subjects and test prep, computer skills, crafts and more. It has been around since 2006 and got its start first as a platform for people to connect with tutors local to them for in-person lessons, before progressing into online lessons to complement that business.

The pandemic has precipitated a shift to a much bigger wave of the latter, with online tutoring apparently the majority of what is offered on TakeLessons platform today. These lessons continue to be offered on a one-on-one basis, but additionally students can take part in group lessons online via the startup’s Live platform.

The shift to online education that we’ve seen take hold around the world is likely why Microsoft sees a big opportunity here.

On the heels of many schools around the world scrambling for better online learning platforms to manage remote learning during lockdowns and quarantines, educators, families and students have been using (and paying for) a variety of different tools. Within that, Microsoft has been pushing hard to make Teams a leader in that area.

That was built on years of traction already in the market (and a number of other investments and acquisitions that Microsoft has made over the years).

But it also comes amid a new insurgence of competition arising from the current state of affairs. That includes adoption of Google Classroom, as well as a wide variety of more targeted point solutions for specific purposes like video lessons (Zoom figures big here); apps for lesson planning and homework planning; online on-demand tutorials in specific areas like math or languages or science to bolster in-class learning experiences; and more.

The Microsoft way is to bring as many features into a platform as possible to make it more sticky and less likely that users will turn to other apps, providing more value for money around the Microsoft offer. In other words, I’d expect to see Microsoft do more deals and launch more features to cover all of the services that it doesn’t already provide through its educational tools.

(Case in point: my children’s school uses Teams for online lessons, in part because it already uses Outlook for its email system. Now, the school has announced that it will no longer be using a different third-party app for homework planning; instead, teachers will be assigning homework and managing it via Teams. For a cash-strapped state school like ours, it makes sense that it would opt out of paying for two apps when it can get the same features in just one of them. The kids are not happy about this! This is what Microsoft leverages with its platform play.)

NextLessons is somewhat adjacent to that school-focused education strategy. Yes, there will be a big audience of students and their families who might represent a good cross-selling opportunity for tutoring, but NextLessons represents also a more mass-market offering, open to anyone who might want to learn something, not just those already using Microsoft Education products.

So the interest here is likely not just students who want to supplement their online learning — there is a big audience for online tutoring — but any lifelong learner, as well as the many consumers or professionals out there who have gotten interested in learning something new, especially in the last 1.5 years of spending more time alone and/or at home.

And with that, there are other potential opportunities for NextLessons in the Microsoft universe.

Just yesterday, Microsoft CEO Satya Nadella and Ryan Roslansky, the CEO of Microsoft-owned LinkedIn, held an online presentation about what work will look like in the future. Education — specifically professional development — figured strongly in that discussion, with the conversation coinciding with LinkedIn launching a new Learning Hub.

LinkedIn has not only been working for years on building out its education business, but it has also long been looking for a more sticky inroad into doing more with video on its platform.

Something like NextLessons could, interestingly, kill those two birds with one stone. While LinkedIn’s education content up to now has not been something specifically tied to “live” online lessons, you could imagine a bridge between Microsoft’s latest acquisition and what LinkedIn might consider next, too.

#articles, #ceo, #crosslink-capital, #e-learning, #education, #europe, #google, #leader, #learning, #lightbank, #linkedin, #ma, #microsoft, #online-education, #online-learning, #online-tutoring, #ryan-roslansky, #san-diego, #satya-nadella, #takelessons, #teaching, #tutoring, #uncork-capital

Online learning platform Class 101 bags $26M Series B to support growth

Everything is switching from offline to online mode, spurred by the pandemic, and that also has turned around things for the creative economy. Creative professionals continue to look for ways to monetize their talents and knowledge through online education platforms like Class 101 that bring stable incomes and improve opportunities.

Class 101, a Seoul-based online education platform, announced today it has closed $25.8 million (30 billion won) Series B funding to accelerate its growth in South Korea, the U.S. and Japan.

The Series B round was led by Goodwater Capital, with additional participation from previous backers Strong Ventures, KT Investment, Mirae Asset Capital and Klim Ventures.

In 2019, the company raised a $10.3 million (12 billion won) Series A round led by SoftBank Ventures Asia along with Mirae Asset Venture Investment, KT Investment, Strong Ventures and SpringCamp.

Co-founder and CEO of Class 101 Monde Ko told TechCrunch that the company will use the proceeds to focus on hiring more talent, as well as expanding domestic business and overseas markets in the U.S. and Japan.

Ko and four other co-founders established Class 101 in 2018, which was pivoted from a tutoring service platform that was founded in 2015, Ko said. It has 350 employees now.

“We will keep supporting creators to monetize their talents and we will also allow creators to expand their revenue streams by selling their goods, digital files and more products via our platform,” Ko said.

When asked about what differentiated it from other peers, Class 101 provides and ships all the necessary tools and material “Class Kit”, Ko said.

The company offers more than 2,000 classes within a raft of categories, with drawing, crafts, photography, cooking, music and more. It also provides about 230 classes in the U.S. and 220 classes in Japan. There are approximately 100,000 registered creators and 3 million registered users as of August 2021.

Class 101 launched its platform in the U.S. in 2019 and entered Japan last year. The company opened online classes for kids aged under 14 in 2020.

“Class 101 is a company that combines the advantages of Patreon and YouTube, offering tailored support for creators while fulfilling users’ learning needs,” co-founder and managing partner at Goodwater Capital Eric Kim said, adding that it is the fastest growing company “in an economic phenomenon in which individuals follow their passions and do what they really enjoy while also making a living from it.”

#class-101, #creator-economy, #e-learning, #edtech, #education, #goodwater-capital, #online-education, #recent-funding, #startups, #tc

How one founder identified a gap in education working as a teacher and built a startup to fix it

Amanda DoAmaral was an educator herself before she decided to found a tech company aimed at improving the education system. That’s a surprisingly rare credential for a startup founder in this area to possess — despite the obvious benefits of real, first-hand experience. Her company, Fiveable, focuses on modernizing (including a remote-first approach) a key and often overlooked part of education for students: Building an active community of peers to share knowledge with. Hear how she took her dissatisfaction with an inadequate system and turned that into the motivation to build a venture-scale business outside of it on this week’s episode of Found.

We talked to Amanda about her path to entrepreneurship, which is not your typical founder story, despite her experience living and teaching in the Bay Area. Amanda shares how her considerable experience in education, both in terms of her own education, as well as her job as a teacher, led her to the frustrating realization that while tech had a lot to offer kids in school, the system just wasn’t set up to support that or make it happen. Building a company that focused on a particularly underserved aspect of remote learning ended up being the best path forward — and it just so happened that the market Fiveable entered would accelerate dramatically shortly after the company’s founding due to the Covid-19 pandemic.

We loved our time chatting with Amanda, and we hope you love yours listening to the episode. And of course, we’d love if you can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Please leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email at found@techcrunch.com, or leave us a voicemail at (510) 936-1618. And please join us again next week for our next featured founder.

#fiveable, #found, #online-education, #remote-education, #remote-learning, #tc

China roundup: Games are opium, algorithms need scrutiny

Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.

The question for the tech news cycle in China these days has become: Who is Beijing’s next target? Regulatory clampdowns are common in China’s tech industry but the breadth of the recent moves has been unprecedented. No major tech giant is exempted and everyone is being attacked from a slightly different angle, but Beijing’s message is clear: Tech businesses are to align themselves with the interests and objectives of Beijing.

Education curbs hit tech giants

The government’s motivation isn’t always ideological. It could lead to policies that rein in the unruly private tutoring sector in the hope of easing pressure on students and parents. Recent orders from Beijing have strictly limited after-school tutoring, though they also sparked a wave of sympathy for public school teachers who work at lucrative tutoring centers to compensate for their meager salaries.

The effects of the education crackdown are also trickling down to internet companies. For the past few years, ByteDance had been aggressively building an online education business through a hiring and acquisition spree in part to diversify an ad-based video business. Its plan seems to be in shambles as it reportedly plans to lay off staff in its education department following recent the clampdown.

The restraints are also hitting American companies. Duolingo, the language learning app, was removed from several app stores in China. While it’s not immediately clear whether the action was the result of any policy change, the government recently, along with its restraints on extra-curriculum, barred foreign curricula in schools from K-9.

Games are opium

It could be tricky to read the top leaders’ minds because their messages could come through various government departments or state-affiliated media outlets, carrying different weights.

This week, Tencent is in the authorities’ crosshairs. About $60 billion of its market cap was wiped after the Economic Information Daily, an economic paper supervised by China’s major state news agency Xinhua, published an article (which was taken down shortly) describing video games as “spiritual opium” and cited the major role Tencent plays in the industry. Shares of Tencent’s smaller rival NetEase were also battered.

This certainly isn’t the first time Tencent and the gaming industry overall were slammed by the government for their impact on underage players. Tencent has been working to appease the authorities by introducing protections for young players, for instance, by tightening age checks several times.

Tencent, which has a sprawling online empire of social networks, payments and music on top of games, has also promised to “do [more social] good” through its products. And following the recent op-ed from the state paper, Tencent further restricted the amount of time and money children can spend inside games. But after all, the company still depends largely on addictive game mechanics that lure players to open loot boxes.

Tencent share prices over the past six months. Image Credits: Google Finance

Fix the algorithms

The other camp of tech companies feeling the heat is those dependent on machine learning algorithms to distribute content. The Propaganda Department of the Chinese Communist Party, the country’s watchdog of public expressions, along with several other government organs, issued an advisory to “strengthen the study and guidance of online algorithms and carry out oversight over algorithmic recommendations.”

The government’s goal is to assert more control over how algorithmic black boxes affect what information people receive. Shares of Kuaishou, TikTok’s archrival in China, tanked on the news. Since its blockbuster initial public offering in February, Kuaishou’s stock price has tumbled as much as 70%. Meanwhile, the Beijing-based short video firm is shuttering one of its overseas apps called Zynn, which has caused controversy over plagiarism. But its overseas user base is also rapidly growing, crystalizing in one billion monthly users worldwide recently.

End of “two-choose-one”

The week hasn’t ended. On Friday morning, The Wall Street Journal reported that the country’s antitrust regulator is preparing to fine Meituan, China’s major food delivery platform, $1 billion for allegedly abusing its market dominance. In 2020, Meituan earned 114.8 billion yuan or $17.7 billion in revenue.

Until recently, forcing suppliers to pick sides had been a common practice in China’s e-commerce world. Alibaba did so by forbidding sellers to list on rivaling platforms, a practice that resulted in a $2.75 billion antitrust penalty in April. We will see where the government will act next as it continues to curb the power of its tech darlings.

#alibaba, #asia, #beijing, #china, #china-roundup, #chinese-communist-party, #department-of-education, #duolingo, #gaming, #government, #kuaishou, #netease, #online-education, #tc, #tencent

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

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

OpenClassrooms raises $80 million for its online education platform

French startup OpenClassrooms has raised an $80 million Series C funding round led by Lumos Capital Group. The company operates an online education platform in French and English. Users can choose among 54 training programs and get a diploma at the end of the program — some of those program lead to French-state-recognized bachelor and master diplomas.

GSV, the Chan Zuckerberg Initiative (CZI) and Salesforce Ventures also participated in today’s funding round. Existing investors General Atlantic and Bpifrance invested once again in the company.

OpenClassrooms covers many different fields, from web development to digital marketing, product management, HR and sales. Those paths are quite demanding as it can take 6 to 12 months of full-time work to complete a training program. OpenClassrooms partners with mentors so that they can help you remain motivated.

At the end of the program, the startup guarantees that you’ll find a job. If you have a hard time finding a job, the company works with career coaches to make sure that you find a job that fits you. In 2020, 4,300 students found a job or received a promotion after participating in an OpenClassrooms program.

In France, people qualify for public subsidies in order to fund professional education programs. And students can pay for OpenClassrooms courses using those public subsidies.

The company says that the pandemic has had a positive impact on online education. Many people are looking for reskilling and upskilling opportunities and end up on OpenClassrooms. In addition to programs for individuals, the startup also offers courses to 1,400 companies.

Some companies, such as Capgemini, have teamed up with OpenClassrooms to offer apprenticeship programs. Students get to learn new skills and work for Capgemini at the same time. The apprenticeship program could be particularly attractive for companies with a high turnover that can’t find talent to fill open positions. There are currently 1,500 students following an apprenticeship program.

All of this has been working well as revenue during the first quarter of 2021 is 140% higher than Q1 2020 revenue. Recently, OpenClassrooms applied for the B-Corp certification. The company still offers free classes if you’re looking for your next weekend project.

#education, #europe, #france-newsletter, #fundings-exits, #online-education, #openclassrooms, #reskilling, #startups, #upskilling

Education non-profit Edraak ignored a student data leak for two months

Edraak, an online education non-profit, exposed the private information of thousands of students after uploading student data to an unprotected cloud storage server, apparently by mistake.

The non-profit, founded by Jordan’s Queen Rania and headquartered in the kingdom’s capital, was set up in 2013 to promote education across the Arab region. The organization works with several partners, including the British Council and edX, a consortium set up by Harvard, Stanford, and MIT.

In February, researchers at U.K. cybersecurity firm TurgenSec found one of Edraak’s cloud storage servers containing at least tens of thousands of students’ data, including spreadsheets with students’ names, email addresses, gender, birth year, country of nationality, and some class grades.

TurgenSec, which runs Breaches.UK, a site for disclosing security incidents, alerted Edraak to the security lapse. A week later, their email was acknowledged by the organization but the data continued to spill. Emails seen by TechCrunch show the researchers tried to alert others who worked at the organization via LinkedIn requests, and its partners, including the British Council.

Two months passed and the server remained open. At its request, TechCrunch contacted Edraak, which closed the servers a few hours later.

In an email this week, Edraak chief executive Sherif Halawa told TechCrunch that the storage server was “meant to be publicly accessible, and to host public course content assets, such as course images, videos, and educational files,” but that “student data is never intentionally placed in this bucket.”

“Due to an unfortunate configuration bug, however, some academic data and student information exports were accidentally placed in the bucket,” Halawa confirmed.

“Unfortunately our initial scan did not locate the misplaced data that made it there accidentally. We attributed the elements in the Breaches.UK email to regular student uploads. We have now located these misplaced reports today and addressed the issue,” Halawa said.

The server is now closed off to public access.

It’s not clear why Edraak ignored the researchers’ initial email, which disclosed the location of the unprotected server, or why the organization’s response was not to ask for more details. When reached, British Council spokesperson Catherine Bowden said the organization received an email from TurgenSec but mistook it for a phishing email.

Edraak’s CEO Halawa said that the organization had already begun notifying affected students about the incident, and put out a blog post on Thursday.

Last year, TurgenSec found an unencrypted customer database belonging to U.K. internet provider Virgin Media that was left online by mistake, containing records linking some customers to adult and explicit websites.

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#articles, #british-council, #ceo, #computing, #cyberspace, #education, #edx, #email, #harvard, #jordan, #linkedin, #mit, #online-education, #phishing, #security, #server, #spamming, #spokesperson, #stanford, #united-kingdom, #virgin-media, #web-server

Chinese online education app Zuoyebang raises $1.6 billion from investors including Alibaba

The rivalry between China’s top online learning apps has become even more intense this year because of the COVID-19 pandemic. The latest company to score a significant funding round is Zuoyebang, which announced today (link in Chinese) that it has raised a $1.6 billion Series E+ from investors including Alibaba Group. Other participants included returning investors Tiger Global Management, SoftBank Vision Fund, Sequoia Capital China and FountainVest Partners.

Zuoyebang’s latest announcement comes just six months after it announced a $750 million Series E led by Tiger Global and FountainVest. The latest financing brings Zuoyebang’s total raised so far to $2.93 billion. The company did not disclose its latest worth, but Reuters reported in September that it was raising at a $10 billion valuation.

One of Zuoyebang’s main competitors is Yuanfudao, which announced in October that it had reached a $15.5 billion valuation after closing a $2.2 billion round led by Tencent. This pushed Yuanfudao ahead of Byju as the world’s most valuable ed-tech company. Another popular online learning app in China is Yiqizuoye, which is backed by Singapore’s Temasek.

Zuoyebang offers online courses, live lessons and homework help for kindergarten to 12th grade students, and claims about 170 million monthly active users, about 50 million of whom use the service each day. In comparison, there were about 200 million K-12 students in 2019 in China, according to the Ministry of Education (link in Chinese).

In fall 2020, the total number of students in Zuoyebang’s paid live-stream classes reached more than 10 million, setting an industry record, the company claims. While a lot of the growth was driven by the pandemic, Zuoyebang founder Hou Jianbin said in the company’s funding announcement that it expects online education to continue growing in the longer term, and will invest in K-12 classes and expand its produt categories.

 

#apps, #asia, #china, #edtech, #fundings-exits, #online-education, #startups, #tc, #zuoyebang

Brainly raises $80M as its platform for crowdsourced homework help balloons to 350M users

The Covid-19 pandemic has led to a major upswing in virtual learning — where some schools have gone (and stayed) remote, and others have incorporated significantly stronger online components, in order to help communities maintain more social distancing. That has in turn led to a surge in the usage of tools to help home learners do their work better, and today, one of them is announcing a growth round that speaks to the opportunity in that market.

Brainly, a startup from Poland that has built a popular network for students and their parents to engage with each other for advice and help with homework questions, has raised $80 million, a series D that it will be using both to continue building out the tools that it offers to students as well as to hone in on expansion in some key emerging markets such as Indonesia and Brazil. The news comes on the heels of dramatic growth for the company, which has seen its user base grow from 150 million users in 2019 to 350 million today.

The funding is being led by previous backer Learn Capital, with past investors Prosus Ventures, Runa Capital, MantaRay, and General Catalyst Partners also participating. The company has now raised some $150 million and while it’s not disclosing valuation, CEO and co-founder Michał Borkowski confirmed it is “definitely” an upround for the company. For more context, Pitchbook estimates that the company was valued at $180 million in its last round, a Series C of $30 million in 2019.

That C round was raised specifically to help Brainly grow in the U.S. It currently has some 30 million users in that market, and it happens to be the only one in which Brainly is monetising users. Everywhere else, Brainly is currently free to use. (In the U.S. there are also some formidable competitors, like Chegg, which has strong traction in the market of helping students with homework.)

“Brainly has become one of the world’s largest learning communities, achieving significant organic growth in over 35 countries,” said Vinit Sukhija, Partner at Learn Capital, in a statement.

Even before the Covid-19 pandemic, Brainly was finding an audience with students — primarily those aged 13-19, said Borkowski — who were turning to the service to connect with people who could help them with homework when they found themselves at an impasse with, say, a math problem or getting to grips with the sequence of events that led to the revolutions of 1848. The platform is open-ended and is a little like a Quora for homework, in that people can find and answer questions they are interested in, as well as ask questions themselves.

That platform, however, took on a whole new dimension of importance with the shift to virtual learning, Borkowski said.

“In the western world, online education wasn’t a big investment area [pre-Covid] and that has changed a lot, with huge adoption by students, parents and teachers,” he said. “But that big transition, switching from offline to online, has left kids struggling because teachers have so much more to do, so they can’t engage in the same way.”

So with “homework” becoming “all work”, that has effectively led to needing more help than ever with home studies. And while many parents have tried to get more involved to make up the difference, “having parents as teachers has been hard,” he added. They may have been taught differently from how their kids are learning, or they don’t remember or know answers.

One thing that Brainly started to see, he said, was that with the pandemic more parents started using the app alongside students, either to work out answers together or to get the help themselves before helping their kids, with a number of these being from parents of kids younger than 13. He said that 15-20% of all new registrations currently are coming from parents.

Brainly up to now has been mainly focused on how to build out more tools for the students — and now parents — that use it, and has so far been about organic growth for those communities.

However, there is clearly scope to expand that to more educational stakeholders to better organise what kind of questions are answered and how. Borkowski said that the company has indeed been approached by educators, those building curriculums and others so that answers might tie in better with the kinds of questions that they are most likely to ask of students, although for now the company “wants to keep the focus on students and parents getting stuck.”

In terms of future products, Brainly is looking at ways of bringing in more tutoring, video and AI into the mix. The AI aspect is very interesting and will in fact tie in to wider curriculum coverage based on more localised needs. For example, if you ask for help with a particular kind of quadratic equation technique, you can then be served lots of same practice questions to help better learn and apply what you’ve just been learning, and you might even then get suggested related topics that will appear alongside that in a wider mathematics examination. And, you might be offered the chance to meet with a tutor for further help.

Tutoring, he said, is something that Brainly has already been quietly piloting and has run some 150,000 sessions to date. Having such a large user base, Borkowski said, helps the startup run services at scale while still effectively keeping them in test mode.

“It will be about looking at what students are studying and how to map that to the curriculum in the country, and what we can do to help with that.” Borkowski said. “But it will require a heavy lift and and machine learning to pinpoint students” for it to work properly, which is one reason it has yet to roll it out more comprehensively, he added.

Tutoring and more personalization are not the only areas where Brainly is actively testing out new services. The company is also creating more space for adding in video to demonstrate different techniques (which I suspect is especially good for something like mathematics, but equally helpful for, say, an art technique).

There are “thousands per week” being added already, but as with tutoring “that, for us, is a testing stage,” added Borkowski. There should be more coming in Q1 about new products, he said.

#articles, #artificial-intelligence, #brainly, #brazil, #e-commerce, #education, #europe, #funding, #gamification, #general-catalyst, #general-catalyst-partners, #homework, #indonesia, #machine-learning, #online-education, #poland, #prosus-ventures, #quora, #runa-capital, #subscription-services, #tc, #united-states

EdTech boom continues as IntellectoKids raises $3M from Allrise Capital and others

The rush to capitalize on the shift to online learning, post-pandemic, continues. IntellectoKids, a developer of educational apps for children aged 3 to 7 years, has raised $3 million in a Series A financing led by US-based Allrise Capital and other investors, including Genesis Investments.

The platform offers parents of preschool children ‘gamified’ educational content and structured lessons available on mobile devices.

The startup will now launch a Classroom feature with learning tracks in five core Kindergarten and Grade 1 courses, including Math, Phonics, Science, Arts, and Logic.

In addition to the current B2C model, the founders expect in 2021 to offer primary schools and kindergartens IntellectoKids’ platform as an online supplement to support their offline educational process.

IntellectoKids was founded by Mike Kotlov and Andrey Kondratyuk in 2017, who each have three young children.

Kotlov said: “On the education scene, preschool education is becoming a highly vibrant market. The pandemic showed that preschool kids can effectively consume educational content online and autonomously. Clearly, there is a growing need for this type of product among parents and businesses now; however, once the pandemic is over the online education is here to stay for sure as it has already become intertwined with offline and benefited the overall educational process.”

IntellectoKids says it has more than 2 million installs across North America and Central & Northern Europe.

#articles, #early-childhood-education, #education, #genesis-investments, #learning, #mobile-devices, #north-america, #online-education, #online-learning, #preschool, #tc

Filing: Online learning marketplace Udemy is raising up to $100M at a $3.32B valuation

Online education has been one of the hotspots in the tech world this year, as people turn to e-learning tools to fill in the gaps variously arising from closed schools, closed offices, social distancing, and more time on our hands at home because of the Covid-19 pandemic. And that is giving a big bump to education startups, which are raising money to capitalise on the growth opportunity.

In one of the latest developments, Udemy — which provides a marketplace currently numbering some 130,000 video-based courses across 65 languages, ranging from learning python or how to photograph better, through to mastering mindfulness and business analytics — is raising up to $100 million in a Series F round of funding that would value the company at up to $3.32 billion.

The company has filed paperwork for the fundraise in Delaware, first discovered by Justin Byers and the team at Prime Unicorn Index. It’s not clear if the round has closed, and whether the full amount was raised (or indeed, more).

Contacted for a response, Udemy didn’t deny the report but also declined to say anything for the moment. “We have a company policy where we don’t comment on speculations,” a spokesperson said to me via email. “We don’t have a comment at this time but I’ll reach out if anything changes.”

The fundraise would be a strong move for Udemy, which only closed its Series E earlier this year — a $50 million round that catapulted the company to a $2 billion+ post-money valuation.

But that was in February, before the novel coronavirus really took hold of the world. Since then, startups focused on education have been seeing a surge of business starting in the spring of this year, and as a result, also a surge of attention from investors who see a good moment to back rising stars.

Just looking at some of the most recent deals, last week, Udacity announced a $75 million debt round and said it was finally profitable. In October, Kahoot announced a $215 million round from SoftBank. And in September, Outschool raised $45 million (and is now profitable); Homer (raised $50 million from an impressive group of strategic backers); Unacademy (raised $150 million) and the juggernaut that is Byju’s picked up $500 million from Silver Lake.

And these are just some of the bigger deals; there have been many smaller fundraises, new edtech startup launches, and other signs of momentum alongside this. (And Prime Unicorn, incidentally, also noted that Duolingo is also raising money, up to $35 million at a valuation of $2.21 billion if all shares are issued. We’re still digging on that lead.)

When Udemy last raised money, earlier this year, the president of the business division told me it had clocked up 50 million students that purchase courses in an a la carte format, while enterprise customers — which include Adidas, General Mills, Toyota, Wipro, Pinterest and Lyft in a list of some 5,000 in all — use a subscription model.

It looks like its business users have grown and now number over 7,000, according to figures on its site, with total course enrollments now totalling 400 million to date. That could point to the opportunity that Udemy is now exploring with more capital.

But to be clear, the filing does not detail who is in this latest round, nor what the purpose of the fundraising is.

As we wrote at the time of the round in February, that fundraise came from a single, strategic investor, the Japanese educational publisher Benesse Holdings, which partners with Udemy in Japan. Benesse’s bigger business includes developing educational content for children and courses for adults, both online and in-person, and for other educational brands that it owns, such as Berlitz, and Udemy helps Benesse develop content for those various efforts.

Other investors in the company include Stripes, Naspers (now Prosus), Learn Capital, Insight Partners, and Norwest Venture Partners, among others.

Prime Unicorn Index notes that the terms surrounding this latest Series F include a “pari passu liquidation preference with all other preferred, and conventional convertible, meaning they will not participate with common stock if there are remaining proceeds.” It also noted that Udemy’s most recent price per share is $24.13, an upround from the Series E, which priced shares at $15.57.

We’ll update this post as we learn more.

#education, #funding, #online-education, #udemy

How to address inequality exposed by the COVID-19 pandemic

The novel coronavirus has accelerated the use of many digital technologies. Forced in the spring to close their doors, most K-12 schools and universities shifted to online learning where teachers lead classes virtually and students submit their assignments electronically.

According to the World Economic Forum, it is estimated that 1.2 billion students around the world this year were “out of the classroom” due to the pandemic, while in the United States, over 55 million K-12 students didn’t receive in-person instruction.

The use of telemedicine and video conferencing also has become a principal platform for medical consultations as a result of the coronavirus. For example, a Forrester analysis projected “general medical care visits to top 200 million this year, up sharply from their original expectation of 36 million visits for all of 2020.” Virtual connections allow patients to get recommendations wherever they are and draw on a broad range of medical expertise.

E-commerce is taking off as consumers abandon small retail outlets and large department stores. An industry study found that “total online spending in May 2020 reached $82.5 billion, up 77% from May of 2019” and those numbers almost surely will increase in coming months as people appreciate the convenience of online ordering and home delivery.

Yet the pandemic also has exposed dramatic inequities in technology access and utilization. Not everyone has the high-speed broadband required for online education, telemedicine and online shopping. The Federal Communications Commission has estimated it would take $40 billion to close the bulk of the broadband gap. But many people also lack laptops, notebooks, smartphones or electronic devices that allow them to stream videos and take advantage of new modes of service delivery.

It is not just that some are outside the online world, but that digital access is spread inequitably across various groups. According to an Education Week survey, 64% of American teachers and administrators in schools with a large number of low-income students said their pupils faced technology limitations, compared to only 21% of students in schools with a small number of low-income students. The problem isn’t simply broadband, but access to equipment and devices that allow pupils to make use of online resources.

There are substantial racial disparities as well. A McKinsey analysis found that 40% of African-American students and 30% of Hispanic students in U.S. K-12 schools received no online instruction during COVID-induced school shutdowns, compared to 10% of whites. These gaps in access to online education and digital services widen the already substantial educational inequalities that exist, but push them to new heights. If continued for a lengthy period of time, such differentials expose our most disadvantaged students to large barriers to advancement and a future of income deprivation or economic stagnation. Even more tragic, there may be a tipping point beyond which the gap is no longer recoverable.

These types of inequities are intolerable injustices that create nearly insoluble gaps with serious social and economic consequences. The variations noted above increase income inequality, widen the opportunity gap between social groups and doom those left behind to low-paying jobs, temporary positions without health benefits or outright unemployment. Not having access to the digital superhighway limits opportunities for online education, telemedicine and e-commerce and makes it nearly impossible to apply for jobs, request government benefits or access needed health or educational materials.

What is required right now is investment in digital infrastructure and improvements in digital access that eliminate unfair disparities based on race, income and geography. For example, the Federal Communications Commission needs to expand its current “Lifeline” program designed to promote phone connectivity for poor people to the internet. Many providers combine phone and internet usage so there is no reason to provide subsidies for phone service without also including internet service. With the availability of Voice over Internet Protocols (VoIP), it is easy for underserved people to combine phone and internet connectivity.

This FCC also should expand its “Schools and Libraries” program called “E-rate” to include home schooling and remote learning. With so many educational institutions closed and providing instruction through online education, the commission should use the millions in unexpended program funds to close the “homework gap” created by the COVID-19 pandemic. That would help impoverished students access online resources and video conferencing facilities.

The Department of Agriculture’s Rural Utilities Service seeks to improve broadband service in rural areas but its funding currently cannot be used to improve low-speed broadband. At a time when many lack sufficient speed to access online educational resources, telemedicine or video streaming, that limitation makes little sense and needs to be altered so that rural-dwellers can upgrade their internet service.

In the education sphere, states and localities must ensure that racial and income-based disparities in access to online learning are not a permanent feature of the K-12 landscape. Addressing this issue is going to require much more than distributing free laptops to needy students, as is often advocated. Rather, it will involve making sure families can afford the broadband access that will enable pupils to use the laptops in productive ways, teachers are well-trained in distance learning and educational programs equip young people with the skills needed in the 21st century economy.

As we move into the future, broadband will be as vital to social and economic advancement as highways, bridges and dams were in earlier eras. Similar to the 20th century, improving access requires national planning and public and private sector investments. Indeed, digital access should be considered a human right in the same manner as access to universal healthcare. People cannot participate in the digital economy and online learning systems without high-speed broadband.

As noted in our recent AI book, the United States requires a national plan that funds digital infrastructure, reduces racial and geographic disparities, facilitates universal medical insurance and prepares workers for the digital economy. The list of national imperatives includes closing the digital divide, expanding anti-bias rules for the digital economy, building an inclusive economy through more equitable tax policies and training the next generation of workers.

New digital services or financial transactions taxes could help fund the programs that need to be undertaken to deal with these issues. One hundred years ago, as the United States underwent industrialization, national leaders adopted an income tax to pay for needed services, and as we move into a digital economy, there will need to be new types of taxes to pay for needed expenditures. We cannot allow current inequities in access to education and healthcare to deny opportunities to African-Americans, Hispanics, immigrants and poor people. Leaving those individuals behind as the digital economy grows is not a viable option if we’re ever as a nation to achieve our full potential by empowering all Americans.

Data is the key to many emerging technologies so it is crucial to have unbiased information to develop new services, evaluate digital innovation and deal with the ramifications of current products. Much of the current digital data is proprietary in nature and therefore limits the ability of researchers to improve innovation, close the digital divide and develop remedies that address equity problems. The federal government sits on a trove of data that should be made available for commercial and research purposes on an anonymized basis so that privacy is maintained. In the same way that census data enables research, economic development and program assessment, wider access to digital data likely would spur new products and services while also helping to address equity problems.

In a country that continues to be plagued by the coronavirus, it is vital to reduce the inequities that deny opportunity to large groups of Americans and make it impossible for them to share in the benefits of the digital revolution. As we envision a post-COVID world, it is essential we build an inclusive economy that allows everyone to participate in and gain the benefits of the online world.

The fundamental shifts wrought by COVID are not going to slow even after a vaccine is developed and the effects of the coronavirus dissipate over time. Nearly all of the technological trends generated by COVID this year will remain a large part of our ongoing landscape. Due to advances in computer storage and processing power, 5G networks and the growing use of data analytics, technology innovation almost certainly will accelerate in coming years.

Having a substantial part of our fellow citizens outside the digital environment is a recipe for continued racial injustice, social conflict, economic deprivation and political division. It will ensure that cynicism, discontent and anger will remain a feature of the American social landscape for decades to come. The last four years have exposed the massive inequities in American society, made worse not only by the intentional political polarization of the American public, but also by a digital divide that is virtually certain to lock in many pernicious dimensions of inequality in America.

This is not a technology problem, it’s a leadership challenge. Leadership can solve this national crisis by demonstrating the will to wield technology in the best interests of all Americans. The next administration has it within its capacity to address these matters head on and eliminate this divide, or conversely, if it doesn’t take appropriate action, condemn our most vulnerable citizens to four more years of neglect and inequity.

#column, #covid-19, #diversity, #education, #education-technology, #government, #health, #inequality, #online-education, #opinion, #policy, #tc

Freshworks (re-)launches its CRM service

Freshworks, the customer and employee engagement company that offers a range of products, from call center and customer support software to HR tools and marketing automation services, today announced the launch of its newest product: Freshworks CRM. The new service, which the company built on top of its new Freshworks Neo platform, is meant to give sales and marketing teams all of the tools they need to get a better view of their customers — with a bit of machine learning thrown in for better predictions.

Freshworks CRM is essentially a rebrand of the company’s Freshsales service, combined with the company’s capabilities of its Freshmarketer marketing automation tool.

“Freshworks CRM unites Freshsales and Freshmarketer capabilities into one solution, which leverages an embedded customer data platform for an unprecedented and 360-degree view of the customer throughout their entire journey,” a company spokesperson told me.

The promise here is that this improved CRM solution is able to provide teams with a more complete view of their (potential) customers thanks to the unified view — and aggregated data — that the company’s Neo platform provides.

The company argues that the majority of CRM users quickly become disillusioned with their CRM service of choice — and the reason for that is because the data is poor. That’s where Freshworks thinks it can make a difference.

Freshworks CRM delivers upon the original promise of CRM: a single solution that combines AI-driven data, insights and intelligence and puts the customer front and center of business goals,” said Prakash Ramamurthy, the company’s chief product officer. “We built Freshworks CRM to harness the power of data and create immediate value, challenging legacy CRM solutions that have failed sales teams with clunky interfaces and incomplete data.”

The idea here is to provide teams with all of their marketing and sales data in a single dashboard and provide AI-assisted insights to them to help drive their decision making, which in turn should lead to a better customer experience — and more sales. The service offers predictive lead scoring and qualification, based on a host of signals users can customize to their needs, as well as Slack and Teams integrations, built-in telephony with call recording to reach out to prospects and more. A lot of these features were already available in Freshsales, too.

“The challenge for online education is the ‘completion rate’. To increase this, we need to understand the ‘Why’ aspect for a student to attend a course and design ‘What’ & ‘How’ to meet the personalized needs of our students so they can achieve their individual goals,” said Mamnoon Hadi Khan, the chief analytics officer at Shaw Academy. “With Freshworks CRM, Shaw Academy can track the entire student customer journey to better engage with them through our dedicated Student Success Managers and leverage AI to personalize their learning experience — meeting their objectives.”

Pricing for Freshworks CRM starts at $29 per user/month and goes up to $125 per user/month for the full enterprise plan with more advanced features.

#artificial-intelligence, #business, #cloud-applications, #cloud-computing, #crm, #customer-relationship-management, #enterprise, #erp-software, #freshworks, #insideview, #machine-learning, #marketing, #marketing-automation, #online-education, #web-applications

Brighteye Ventures’ Alex Latsis talks European edtech funding in 2020

Brighteye Ventures, the European edtech venture capital firm, recently announced the $54 million first close of its second fund, bringing total assets under management above $112 million. Out of the new fund, the 2017-founded VC will invest in 15-20 companies over the next three years at the seed and Series A stage, writing checks up to $5 million.

Described as a thesis-driven fund investing in startups that “enhance learning” within the context of automation and other new technologies, coupled with changes in the way we live, Brighteye plans to disrupt the $7 trillion global education sector “as educators and students are adapting to distance learning en masse and millions of displaced workers are seeking to upskill,” according to a press release.

The firm’s investments to date include Ornikar, an online driving school in France and Spain serving more than 1.6 million students; Tandem, a Berlin-based peer-to-peer language learning platform with over 10 million members; and Epic!, a reading platform said to be used in more than 90% of U.S. schools.

To dig deeper into Brighteye’s thesis and the edtech sector more broadly, I caught up with managing partner Alex Latsis. We also discussed some of the findings in the firm’s recent European edtech funding report and how more venture capital than ever is set to flow into educational technology.

TechCrunch: Brighteye Ventures backs seed and Series A startups across Europe and North America that “enhance learning.” Can you elaborate a bit more on the fund’s remit, such as subsectors or specific technologies and what you look for in founders and startups at such an early stage?

Alex Latsis: We invest in startups that use technology to directly enable learning, skills acquisition or research as well as companies whose products address structural needs in the education sector. For example, Zen Educate addresses the systemic issue of teacher supply shortages in the U.K. via an on-demand platform that saves schools money whilst allowing educators to earn more. Litigate is an AI-driven coach and workflow tool improving results for legal associates, while Ironhack, the largest tech bootcamp in Europe and Latin America, gives young professionals the skills needed to enter the innovation economy and connects them to employers with a 90% job placement rate.

As education is a complex field we always seek to establish a degree of founder market fit, but more importantly that the founding teams themselves are a good fit internally. No startup succeeds on the merits of a founder alone, even if they may be driving the momentum.

In “The European EdTech Funding Report 2020,” you note that Europe is gaining momentum with a healthy increase in VC investments in local edtech startups. Specifically, you say that edtech VC investment has experienced 9.2x growth between 2014 and 2019 in terms of money invested. What is driving this and how does Europe compare to other major tech regions for edtech, such as Silicon Valley/U.S. or China?

Both Europe and the U.S. saw about 2% of venture capital invested in edtech in 2019. Growth in edtech investment in these markets to date has been driven largely by increased willingness to pay for training that is unavailable, unengaging or too expensive in legacy institutions and to a lesser extent by increased digital penetration in schools and universities that has enabled SaaS products to scale.

Given the rapid evolution of online education in the face of the pandemic, we expect funding for edtech will trend closer to 3%-5% of venture funding in the coming years on both sides of the Atlantic. This will mean billions in incremental investment, hundreds of new promising companies and incredible learning opportunities, particularly for those looking to upskill/reskill. In countries like India and China where school and university student populations are growing more rapidly, we expect 5%+ of VC funding to go into edtech as there is more growth in core demand.

#brighteye-ventures, #distance-learning, #edtech, #entrepreneurship, #europe, #online-education, #tc

With $2.7M in fresh funding, Sora hopes to bring virtual high school to the mainstream

Long before the coronavirus, Sora, a startup run by a team of Atlanta entrepreneurs, was toying with the idea of live, virtual high school. The program would focus on student autonomy and organize its curriculum around projects that learners wanted to work on, such as finding ways to reduce the impact of climate change on the world. Students and teachers would use Zoom and Slack to communicate with each other, with standups everyday to pulse-check progress.

The pandemic has both undermined and underscored Sora’s focus. On one end, the millions of students that flocked home have shown how hard it is to effectively and accessibly teach in virtual settings. On the other end, the pandemic isn’t going away any time soon. Parents and students are desperate for better options.

Sora co-founder Garrett Smiley thinks he can convince parents to approach virtual high school with optimism, their kids and their checkbooks. It all starts with green algae farms.

Smiley said students turn to Sora so they can “start running instead of walking” in their education. He added how the first students in the program spent time building algae farms in their backyards, working with SpaceX engineers and taking college-level math classes upon entrance.

Smiley, who co-founded the company with Indra Sofian and Wesley Samples, says that Sora sells best to students who feel stifled or “held back” from traditional educational institutions. Sora’s product, thus, feels more apt for educationally gifted students than students who might need extra help or support.

At Sora’s heart, it is a private school replacement with a project-based curriculum. How it works beyond that is a little bit more confusing to comprehend. Firstly, students upon enrollment embark on two-week learning expeditions, exploring the answers to broad questions like “how do we recreate an alien species.” As time progresses, students are prompted to create their own projects with check-in calls twice a day. Below is an example of a standup:

Beyond the self-directed study, Sora offers a series of Socratic seminars and workshops.

There’s no such thing as science class, but there are workshops such as “the Physics of Sharks.” Here’s an example schedule of a Sora student:

Image Credits: Sora

The organization is unconventional. Smiley is insistent on the fact that students complete core subjects and standards needed for high school transcript and graduation, including math, science, English and history. Students are also required to take the SAT or ACT, with practice resources provided by the school.

Sora also has an in-person, optional element. Cohorts will be designed by geography. Students are encouraged to meet up with each other outside of school, form sports teams and attend a Sora-sponsored meet-up.

Outside of learning, Sora created a network of more than 50 career mentors and has a suite of services, such as SAT prep and counselors to aid with the college admissions process.

Smiley says that Sora hasn’t yet graduated a class, so they do not have data on most common exit paths, but he added that the company does not promote college as the only option for students.

Sora is working on partnering with the “next generation of college and university replacements,” he says, such as boot camps or internships.

The goal of Sora is to create a community of self-directed and motivated learners.

“We don’t believe schools are in the business of content creation anymore, just typing in Google search engine search specifically you’ll probably find world-class resources to learn a subject,” Smiley said. “So for us, as to be a super successful school, we knew our role was creating this super high-quality community.”

The company had seven students in its inaugural class last year. Now, more than 39 students participate in Sora School, with three-full time faculty. Monthly tuition ranges from $300 to $800 per student.

Tuition is charged in relation to parent income by using a sliding scale, which Smiley says is part of their strategy in making sure Sora is an inclusive and diverse school.

The diversity breakdown of Sora is 67% white, 15% Hispanic, 13% African American and 5% Asian/Middle Eastern. The gender split male to female is 54% and 44%, respectively, with 2% of students identifying as non-binary.

From a mental diversity perspective, Sora lacks key resources needed to support students with special needs. Virtual high school as a product isn’t built for adoption en masse, but instead works best for students who can afford to partake in self-directed and independent learning. Similar to pandemic pods, it could exacerbate the widening inequalities between wealthy and low-income students.

Smiley says that they “definitely thought about” accessibility and are working on it. Still, he says that Sora is created for “students who perhaps don’t need the extreme structure of an in-person school,” which he estimates to be 95% of the world’s learners.

As Sora scales, a key aspect of its success will be if it is able to balance its hands-on, hands-off approach. The startup announced this week that it has raised a $2.7 million round, led by Union Square Ventures, to bring on more faculty, software engineers for back-end support and managers to work on curriculum development. Other participating investors in the round include Village Global, ReThink Education, Firebolt Ventures, Peak State Ventures, Contrary Capital and angel investor Taylor Greene.

#education, #online-education, #recent-funding, #sora-schools, #startups, #tc, #union-square-ventures

The Spectrum Equity-backed video education platform Kajabi has already hit $60 million in ARR

Kajabi may not be an American household name, but users of the web hosting and video tech platform are now being seen in a lot of American households.

The company, initially bootstrapped and profitable since its launch, raised a minority investment from Spectrum Equity Partners last November, but that was merely icing on the cake for a business that had seen its user adoption surge.

The COVID-19 pandemic has pushed that adoption even higher as work-from-home gigs yield to work-from-home side hustles and anyone and everyone decides to get in on on the online education and training action, the company said.

In the past year alone, the company has seen its run rate cross $60 million in August and the company hit over $1 billion in recorded transactions milestone in March, according to chief marketing officer Orlando Baeza, who previously served as a marketing executive at Buzzfeed and Paramount Pictures .

Last November, the company took a minority equity investment from Spectrum Equity Partners, the first outside capital the company raised since its inception a bit over a decade ago.

Founded by a former commodities trader, Kenny Rueter, Kajabi is like Thinkific or Patreon primarily for online learning and video-based entrepreneurs.

“It’s not just a way  to sell your content,” said Kajabi President, Jonathan Cronstedt. “It does do your webpage, blog, email marketing, marketing automation, digital delivery. It does the  webinar aspect and the marketing you’d need to build up a list of prospects… It’s a platform from start to finish for an online business.”

If the best way to make money during a gold rush is to sell picks and shovels, then think of Kajabi as the pick and shovel purveyor for the self-help, startup guide, guru advice set.

The company touts its enabling of self-help legends like Brendon Burchard, Danielle Leslie, and Amy Porterfield, and, most recently, Sophia Amoruso, who joined the platform in August.

“We want  to empower entrepreneurs, experts and influencers  who are serious about their business to have success  online,” said Cronstedt in a November interview when the company took its minority investment from Spectrum Equity. 

The company’s toolkit basically serves as an integration of the various bundle of software a business would need to get itself off the ground. Instead of integrating Shopify, Wix, and other platforms to create a full stack of tools, Kajabi does it for a business.

“There’s endless ways you can use duct tape and bailing wire to get all of these solutions together,” said Cronstedt. “[Businesses are] not going to have the chance to get it out there  because they’re too busy trying to be a platform integrator… they never get into creating anything.”

With over 100 employees, the company sees itself on a pandemic-driven trajectory that should set the company up for massive growth.

Indeed, online learning is now a $220 billion global market, and the self-help market alone is $11 billion (people need a lot of help). The company also cites statistics that put the number of Americans pursuing a “side hustle” at roughly 35% with an estimated 40 million “solopreneurs” in the U.S. workforce.

“Since inception, we have helped 41 million users access great educational content and our customers have generated over 1 billion in sales,” said Rueter, in a November statement. “We feel fortunate to partner with incredible entrepreneurs who are sharing their expertise with the world and are excited to help so many more.”

#articles, #business, #buzzfeed, #economy, #entrepreneurship, #online, #online-education, #online-learning, #paramount-pictures, #president, #shopify, #sophia-amoruso, #tc, #trader, #united-states

Zoom’s earliest investors are betting millions on a better Zoom for schools

Zoom was never created to be a consumer product. Nonetheless, the video-conferencing company’s accessibility made it the answer to every social situation threatened by the pandemic, from happy hours to meetings.

Months later, we’re realizing that force-feeding social experiences into an enterprise software company isn’t a perfect solution. Zoom School is a perfect example of what’s not working: Remote education is a hot mess for students, teachers and parents. Instructors, who could once engage a classroom through whiteboard activities, mini-group presentations and one-on-one discussions, are now stuck to one screen.

Well more than six months into a global pandemic, former Blackboard CEO and former PrecisionHawk CEO Michael Chasen is daring to dream: What if we didn’t assume Zoom was a Band-Aid fix for schools? What if someone created a Zoom experience that was designed, not just marketed, for classrooms?

“If I told you that the majority of classes being held online today, teachers couldn’t take attendance, hand out assignments, give a test or a quiz, grade anything or talk one on one with students, you would say how is teaching and learning even happening?” he told TechCrunch.

Chasen is launching a new company, ClassEDU, with a first product that isn’t too shy about its ambitions, named Class for Zoom. Although the name might convince you that it’s a third-party add-on to Zoom, it’s an entirely independently owned company. And it’s built for teachers who need to find a way to create more-engaging, live-synchronous learning.

When a teacher logs into the Zoom call, they’ll be brought to a screen that looks like this:

Image Credits: ClassEDU

As you can see, they can toggle between the classroom, assignments, tests and quizzes, or the whiteboard. Instead of unorganized tab time, the teacher can take the video call as a one-stop shop for their entire lesson, from syncing materials from the CMS system to polling students on their thoughts to grading the quiz they just took. It’s a full-suite solution, and an ambitious one at that.

The best way to break down Class for Zoom’s features is by separating them into two buckets: instruction tools and management tools.

On the instruction side, Class for Zoom helps teachers launch live assignments, quizzes, and tests, which can be completed by students in real time. Students can also be polled to motivate engagement. Instructors can be granted access to unmute a class or mute a class during appropriate times.

Image Credits: ClassEDU

The marquee feature of the instruction tools is that teachers and students can talk privately without leaving the Zoom call if there’s a question. This is key for shy students who might not want to speak up, inspired by Chasen’s daughter, who struggled to share in front of an entire classroom.

Image Credits: ClassEDU

On the management side, tools range from attendance trackers to features that allow a teacher to see how much time a student is participating in activities. Chasen, who founded Blackboard when he was in college, also gave a nod to his prior company by allowing teachers to integrate CMS systems right into the Zoom classroom.

Less popular, Chasen jokes, is Class for Zoom’s ability to give teachers intel on if a student has Zoom as the primary app in use on their screen. The attention-tracking feature is not new, but it is oversight some people might not be okay with. Students can disable the ability to track focus, but administrators can make it mandatory. The platform also allows teachers to monitor a student’s desktop during an exam to limit cheating.

Class for Zoom’s access to a student’s personal computer could make some users uncomfortable. Zoom has been banned from some school districts due to security concerns, and a wave of Zoombombing attacks, where an unwanted participant hacks into a call and streams inappropriate or offensive content. In response, the video conferencing company has put in security measures, such as verification tools and waiting rooms.

Chasen says that Class for Zoom is balancing its access to information by giving students the option to opt into tracking features versus forcing them to.

Class for Zoom isn’t the only startup trying to make Zoom a better experience. A number of tools built atop Zoom have launched in the past few months, partially because the price of Zoom’s SDK is $0. Macro raised $4.3 million to add depth and analysis to Zoom calls, with an interface that tracks metrics like speaker time and notes. It has more than 25,000 users. Mmhmm got buzz in July for its creative demo that lets users create a broadcast-style video-conferencing experience atop their videoconferencing platform of choice.

Somewhat predictably, Zoom launched a competing feature with Mmhmm that calls into question whether the startups that layer atop incumbents look more like features instead of full-fledged platforms.

Of course, one threat to any of these products is Zoom’s mood. If Zoom tweaks its policy on SDK and API, it could completely wipe out Class for Zoom. But Chasen has reason to be optimistic that this won’t happen.

Today, Class for Zoom announced that it has raised a $16 million seed round, pre-launch, from a cohort of investors, including some of Zoom’s earliest backers such as Santi Subotovsky, a current Zoom board member from Emergence Capital; Jim Scheinman of Maven Partners, an early investor in Zoom and the person who is credited with naming Zoom; and Bill Tai, who is Zoom’s first committed backer. Other investors include Deborah Quazzo, partner from GSV Ventures, and Steve Case, co-founder of AOL and CEO of Revolution.

When asked if the Zoom investor involvement works as “insurance” to protect the startup, Chasen said he didn’t view it like that. Instead, the founder thinks that Zoom is focused more on scale than in-depth specialization. In other words, Zoom isn’t going to pull a Twitter, but instead likens the platform’s developer friendliness to that of Salesforce, which has tons of tools built atop of it. Second, Class for Zoom is a certified Zoom reseller, and makes money off of commission when a district buys Zoom through them. The informal and formal partnerships are enough glue, it seems, for Chasen to bet on stability.

As for whether the technology will stay exclusive to Zoom, Chasen says that it’s the main focus because Zoom is the “de facto industry standard in education.” If other platforms pick up speed, Chasen says they are open to experimenting with different software.

Chasen declined to share exact numbers around pricing, but said that it is a work in progress to find a price point that districts can afford. It’s unclear whether the company will charge per seat, but the founder said that it will charge some type of subscription service fee.

Accessibility in edtech solutions often relies on the medium that the technology and instruction lives on. For example, even if a product is free to use, if it needs high-speed internet and a Mac to work then it might not be accessible to the average home in America. The digital divide is why products often test usability on Chromebooks, low-cost computers that low-income students, teachers and school districts employ.

In Class for Zoom’s case, the first iteration of the product is being rolled out for teachers with Macintosh computers, which could leave out some key demographics due to expense. It’s worth noting that while students can still participate in a class being run on Class for Zoom without the software, the view, tracking and engagement software will be missing.

Thankfully, the new financing will be used to help ClassEDU build software that is usable on low-cost computers such as Chromebooks, as well as Windows, Android or iPhones. When that happens, teachers and students can both benefit from a more engaging view.

Chasen said that the idea for the startup began brewing just weeks into quarantine, when his three kids began learning from home. Months later, Class for Zoom is finally set to launch its beta version and is opening up its waitlist today. By January, Chasen hopes, it will be accessible to any school that wants it.

#classedu, #education, #michael-chasen, #online-education, #precisionhawk, #recent-funding, #santi-subotovsky, #startups, #tc, #zoom

User-generated e-learning site Kahoot acquires Actimo for up to $33M to double down on corporate sector

Norwegian company Kahoot originally made its name with a platform the lets educators and students create and share game-based online learning lessons, in the process building up a huge public catalogue of gamified lessons created by its community. Today the startup — now valued at over $2 billion — is announcing an acquisition to give a boost to another segment of its business: corporate customers.

Kahoot has acquired Danish startup Actimo, which provides a platform for businesses to train and engage with employees. Kahoot said that the purchase is being made with a combination of cash and shares, and works to to a total enterprise value of between $26 million and $33 million for the smaller company, with the sale expected to be completed in October 2020.

It may sound like a modest sum in a tech market where companies are currently and regularly seeing paper valuations in the hundreds of millions at Series A stage, but it also presents a different kind of trajectory both for founders and their investors.

This is actually a strong exit for Actimo, which had raised less than $500,000, according to data from PitchBook. And it puts Actimo under the wing of a company that has been scaling globally fast, finding — like others in the areas of online education and remote working — that the current state of social distancing due to Covid-19 is resulting in a boost to its business.

To give you an idea of the scale and growth of Kahoot, the company says that currently it has over 1 billion active users, on top of some 4.4 billion users in aggregate since first launching the platform in 2013. In the last 12 months, some 200 games have been played on its platform. In June, when Kahoot announced that it had raised $28 million in funding, it told us that 100 million games had been played.

In light of its growth and the future opportunity — even putting aside the progression of the coronavirus, it looks like remote work and remote learning will at the least become a lot more common as a longer-term option — the company has also seen a rise in its valuation. With some of its shares traded on the Merkur Market in Norway, the company currently has a market cap of 18.716 billion Norwegian Krone, which at today’s rates is about $2.08 billion. That figure was $1.4 billion in June.

Kahoot’s targeting of the corporate sector is not new. The company has been building a business in this space for years. It says that in the last 12 months, it logged 2 million sessions across 20 million participating “players” of its corporate training “games”, with some 97% of the Fortune 500 among those users. Customers include the likes of Facebook (for sales training), Oyo (hospitality training and onboarding) and Qualys (for taking polls during a conference), among others.

Critically, while a lot of Kahoot’s audience is in education, its corporate most of the revenues come in, one reason why it’s keen to grow that segment with more services and users.

The aim with Actimo, Kahoot says, is to build out a product set aimed at helping organisations with company culture — which, with many organisations now going on eight months and counting of entire teams working regularly outside of their physical offices, has grown as a priority.

Keeping a team feeling like a team, and an individual feeling more than a transactional regard for an employer, is not a simple thing in the best of times. Now, as we continue to work physically away from each other, it will take even more tools and efforts to get the balance right.

In that context, Actimo’s solution is just one aspect, but potentially an interesting one: it has built a platform where employees can track the training that they have done or need to do, engage with other co-workers, and provide feedback, and employers can use it to generally track and encourage how employees are engaging across the company and its various efforts. It counts some 200 enterprises, including Circle K, Hi3G, and Compass Group, among its customers, and has current ARR of $5 million.

For comparison, Kahoot, in its Q2 financials published in August, reported ARR of $25 million, with invoiced revenue for the quarter at $9.6 million, growing some 317% on the same quarter a year before. The company has also raised some $110 million in private funding from the likes of Microsoft and Disney.

As Kahoot looks to find more than just a transient place in a company’s IT and software fabric — transience of attention always being a risk with anything gaming-based — it makes a lot of sense to pick up Actimo and work on ways of coupling the platform with its other corporate work. You can also imagine a time when it might create a similar kind of dashboard for the educational sector.

“We are excited to welcome the Actimo team to be part of the fast-growing Kahoot! family,” said Kahoot! CEO, Eilert Hanoa, in a statement. “This acquisition will further extend Kahoot!’s corporate learning offerings, by providing solutions tailored for the frontline segment, as well as to solidify company culture and engagement among remote and distributed teams in companies of all types and sizes. This continues our expressed ambition to also grow through M&A by adding strategic capabilities that we can leverage across our global platform.”

“We are thrilled to join forces with Kahoot! in our mission to develop next-level solutions that connect remote employees and boost employee engagement and productivity,” said Eske Gunge, CEO at Actimo, in a statement. “Being part of Kahoot! and with our experience from working with innovative and ambitious enterprises across industries, we can together set a new standard for corporate learning and engagement.”

#e-learning, #education, #elearning, #enterprise, #europe, #gaming, #kahoot, #ma, #online-education, #training

Assessing the potential for a gig economy in education

Over the past few years, personalized learning has established itself as a focal point of innovation in education. Despite the focus, the rate of progress in establishing personalized learning practices in both K-12 school systems and online learning has been slower than expected.  

The Bill & Melinda Gates Foundation and the Chan Zuckerberg Initiative have together invested millions of dollars in support of it, and educators such as Sal Khan, founder of Khan Academy, have spoken extensively about its importance in education.

Personalized learning comprises many aspects of learning: letting students master topics before they move on to higher level ones, giving them agency over their learning based on their interests and goals and using teacher-aided instruction and interactivity, to name a few.

Much of the focus on implementing personalized learning practices has revolved around K-12 school systems, where new initiatives have been met with mixed results, and these efforts will continue. 

Beyond the K-12 school systems however, online education platforms present a large opportunity for delivering personalized learning experiences to students worldwide, and the level of innovation here has lagged expectations.

Massive Open Online Courses (MOOCs) such as Udacity, Coursera and edX emerged in the early 2010s and helped bring quality content online and make it accessible around the globe. However, they haven’t innovated much when it comes to personalized learning, and studies have shown that they have in fact seen declines in completion rate of courses.

In recent years, startups have built platforms that are powering a gig economy for teachers, enabling them to give live lectures in small-group, highly interactive settings. Apps focused on providing personalized learning experiences for users learning domain-specific skills such as math or languages have shown promise, but there’s room for a lot more innovation on this front.

These newer approaches have the potential to democratize personalized learning by innovating on the software teaching platform, enabling better teacher-aided instruction online, and helping students better understand their mastery of topics. 

#artificial-intelligence, #column, #coursera, #distance-education, #duolingo, #education, #k-12, #khan-academy, #massive-open-online-course, #matrix-partners, #online-courses, #online-education, #outschool, #personalized-learning, #remote-learning, #udacity, #union-square-ventures

Four views: is edtech changing how we learn?

In the future, students might dismiss stories about weather-related school closures as folklore.

The COVID-19 pandemic compelled us to experiment with edtech, but it’s still unclear whether attending school virtually with a laptop at the kitchen table offers the same benefits as being in a classroom. One recent study found that only 27% of schools asked teachers to monitor student attendance and 37% were required to do 1:1 check-ins on an ongoing basis.

Can education in a post-pandemic world become more accessible, asynchronous and persistent? Or will our digital divide deepen existing inequities in our educational system?

To consider the issue, four TechCrunch staffers looked at the future of edtech and remote learning:

  • Devin Coldewey
  • Natasha Mascarenhas
  • Alex Wilhelm
  • Danny Crichton

Devin Coldewey: gaming will transform remote learning, but stigma must be addressed

When I was a kid, we played SimCity in computer class once we’d finished our typing lessons, five-paragraph essays and so on. I always thought I was pulling a fast one by zipping through the assignments and getting straight to building my city, but the truth is I was learning just as much with one as the other. The game fooled me into learning about city infrastructure, taxes and other civic concepts that I probably would have fallen asleep had I been reading about them.

As a preschool teacher I found myself on the other side of this phenomenon, finding ways to impart learning on my little charges without boring them — and they were easily bored. It was always better to learn by doing, but kids don’t do anything unless it’s fun.

The pandemic isn’t just affecting higher education; 4th-graders and middle school kids are being thrown for a loop as well — not to mention their teachers. Gaming has to be part of the solution.

Our education system has a sort of built-in fun-to-learning ratio that gets smaller as the years go on, because many of the tools we use to teach core concepts are dated and static. There are a few “edutainment” products if kids are lucky enough to have the iPads or laptops to use them on, but not enough, and they’re plainly of a lower order than the real games kids play all the time. When a kid’s hobby is playing something like Fortnite or Breath of the Wild, does an algebra worksheet dressed up like a 2002 Flash game really seem like anything more than work?

Educational games are stuck on the idea of adding fun to old methods of teaching instead of rethinking how learning can be accomplished outside of those methods. Yet the possibilities of teaching using remote presence and virtual worlds are staggering.

A simple and laudable example is Ubisoft’s educational mode, present in its last two Assassin’s Creed games set in ancient Egypt and classical Athens. For all that they came up short as AAA games, these astonishingly detailed sandboxes offer an entire college course’s worth of anthropology and history; in fact, a special non-violent mode exists just for exploring those aspects of the game.

Imagine telling a classroom full of 14-year-olds that their assignment was to play Assassin’s Creed for an hour a day, find something interesting, look it up and write a paragraph about it. Or build a functioning rocket in Kerbal Space Program. Or finish a set of puzzles in The Witness and list the hidden rules that govern them. Or work with three other kids to build a model of the school in Minecraft or Roblox .

Right now, that’s practically unthinkable (outside a few forward-thinking classrooms), partly because the culture around gaming is weird, toxic and few people take the medium seriously for educational purposes. But if remote learning is going to be part of K-12 education from now on — and we’d better plan for that — we need to meet kids where they are, not try to contort them into a mold cast a century ago.

It’s difficult to visualize because “real” games aren’t built for education except as a secondary consideration. But virtual worlds are becoming venues for more than competition, and embracing that from first principles, by involving educators and students to see what is needed and how those needs can be met, will be a fruitful path for the industry to pursue.

#coronavirus, #covid-19, #education, #extra-crunch, #information-technology, #market-analysis, #online-classes, #online-education, #online-learning, #policy, #remote-learning, #roblox, #tc, #ubisoft, #video-conferencing

Why we’re doubling down on cloud investments right now

Years from now, people will look back on the COVID-19 pandemic as a watershed moment for society and the global economy.

Wearing a mask might be as common as owning a phone; telework, telemedicine and online education will be more of a norm than a backup plan; and for the global economy, the cloud will have transformed the underlying infrastructure of businesses and entire industries.

COVID-19 is a turning point for the cloud and cloud company founders. For its computing power and as a delivery model of software, the cloud has been embraced as a solution to many challenges that businesses face during today’s economic downturn and recovery. Not only is the cloud industry more resilient than other industries, but the cloud model offers businesses a promising future in the age of social distancing and beyond.

We believe that once founders find shelter in the cloud, they’ll never go back.

Cloud’s resiliency amid historic volatility

Over the past decade, there’s been a massive market shift from on-premises to cloud, as 94% of enterprises use at least one cloud service today. 2020 was already a milestone year for the cloud industry, as aggregate SaaS and IaaS run-rate revenue each crossed $100 billion, and the BVP Nasdaq Emerging Cloud Index (^EMCLOUD) market cap crossed $1 trillion in early February. Yet in a matter of days, as the COVID-19 pandemic spread, fear tore through financial markets.

In early March, public markets experienced the steepest crash in history with volatility we haven’t seen since the Great Recession. The cloud index market cap dropped to ~$750 million and cloud multiples returned close to their historical averages of ~7x while the VIX volatility index spiked to the mid-80s. Both at global highs in February 2020, the ^EMCLOUD and the S&P 500 traded off by roughly 35% by mid-March. Over the next two months, though, the ^EMCLOUD recouped those losses, charging to a new all-time high on May 7.

The cloud index has continued its rise since then, and as of the close on May 11 has a market cap above $1.2 trillion and has returned to the lofty 12x forward run rate revenue multiples from 2019. Similar to Adobe in 2012, we expect many enterprises to transition over to the cloud model, and the index will continue to expand. As we predicted in this year’s State of the Cloud 2020, by 2025 we expect the cloud to penetrate 50% of enterprise software.

#canada, #cloud, #cloud-computing, #cloud-infrastructure, #column, #coronavirus, #covid-19, #docusign, #ecommerce, #enterprise, #extra-crunch, #market-analysis, #online-education, #remote-work, #saas, #shopify, #startups, #telemedicine, #twilio, #venmo

93% of Chinese minors are now online

Children and teenagers in China are hyper-connected and using the internet in ways that were unimaginable and inaccessible to earlier generations.

As many as 175 million people under the age of 18, or 93.1% of the country’s underage population, were internet users in 2019, according to a joint report released by the government-affiliated China Internet Network Information Center and the Chinese Communist Youth League.

The digital divide was quickly closing. Internet penetration among urban minors was 93.9%, just 3.6% more than their rural counterparts, compared to a 5.4% gap in 2018. Almost all of them accessed the internet through smartphones. The US, by comparison, recorded 95% smartphone access among teens in 2018.

Though up to 81.9% of Chinese schools restricted the use of cellphones, 74% of the underage population reported having their own internet devices. 89.6% went online for educational purposes — the COVID-19 pandemic that has kept millions of students at home would certainly fuel more persistent adaptation of online education. 61% used the internet for gaming and 46.2% for streaming short videos on apps like Douyin (TikTok China) and Kuaishou.

Contrary to widespread concerns, only 17.3% of the underage users reported they had developed “psychological dependence” on the internet, although the numbers should be taken with caution as they came from respondents’ subjective judgments.

While many parents are growing wary of internet safety among children, 75.3% of the Chinese underage users said they had “some understanding” of rights protection or ways to report inappropriate behavior with regard to internet use.

#asia, #bytedance, #china, #internet, #kuaishou, #online-education, #tiktok

Edtech’s newest unicorn, ApplyBoard, lands $1.4B valuation with fresh funding

Brothers Martin, Meti and Massi Basiri all left Iran to study abroad in Canada. After struggling with every aspect from the visa process to grade conversions, the brothers saw an opportunity to make the transition to study internationally more seamless. So, they started Applyboard in 2015 at University of Waterloo’s Velocity Garage.

ApplyBoard has two main parts of its business. First, the company helps international students search and apply from a single platform to universities and colleges across the world. Similar to how American students use the Common App to apply to schools, ApplyBoard seeks to be the college undergrad application for international students, and serve as a marketplace. It is free for students.

The other part of ApplyBoard’s business is on the university side. The startup makes money from revenue-sharing agreements with colleges and universities. If a student attends a college from using their services, ApplyBoard gets a cut of the tuition.

While the SaaS-enabled startup did not disclose revenue, it said it took in $300 million in sales last year.

Five years after founding, ApplyBoard has helped assist over 100,000 students across 110 countries to study internationally. Today, the Ontario-based startup announced it raised $75 million (USD) at a $1.5 billion valuation, making it the latest edtech unicorn.

Unlike most of the reported rounds we’ve been covering these days, this round was closed at the end of March in the thick of the pandemic for Canada, co-founder Martin Basiri told TechCrunch . It means that ApplyBoard’s new valuation is yet another example of how edtech as a sector is feeling dollar sign momentum from COVID-19.

The pandemic has forced millions of students to learn from home, putting tech companies at the forefront of making remote education possible. ApplyBoard, said Basiri, had a 200% month-over-month surge of new schools signing up for its service.

“A lot of investors noticed the importance of our digital platform that can do such an important job,” said Basiri.

While most unicorns in the edtech space hail from the B2C space, like Duolingo and Udemy, the story with ApplyBoard shows that there is promise in selling to large businesses. Across the world, colleges have been turning to alternative marketing channels as campus tours and limited travel hurts their exposure to international students.

The new round was led by Drive Capital. Other participating investors include Fidelity Investments Canada ULC, Business Development Bank of Canada, Anthos Capital, Artiman Ventures, and Plug and Play Tech Center. ApplyBoard plans to hire 100 more employees, atop its existing 400 staff.

#anthos-capital, #artiman-ventures, #business-development-bank-of-canada, #canada, #co-founder, #drive-capital, #duolingo, #education, #iran, #iversity, #meti, #online-education, #plug-and-play, #startup-company, #tc, #techcrunch, #udemy, #university-of-waterloo, #velocity

As lockdowns stretch on, is edtech passing or failing?

Back in January, Georgia Tech professor David Joyner got a cryptic email from a student based in Wuhan, China.

“I’m under quarantine, but my internet access is okay so I have more time to spend on classwork, I wanted to let you know,” the message read. Unsure why Wuhan would be under quarantine, Joyner did a quick Google search and saw the beginnings of the coronavirus pandemic.

“I thought, there’s something going on in Wuhan so maybe we’ll have some students affected by it,” Joyner said. Fast-forward two months and the coronavirus is a household term. All of Joyner’s students, regardless of geography, have been impacted by the pandemic.

It has been a little over a month since colleges and schools across the country started shutting down due to COVID-19. Edtech startups had a surge in usage and a demand for more resources than ever. Now that the adoption scramble has slowed, the same startups are reckoning with unprecedented use cases.

Everyone knows how they’re expected to behave in a physical classroom, but can you stop a student from cheating when taking a test in their bedroom at home? How should teachers offer 1:1 time and take questions during a lesson?

Piazza founder Pooja Sankar says teachers face more open questions: “What does it mean to record myself? What does it mean to have a camera on my face? How do I know I can hold a class with reliable internet connection?”

#coronavirus, #covid-19, #edtech, #education, #extra-crunch, #market-analysis, #online-classes, #online-education, #online-learning, #startups, #tc, #teacher

Pandemic forces fundraising founders to accept ‘discounts across the board’

Startup founders who are fundraising in this climate should expect venture investors to take a huge chunk out of their valuation expectations.

“What we’re seeing across the board is discounts,” says Mike Janke, co-founder of early-stage cybersecurity investment firm Datatribe.

Investors are still committing to new deals, he says, but they’re adding new terms and demanding lower valuations from companies as the cost of raising capital during the downturn. Janke, whose firm has several deals in the pipeline, says entrepreneurs should expect VCs to demand concessions like more frequent board meetings and large price cuts compared to what they’d previously seen.

“If you look at 2000 and 2008, venture always views [downturns] as the time to get good deals,” Janke says. “We’re looking at a 15% to 25% discount to do deals.”

In one instance, a company that turned down a $900 million acquisition offer is now in the process of raising a new round at a $500 million valuation, he says. “In 2019 it was just generally accepted that this company was worth over $1 billion.”

Deals are getting done, though. As the pandemic began to spread, Janke says most firms began triaging their portfolios to determine who would need to raise cash and who could remain afloat without an infusion. Now, firms are looking out and seeing what kind of opportunities there are in the broader market — if they can.

“Some of our peers in the Valley have up to 40% of their companies that need an infusion or some sort of bridge to get through,” says Janke. “These companies that had higher valuations that came out of the Valley have had to do more drastic cuts.” Startups that raised cash in markets outside the Bay Area have not had as much difficulty, he says, because they’re more efficient.

#coronavirus, #corporate-finance, #covid-19, #extra-crunch, #finance, #funding, #fundings-exits, #fundraising, #online-education, #private-equity, #startups, #tc, #valuation, #venture-capital

Will China’s coronavirus-related trends shape the future for American VCs?

For the past month, VC investment pace seems to have slacked off in the U.S., but deal activities in China are picking up following a slowdown prompted by the COVID-19 outbreak.

According to PitchBook, “Chinese firms recorded 66 venture capital deals for the week ended March 28, the most of any week in 2020 and just below figures from the same time last year,” (although 2019 was a slow year). There is a natural lag between when deals are made and when they are announced, but still, there are some interesting trends that I couldn’t help noticing.

While many U.S.-based VCs haven’t had a chance to focus on new deals, recent investment trends coming out of China may indicate which shifts might persist after the crisis and what it could mean for the U.S. investor community.

Image Credits: PitchBook

#alibaba-group, #artificial-intelligence, #china, #column, #e-commerce, #ecommerce, #enterprise, #enterprise-software, #extra-crunch, #food-delivery, #health, #machine-learning, #market-analysis, #online-education, #richard-liu, #robot, #robotics, #sequoia-capital-china, #startups, #taobao, #tc, #telecommuting, #telehealth, #telemedicine, #tencent, #welight-capital

Online tutoring marketplace Preply banks $10M to fuel growth in North America, Europe

Online learning looks likely to be a key beneficiary of the social distancing and quarantine measures that are being applied around the world as countries grapple with the COVID-19 pandemic.

In turn, this looks set to buoy some relative veterans of the space. To wit: Preply, a 2013-founded tutoring marketplace, is today announcing a $10 million Series A. It said the funding will be used to scale the business and beef up its focus on the US market, where it plans to open an office by the end of the year.

The Series A is led by London-based Hoxton Ventures, with European VC funds Point Nine Capital, All Iron Ventures, The Family, EduCapital, and Diligent Capital also participating.

Preply’s press release also notes a number of individual angel investors jumped aboard this round: Arthur Kosten of Booking.com; Gary Swart, former CEO of Upwork; David Helgason, founder of Unity Technologies; and Daniel Hoffer, founder of Couchsurfing.

The startup said it has seen a record number of daily hours booked on its platform this week. It also reports a spike in the number of tutors registering in markets including the U.S., U.K., Germany, France, Italy and Spain — which are among the regions where schools have been closed as a coronavirus response measure.

Also this week Preply said some countries have seen the number of tutor registrations triple vs the same period in February, while it also reports a doubling of the number of hours students are booking on the platform in some markets.

The former TechStars Berlin alum closed a $1.3M seed back in 2016 to expand its marketplace in Europe, when it said it had 25,000 “registered” tutors — and was generating revenue from more than 130 countries.

The new funding will be used to help scale mainly in North America, France, Germany, Spain, Italy and the UK, it said today.

Another core intent for the funding is to grow Preply’s current network of 10,000 “verified” tutors, who it says are teaching 50 languages to students in 190 countries around the world. So tackling the level of tutor churn it has evidently experienced over the years — by getting more of those who sign up to stick around teaching for a longer haul — looks to be one of the priorities now it’s flush with Series A cash.

It also plans to spend on building additional data-driven tools — including for assessments and homework.

The aim is to increase the platform’s utility by adding more features for tutors to track students’ progress and better support them to hit learning goals. “Preply wants to engage and enable tutors to develop alon