What we can learn from edtech startups’ expansion efforts in Europe

It’s a story common to all sectors today: investors only want to see ‘uppy-righty’ charts in a pitch. However, edtech growth in the past 18 months has ramped up to such an extent that companies need to be presenting 3x+ growth in annual recurring revenue to even get noticed by their favored funds.

Some companies are able to blast this out of the park — like GoStudent, Ornikar and YouSchool — but others, arguably less suited to the conditions presented by the pandemic, have found it more difficult to present this kind of growth.

One of the most common themes Brighteye sees in young companies is an emphasis on international expansion for growth. To get some additional insight into this trend, we surveyed edtech firms on their expansion plans, priorities and pitfalls. We received 57 responses and supplemented it with interviews of leading companies and investors. Europe is home 49 of the surveyed companies, six are based in the U.S., and three in Asia.

Going international later in the journey or when more funding is available, possibly due to a VC round, seems to make facets of expansion more feasible. Higher budgets also enable entry to several markets nearly simultaneously.

The survey revealed a roughly even split of target customers across companies, institutions and consumers, as well as a good spread of home markets. The largest contingents were from the U.K. and France, with 13 and nine respondents respectively, followed by the U.S. with seven, Norway with five, and Spain, Finland, and Switzerland with four each. About 40% of these firms were yet to foray beyond their home country and the rest had gone international.

International expansion is an interesting and nuanced part of the growth path of an edtech firm. Unlike their neighbors in fintech, it’s assumed that edtech companies need to expand to a number of big markets in order to reach a scale that makes them attractive to VCs. This is less true than it was in early 2020, as digital education and work is now so commonplace that it’s possible to build a billion-dollar edtech in a single, larger European market.

But naturally, nearly every ambitious edtech founder realizes they need to expand overseas to grow at a pace that is attractive to investors. They have good reason to believe that, too: The complexities of selling to schools and universities, for example, are widely documented, so it might seem logical to take your chances and build market share internationally. It follows that some view expansion as a way of diversifying risk — e.g. we are growing nicely in market X, but what if the opportunity in Y is larger and our business begins to decline for some reason in market X?

International expansion sounds good, but what does it mean? We asked a number of organizations this question as part of the survey analysis. The responses were quite broad, and their breadth to an extent reflected their target customer groups and how those customers are reached. If the product is web-based and accessible anywhere, then it’s relatively easy for a company with a good product to reach customers in a large number of markets (50+). The firm can then build teams and wider infrastructure around that traction.

#column, #ec-column, #ec-edtech, #ec-how-to, #edtech, #education, #europe, #finland, #france, #norway, #owl-ventures, #spain, #startups, #sweden, #switzerland, #united-kingdom, #united-states, #venture-capital

Leap Finance raises $55 million to help Indian students study abroad, plans international expansion

Hundreds of thousands of teenagers and young adults get on flights each year from India to a foreign land to pursue higher education. Upon landing, they face myriad challenges. One big one: They don’t have a local credit history, so they can’t avail a range of financial services, including a loan or a credit card — at least not without paying a premium for it.

For banks and other financial institutions, there is an increased risk when they engage with foreigners, so they charge more. An Indian student studying in the U.S., for instance, borrows money at an interest rate of over 13%, nearly twice of what their local peers are charged.

Leap Finance, a two-and-a-half-year old startup with headquarters in San Francisco and Bangalore, is attempting to solve this problem — and many others. The startup, which sits at the intersection of fintech and edtech, grants loans to students at a fair interest rate by evaluating the data they generated — alternative and derived — in India itself.

But in recent years, Leap Finance has aggressively expanded its offerings to provide what it calls a broader infrastructure to enable students to pursue international higher education.

The startup is helping students with guidance on admission, visas, and test preparation. Leap has developed a community of over 1 million students where they advise each other and explore options. Leap Finance said it has helped over 60,000 students in their study abroad journey over the last 18 months — and just had its strongest fall season.

And as is common in the startup ecosystem, such growth is usually followed by strong interest from investors. Which brings us to the development the startup shared on Wednesday.

Leap Finance has announced it has raised $55 million in a new financing round led by Owl Ventures. The Series C round also saw participation from Harvard Management Company, more popularly known for being a high-profile LP to venture funds. Existing investors Sequoia Capital India and Jungle Ventures also participated in the round, which follows a Series B funding in March this year, and brings Leap Finance’s all-time raise to over $75 million.

Vaibhav Singh (left) and Arnav Kumar founded Leap Finance in 2019 (Leap Finance)

Since we last spoke about Leap Finance, the startup has demonstrated strong growth on various fronts, said Arnav Kumar, co-founder of Leap Finance, in an interview with TechCrunch. Its community has grown, the test preparation app is increasingly becoming popular, and its core financial services has also surged, he said.

On top of this, the startup has expanded its offerings to help students with preparing for — and landing — internships when they do join a college abroad, solving another aspect in which they struggle.

Now with the new funding, the startup is planning to expand to serve international markets including Middle East and Southeast Asia and help the students pursue higher education in 20 nations, said Kumar, who previously worked as an associate vice president at venture fund Elevation Capital.

“Leap is on the trajectory to become the preeminent study abroad platform for students. The overseas education market is fragmented where there is no single one-stop solution,” said Amit Patel, Managing Director of Owl Ventures, in a statement.

“It can be very confusing for students to know where to begin preparation, what colleges they should target, and how they are going to afford to pay for their education. Leap is creating a comprehensive platform that addresses all of these preparation and financing needs for students. Owl Ventures is excited to deepen our partnership with Vaibhav, Arnav, and the Leap team to make studying abroad a reality for as many students as possible.”

This is a developing story. More to follow…

#apps, #asia, #edtech, #education, #finance, #funding, #india, #jungle-ventures, #leap-finance, #owl-ventures, #sequoia-capital-india, #tc

Workera.ai, a precision upskilling platform, taps $16M to close enterprise skills gap

Finding the right learning platform can be difficult, especially as companies look to upskill and reskill their talent to meet demand for certain technological capabilities, like data science, machine learning and artificial intelligence roles.

Workera.ai’s approach is to personalize learning plans with targeted resources — both technical and nontechnical roles — based on the current level of a person’s proficiency, thereby closing the skills gap.

The Palo Alto-based company secured $16 million in Series A funding, led by New Enterprise Associates, and including existing investors Owl Ventures and AI Fund, as well as individual investors in the AI field like Richard Socher, Pieter Abbeel, Lake Dai and Mehran Sahami.

Kian Katanforoosh, Workera’s co-founder and CEO, says not every team is structured or feels supported in their learning journey, so the company comes at the solution from several angles with an assessment on mentorship, where the employee wants to go in their career and what skills they need for that, and then Workera will connect those dots from where the employee is in their skillset to where they want to go. Its library has more than 3,000 micro-skills and personalized learning plans.

“It is what we call precision upskilling,” he told TechCrunch. “The skills data then can go to the organization to determine who are the people that can work together best and have a complementary skill set.”

Workera was founded in 2020 by Katanforoosh and James Lee, COO, after working with Andrew Ng, Coursera co-founder and Workera’s chairman. When Lee first connected with Katanforoosh, he knew the company would be able to solve the problem around content and basic fundamentals of upskilling.

It raised a $5 million seed round last October to give the company a total of $21 million raised to date. This latest round was driven by the company’s go-to-market strategy and customer traction after having acquired over 30 customers in 12 countries.

Over the past few quarters, the company began working with Fortune 500 companies, including Accenture and Siemens Energy, across industries like professional services, medical devices and energy, Lee said. As spending on AI skills is expected to exceed $79 billion by 2022, he says Workera will assist in closing the gap.

“We are seeing a need to measure skills,” he added. “The size of the engagements are a sign as is the interest for tech and non-tech teams to develop AI literacy, which is a more pressing need.”

As a result, it was time to increase the engineering and science teams, Katanforoosh said. He plans to use the new funding to invest in more talent in those areas and to build out new products. In addition, there are a lot of natural language processes going on behind the scenes, and he wants the company to better understand it at a granular level so that the company can assess people more precisely.

Carmen Chang, general partner and head of Asia at NEA, said she is a limited partner in Ng’s AI fund and in Coursera, and has looked at a lot of his companies.

She said she is “very excited” to lead the round and about Workera’s concept. The company has a good understanding of the employee skill set, and with the tailored learning program, will be able to grow with company needs, Chang added.

“You can go out and hire anyone, but investing in the people that you have, educating and training them, will give you a look at the totality of your employees,” Chang said. “Workera is able to go in and test with AI and machine learning and map out the skill sets within a company so they will be able to know what they have, and that is valuable, especially in this environment.”


#andrew-ng, #artificial-intelligence, #carmen-chang, #coursera, #edtech, #education, #enterprise, #funding, #james-lee, #kian-katanforoosh, #machine-learning, #new-enterprise-associates, #owl-ventures, #professional-services, #recent-funding, #richard-socher, #startups, #tc, #workera-ai

Why global investors are flocking to back Latin American startups

The Latin America startup ecosystem is having a great year, with mega-rounds being announced at breakneck speed and new unicorns minted almost monthly. This is mostly due to the clearly maturing startup scene in the region, with proven successes such as Nubank, Cornershop, Gympass and Loggi helping to bolster LatAm’s credibility.

Interestingly, many of the region’s rounds are led by or saw participation from investors based elsewhere. Firms such as SoftBank, Tiger Global Management, Tencent, Accel, Ribbit Capital and QED Investors are pouring money into LatAm. Some are even seeing more opportunity than in the U.S. — Latin America, they believe, has historically been ripe for disruption, especially in the fintech and proptech sectors, due to the significant underbanked and unbanked population in the region and the relatively unstructured real estate industry.

Last month, my colleagues Anna Heim and Alex Wilhelm found that structural factors such as strong digital penetration and quick e-commerce growth are among the key reasons Latin America is breaking venture capital records this year. One Mexico-based VC even declared that the story was about “talent, not capital.”

Local VCs are raving about the human capital in the region, but for some global investors, the appeal of Latin America extends beyond the talent to the general populace. Shu Nyatta, a managing partner at SoftBank who co-leads its $5 billion Latin America Fund, pointed out a dynamic that might seem obvious but is rarely articulated: Technology in LatAm is often more about inclusion rather than disruption.

“The vast majority of the population is underserved in almost every category of consumption. Similarly, most businesses are underserved by modern software solutions,” Nyatta explained. “There’s so much to build for so many people and businesses. In San Francisco, the venture ecosystem makes life a little better for individuals and businesses who are already living in the future. In LatAm, tech entrepreneurs are building the future for everyone else.”

Accel Partner Ethan Choi says the region’s consumer markets are growing rapidly thanks to a fast-growing middle class and “technology permeating through every aspect of consumers’ lives.” This has spurred demand for digital offerings, which has led to more startups, and consequently, investor interest.

Brazil and Mexico riding the gravy train

One look at the dollars pouring into LatAm this year is enough to convince anyone of the skyrocketing interest.

Latin America saw a total of $6.2 billion in incoming venture capital in the first half of 2021, more than double the $2.6 billion in the same period last year, and even beating the $4.1 billion invested across all of 2020, according to preliminary data from LAVCA (the Association for Private Capital Investment in Latin America — LAVCA used a different methodology than CB Insights, in case you’re wondering).

#accel, #brazil, #funding, #fundings-exits, #latin-america, #mexico, #owl-ventures, #qed-investors, #quintoandar, #ribbit-capital, #softbank, #softbank-group, #startups, #tc, #venture-capital

Novakid’s investors bet $35M that it can teach kids English

If you’re trying to develop fluency in a non-native tongue, language immersion is a crucial part of the learning process. Surrounding yourself with native speakers helps with pronunciation, context building, and most of all, confidence.

But what if you’re an eight-year-old kid in Spain learning English and can’t swing a solo trip to the United States for the summer?

Novakid, founded by Maxim Azarov, wants to be your next best option. The San Francisco-based edtech startup offers virtual-only, English language immersion for kids between the ages of four through 12, by combining a mix of different services from live tutors to gamification.

After closing its $4.25 million Series A round last December, Novakid announced today that it is back with a $35 million Series B financing, led by Owl Ventures and Goodwater Capital. Existing investors also participated in the round, including PortfoLion, LearnStart, TMT Investments, Xploration Capital, LETA Capital and BonAngels.

The startup is raising capital in response to an active start to its year. The company’s active client base grew 350% year over year, currently at over 50,000 paying students. The money will be used to get more students into its universe of tools, as well as help Novakid expand into international markets with high populations of speakers who want to learn English.

The company’s suite of services are built around two principles: First, that it can immerse early-age learners into the world of English at scale, and second, that it can actually be fun to use.

When a user signs up, they are first connected to one of Novakid’s 2,000 live tutors for their first class. Tutors must be native English speakers with a B.A. degree or higher, as well as an international teaching certificate such as DELTA, CELTA, TESOL or TEFL.

“One of the things that is really important, even psychologically, is to start listening to the language, start interacting with a live person, and remove being afraid of not understanding something,” Azarov said. The company wants to recreate the conditions of how a kid likely learned their first language.

In the class, the tutors only speak English, and users are encouraged to do the same to slowly build and mistake their way into confidence. While the live, video-based classes are a key part of Novakid’s product, Azarov said it was important that his company “was not just giving you access to a teacher” as its main value proposition.

“Most of the competitors are taking teachers and making them available remotely so you don’t have to travel and you have a bigger selection,” he said. But if you look at the industry in the bigger picture, guys like Oxford, Cambridge, Pearson who provide content for the language learning industry, their product basically sucks. It’s really bad.” So, Novakid puts most of its energy into rebuilding a curriculum that works with better design, and includes games.

Gamified content lives both in and out of classes. Within the classroom, a teacher may take a student on a VR-enhanced tour through famous landmarks and museums to practice vocabulary. Self-paced content could look like a multiplayer “battle” between two students answering questions within a certain time period to get a better score. Novakid has an entire team dedicated to game design and development.

Students are clicking in. Novakid users spend two-thirds of their time on the website with tutors, and one-third with self-paced content that the company built in-house. The company wants to switch those concentrations because more students are spending time with the asynchronous content around grammar and vocabulary, and teachers are reserved for more complex information like speaking and conversation.

Part of the difficulty of scaling up a language learning business is that users need to stay motivated. Gamification helps with engagement, but Novakid’s clientele of children could also be fast to churn compared to adult learners, simply due to priorities. Azarov said that he sees how some would view selling exclusively to children as a disadvantage, but he views their focus as differentiation.

“You get better brand equity when you’re more focused,” he said. “The way kids learn language is vastly different from the way adults learn language, and I don’t think the general players who do ‘everything from everybody’ will be able to do [the former] as well as we are.” Duolingo recently launched Duolingo ABC, a free English literacy app with hundreds of short-form exercises. While the now-public company has strong branding, Novakid’s strategy differs by adding in more services around live learning and speaking.

So far, the company has proven that its strategy is sticking. Its revenue in 2020 was $9 million, and in 2021 it is expected to hit between $36 million to $45 million in revenue. It declined to disclose the specifics around diversity of the team, but plans to kick off a quite intensive recruiting spree going forward. Azarov plans to add 200 people to his 300-person company in the next six months.

#edtech, #education, #goodwater-capital, #novakid, #owl-ventures, #recent-funding, #startups, #tc

Edtech’s venture-backed globalization pauses at China

U.S.-based edtech investors are increasingly going global, but recent regulatory crackdowns in China, which instructed local K-12 tutoring startups to go non-profit, have led to a chill among check-writers looking at the country.

When I first started reporting on edtech over a year ago, U.S.-based investors often cited China as validation of the opportunity for direct-to-consumer businesses in the K-12 world. The success of Chinese edtech was used to predict the surge of U.S.-based consumer edtech, which saw parent adoption surge during the pandemic.

On Saturday, however, the Chinese government rolled out legislation aimed at easing the financial burden of education services on families, at the cost of venture-backed startups. The reactions were mixed: One founder told me they doubled their personal stake in every publicly traded Chinese edtech startup, considering the present issues a blip in the timeline, but another told me that they were glad they sold their investments in China just last month.

And everyone seems to be looking to India as the next geographic testing ground.

‘We didn’t think we were smart enough’

Reuters reported last week that China is barring for-profit tutoring platforms on core school subjects. The country has also introduced time caps and tutoring curfews, and notably, forbade the platforms from raising capital through IPOs as well as advertising their programs. The news sent Chinese edtech stocks tumbling — NYSE-listed TAL Education’s shares, for instance, closed at $4.47 per share on Monday, down nearly 80% from $20.52 per share last Thursday before the news broke.

Owl Ventures, which has one of the largest edtech-focused funds at $585 million, has been actively investing globally over the past few years. Investor Ian Chiu said last October that he views K-12 tutoring in China as “the biggest market right now in education”.

#applyboard, #asia, #byjus, #china, #deborah-quazzo, #ec-east-asia, #ec-edtech, #ec-indian-subcontinent, #ec-news-analysis, #edtech, #education, #gsv-ventures, #ian-chiu, #india, #jan-lynn-matern, #jennifer-carolan, #learn-capital, #owl-ventures, #policy, #startups, #tc, #tencent, #tutoring, #venture-capital, #vipkid

#DealMonitor – #EXKLUSIV Scailex sucht 100 Millionen – Faaren sammelt Millionen ein – Forto sucht 50 Millionen – 468 Capital investiert in Arive

Im aktuellen #DealMonitor für den 17. Mai werfen wir wieder einen Blick auf die wichtigsten, spannendsten und interessantesten Investments und Exits des Tages in der DACH-Region. Alle Deals der Vortage gibt es im großen und übersichtlichen #DealMonitor-Archiv.


+++ Das Münchner LegalTech Scailex, zu dem die Marke VerbraucherRitter gehört, sucht derzeit bis zu 100 Millionen Euro. Das Unternehmen, das von Steffen Matz, früher unter anderem steam5 und Bodychange) wurde 2017 gegründet. Das profitable Unternehmen erwirtschaftete im vergangenen Jahr einen Umsatz in Höhe von 20 Millionen Euro. In diesem Jahr sind 40 Millionen geplant. Mehr im aktuellen Insider-Podcast #EXKLUSIV

+++ Forto, früher als FreightHub bekannt, sucht weitere 50 Millionen US-Dollar. Die Jungfirma, die 2016 von Ferry Heilemann, Erik Muttersbach, Michael Wax und Fabian Heilemann gegründet wurde, vermittelt Aufträge zur Container-Beförderung an Transportunternehmen. Inven Capital, Iris Capital, Rider Global, Northzone, Cherry Ventures und der italienische Risikofonds H14 investierten zuletzt 50 Millionen US-Dollar in Forto. Insgesamt flossen schon 126 Millionen Dollar in das Logistik-Startup. Mehr im aktuellen Insider-Podcast #EXKLUSIV


+++ Der Helvetia Venture Fund, ein Ableger der Helvetia Schweizerische Versicherungsgesellschaft, investiert gemeinsam mit den Flixbus-Gründern eine siebenstellige Summe in das junge Auto-Abo-Startup Faaren. Die Bewertung liegt im zweistelligen Millionenbereich. Das 2018 gegründete B2B-Unternehmen unterstützt Autohändler, die ins Abo-Konzept einsteigen möchten. Mit dem frischen Kapital möchte das Unternehmen unter anderem “das Marketing ausbauen sowie die Produkt- und Software-Entwicklung weiter vorantreiben. Mehr im aktuellen Insider-Podcast #EXKLUSIV

+++ Der Berliner Kapitalgeber 468 Capital, hinter dem unter anderm Ex-Rocket-Macher Alexander Kudlich steckt, investiert eine sechsstellige Summe in Arive. Das Startup aus München bringt das FastAF-Konzept nach Deutschland. Die Jungfirma, die von Linus Fries, Maximilian Reeker gegründet wurde, möchte Retailern mit Hilfe von Micro Fulfilment Centern und einer Marktplatz-App eine günstige Option für Lieferungen unter 60 Minuten anbieten. Dabei geht es gezielt nicht um Lebensmittel, sondern andere E-Commerce-Produkte. Mehr im aktuellen Insider-Podcast #EXKLUSIV

+++ Die Noventic Group, die unter anderem intelligente Lösungen für das Ablesen von Heizungen anbietet, und die Altinvestoren investieren 38 Millionen Euro in tado – siehe Handelsblatt. In den vergangenen Jahren flossen bereits über 100 Millionen Dollar in tado, das 2011 von Christian Deilmann, Johannes Schwarz und Valentin Sawadski gegründet wurde. Zu den Investoren zählen unter anderem amazon, E.ON,  Total Energy Ventures, Target Partners und Shortcut Ventures. Im Geschäftsjahr 2019 erwirtschaftete das Unternehmen ein Rohergebnis in Höhe von 16,1 Millionen Euro – und damit deutlich mehr als im Jahr zuvor. Der Jahresfehlbetrag sank gleichzeitig deutlich – von 13,8 Millionen im Jahre 2018 auf rund 9,9 Millionen. Der Aufbau von tado kostete in den vergangenen Jahren bereits mehr als 54 Millionen. Mehr über tado

+++ Der amerikanische Investor Owl Ventures und Altinvestoren wie Cherry Ventures und Redalpine Venture Partners investieren 18 Millionen US-Dollar in Morressier. Das Berliner Startup, das 2014 von Sami Benchekroun und Justus Weweler gegründet wurde, digitalisiert akademische Konferenzen und den wissenschaftlichen Austausch. “Die Finanzierung ermöglicht es Morressier, sein Wachstum zu beschleunigen und den gesamten Wert virtueller und hybrider Konferenzen für sich zu erschließen. Möglich wird dies unter anderem durch die Einführung neuer Community- und Analysefunktionen”, teilt das Unternehmen mit. In den vergangenen Jahren sammelte das Morressier-Team bereits rund 4,5 Millionen Euro ein. Mehr über Morressier

+++ Capnamic Ventures, die NRW.Bank, NewForge, also Instana-Gründer Mirko Novakovic, und “Family Offices aus dem Handelsumfeld” investieren 7 Millionen Euro in aifora. Das Düsseldorfer Startup, das 2018 von Thomas Jesewski und David Krings gegründet wurde, positioniert sich als SaaS-Lösung für den Einzelhandel. aifora hilft Händlern und Marken, ihre Preise und Bestände kanalübergreifend zu optimieren und die Prozesse zu automatisieren. Der Service soll sich über ein Subscription-Modell refinanzieren. Mehr über aifora

+++ Future Industry Ventures, VR Ventures und weiterer Investoren investieren 4 Millionen Euro in das GraphTech Startup. Mit dem frischen Kapital möchte “das Startup das Wachstum finanzieren, bestehende Produkte ausbauen, die Integration in SAP und Salesforce vertiefen und die operative Expansion in die USA vorantreiben”. Palturai aus Hofheim am Taunus wurde 2014 von Tilo Walter gegründet. Die Jungfirma sieht sich als “Europas Marktführer für intelligente Netzwerkanalyse-Lösungen”. Palturai bietet inebsondere Visualisierungs-Tools an, die Daten aus offiziellen Quellen verwenden.


+++ Das junge Uhren-Startup Chronext peilt einen Börsengang an – siehe Reuters. “Chronext’s planned IPO in Zurich is expected to take place in September but could be brought forward to July if market conditions allow”, heißt es im Artikel. Die Bewertung soll bei bis zu 1 Millarde Euro liegen. Der niederländische Kapitalgeber Slingshot Ventures investierte zuletzt 10 Millionen Euro in das Luxusuhren-Startup, das zuvor schon rund 60 Millionen Euro eingesammelt hat. Zu den weiteren Investoren der Jungfirma gehören Endeit Capital, Tengelmann Ventures, Partech Ventures, Capnamic Ventures, NRW.BANK, InVenture Partners und Octopus Ventures. Chronext, das 2013 an den Start ging, konkurriert im Uhrensegment unter anderem mit Firmen wie Chrono24, Horando, Montredo und Watchmaster. Auch Chrono24 soll mit einem IPO liebäugeln. Mehr über Chronext 

Achtung! Wir freuen uns über Tipps, Infos und Hinweise, was wir in unserem #DealMonitor alles so aufgreifen sollten. Schreibt uns eure Vorschläge entweder ganz klassisch per E-Mail oder nutzt unsere “Stille Post“, unseren Briefkasten für Insider-Infos.

Startup-Jobs: Auf der Suche nach einer neuen Herausforderung? In der unserer Jobbörse findet Ihr Stellenanzeigen von Startups und Unternehmen.

Foto (oben): azrael74

#468-capital, #aifora, #aktuell, #arive, #berlin, #capnamic-ventures, #cherry-ventures, #chronext, #chrono24, #dusseldorf, #faaren, #future-industry-ventures, #helvetia-venture-fund, #ipo, #morressier, #newforge, #noventic-group, #owl-ventures, #palturai, #redalpine-venture-partners, #tado, #venture-capital, #verbraucherritter, #vr-ventures

#DealMonitor – StudySmarter sammelt 15 Millionen ein – Receeve bekommt 13,5 Millionen – Upvest sammelt 4 Millionen ein

Im aktuellen #DealMonitor für den 5 . Mai werfen wir wieder einen Blick auf die wichtigsten, spannendsten und interessantesten Investments und Exits des Tages in der DACH-Region. Alle Deals der Vortage gibt es im großen und übersichtlichen #DealMonitor-Archiv.


+++ Owl Ventures, Left Lane Capital, Business Angel wie Lars Fjeldsoe-Nielsen und Altinvestoren wie Dieter von Holtzbrinck Ventures (DvH Ventures) investieren 15 Millionen US-Dollar in StudySmarter. DvH Ventures investierte zuletzt im Sommer des vergangenen Jahres eine siebenstellige Summe in das Münchner EdTech. Das Spin-Off der TU München und LMU München, das 2017 von Simon Hohentanner, Maurice Kudhir, Christian Felgenhauer und Till Söhlemann gegründet wurde, positioniert sich als “intelligente Lern-App für das lebenslange Lernen, mit der individuelle Lernpläne, Karteikarten, Zusammenfassungen und Mindmaps schnell und einfach aus Lern-Skripten und Vorlesungsfolien erstellt werden können”. Mehr über StudySmarter

+++ Seaya Ventures und 14W sowie die Altinvestoren Mangrove, Speedinvest und Seedcamp investieren 13,5 Millionen US-Dollar in das Hamburger Startup Receeve. “The investment is targeted to fuel growth over the next 12 months and to expand”, teilt das Unternehmen mit. Das Hamburger FinTech, das 2019 von Paul Jozefak und Michael Backes (beide zuletzt Liquid Labs) gegründet wurde, positioniert sich als “digital debt servicing platform”. Anfang 2020 flossen beriets 4 Millionen Euro in das junge Unternehmen. Mehr über Receeve

+++ ABN AMRO Ventures, der Investmentableger der ABN AMRO Bank, investiert 4 Millionen Euro in das Berliner FinTech-Start-up Upvest. Das 2017 von Martin Kassing gegründete Startup bietet eine Schnittstelle an, mit der Unternehmen digitale Investment-Produkte anbieten können. Earlybird, Notion Capital, Partech Ventures, Speedinvest und HV Capital investierten zuletzt 5 Millionen Euro in Upvest. Insgesamt flossen nun schon 16 Millionen Euro in das junge Unternehmen. Mehr über Upvest

+++ Die Mediengruppe Klambt investiert in Moanah. Die Jungfirma aus Mannheim bietet Reinigungsmittel in Glasflaschen – samt einem Refill-System an. Die Sprühflaschen des Startups kann jeder zu Hause befüllen und mit Wasser auffüllen. “Sobald die Konzentrate leer sind, können sie nachbestellt werden”, heißt es auf der Website. Die Mediengruppe Klambt investierte zuletzt auch in Careloop, eine Personalvermittlungsplattform für ausländische Kranken- und Altenpflege.

Achtung! Wir freuen uns über Tipps, Infos und Hinweise, was wir in unserem #DealMonitor alles so aufgreifen sollten. Schreibt uns eure Vorschläge entweder ganz klassisch per E-Mail oder nutzt unsere “Stille Post“, unseren Briefkasten für Insider-Infos.

Startup-Jobs: Auf der Suche nach einer neuen Herausforderung? In der unserer Jobbörse findet Ihr Stellenanzeigen von Startups und Unternehmen.

Foto (oben): azrael74

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StudySmarter books $15M for a global ‘personalized learning’ push

More money for the edtech boom: Munich-based StudySmarter, which makes digital tools to help learners of all ages swat up — styling itself as a ‘lifelong learning platform’ — has closed a $15 million Series A.

The round is led by sector-focused VC fund, Owl Ventures. New York-based Left Lane Capital is co-investing, along with Lars Fjeldsoe-Nielsen (ex WhatsApp, Uber and Dropbox; now GP at Balderton Capital), and existing early stage investor Dieter von Holtzbrinck Ventures (aka DvH Ventures).

The platform, which launched back in 2018 and has amassed a user-base of 1.5M+ learners — with a 50/50 split between higher education students and K12 learners, and with main markets so far in German speaking DACH countries in Europe — uses AI technologies like natural language processing (NLP) to automate the creation of text-based interactive custom courses and track learners’ progress (including by creating a personalized study plan that adjusts as they go along).

StudySmarter claims its data shows that 94% of learners achieve better grades as a result of using its platform.

While NLP is generally most advanced for the English language, the startup says it’s confident its NLP models can be transferred to new languages without requiring new training data — claiming its tech is “scalable in any language”. (Although it concedes its algorithms increase in accuracy for a given language as users upload more content so the software itself is undertaking a learning journey and will necessarily be at a different point on the learning curve depending on the source content.)

Here’s how StudySmarter works: Users input their study goals to get recommendations for relevant revision content that’s been made available to the platform’s community.

They can also contribute content themselves to create custom courses by uploading assets like lecture slides and revisions notes. StudySmarter’s platform can then turn this source material into interactive study aids — like flashcards and revision exercises — and the startup touts the convenience of the approach, saying it enables students to manage all their revision in one place (rather than wrangling multiple learning apps).

In short, it’s both a (revision) content marketplace and a productivity platform for learning — as it helps users create their own study (or lesson) plans, and offers them handy tools like a digital magic marker that automatically turns highlighted text into flashcards, while the resulting “smart” flashcards also apply the principle of spaced repetition learning to help make the studied content stick.

Users can choose to share content they create with other learners in the StudySmarter community (or not). The startup says a quarter (25%) of its users are creators, and that 80% of the content they create is shared. Overall, it says its platform provides access to more than 25 million pieces of shared content currently.

It’s topic agnostic, as you’d expect, so course content covers a diverse range of subjects. We’re told the most popular courses to study are: Economics, Medicine, Law, Computer Science, Engineering and school subjects such as Maths, Physics, Biology and English.

Regardless of how learners use it, the platform uses AI to nudge users towards relevant revision content and topics (and study groups) to keep extending and supporting their learning process — making adaptive, ongoing recommendations for other stuff they should check out.

The ease of creating learning materials on the StudySmarter platform results in a democratization of high-quality educational content, driven by learners themselves,” is the claim.   

As well as user generated content (UGC), StudySmarter’s platform hosts content created by verified educationists and publishers — and there’s an option for users to search only for such verified content, i.e. if they don’t want to dip into the UGC pool.

“In general, there is no single workflow,” says co-founder and CMO Maurice Khudhir. “We created StudySmarter to adapt to different learner types. Some are very active learners and prefer to create content, some only want to search and consume content from other peers/publishers.”

“Our platform focuses on the art of learning itself, rather than being bound by topics, sectors, industries or content types. This means that anyone, regardless of what they’re learning, can use StudySmarter to improve how they learn. We started in higher education as it was the closest, most relevant market to where we were at the time of launch. We more recently expanded to K12, and are currently running our first corporate learning pilot.”

Gamification is a key strategy to encourage engagement and advance learning, with the platform dishing out encouraging words and emoji, plus rewards like badges and achievements based on the individual’s progress. Think of it as akin to Duolingo-style microlearning — but where users get to choose the subject (not just the language) and can feed in source material if they wish.

StudySmarter says it’s taken inspiration from tech darlings like Netflix and Tinder — baking in recommendation algorithms to surface relevant study content for users -(a la Netflix’s ‘watch next’ suggestions), and deploying a Tinder-swipe-style learning UI on mobile so that its “smart flashcards” can to adapt to users’ responses.

“Firstly, we individualise the learning experience by recommending appropriate content to the learner, depending on their demographics, demands and study goals,” explains Khudhir. “For instance, when an economics student uploads a PDF on the topic of marginal cost, StudySmarter will recommend several user-generated courses that cover marginal cost and/or several flashcards on marginal cost as well as e-books on StudySmarter that cover this topic.

“In this way, StudySmarter is similar to Netflix — Netflix will suggest similar TV shows and films depending on what you’ve already watched and StudySmarter will recommend different learning materials depending on the types of content and topics you interact with.

“As well, depending on how the student likes to learn, we also individualise the learning journey through things such as the smart flashcard learning algorithm. This is based on spaced repetition. For example, if a student is testing themselves on microeconomics, the flashcard set will go through different questions and responses and the student can swipe through the flashcards, in a similar way to Tinder. The flashcards’ sequence will adapt after every response.

“The notifications are also personalised — so they will remind the student to learn at particular points in the day, adapted to how the student uses the app.”

There’s also a scan functionality which uses OCR (optical character recognition) technology that lets users upload (paper-based) notes, handouts or books — and a sketch feature lets them carry out further edits, if they want to add more notes and scribbles.

Once ingested into the platform, this scanned (paper-based) content can of course also be used to create digital learning materials — extending the utility of the source material by plugging it into the platform’s creation and tracking capabilities.

“A significant cohort of users access StudySmarter on tablets, and they find this learning flow very useful, especially for our school-age pupils,” he adds.

StudySmarter can also offer educators and publishers detailed learning analytics, per Khudhir — who says its overarching goal is to establish itself as “the leading marketplace for educational content”, i.e. by using the information it gleans on users’ learning goals to directly recommend (relevant) professional content — “making it an extremely effective distribution platform”, as he puts it.

In addition to students, he says the platform is being used by teachers, professors, trainers, and corporate members — ie. to create content to share with their own students, team members, course participants etc, or just to publish publicly. And he notes a bit of a usage spike from teachers in March last year as the pandemic shut down schools in Europe. 

StudySmarter co-founders, back from left to right: Christian Felgenhauer (co-founder & CEO), Till Söhlemann (co-founder); front: Maurice Khudir (co-founder & CMO), Simon Hohentanner (COO & co-founder). Image credits: StudySmarter

What about copyright? Khudir says they follow a three-layered system to minimize infringement risks — firstly by not letting users share or export any professional content hosted on the platform.

Uploaded documents like lecture notes and users’ own comments can be shared within one university course/class in a private learning group. But only UGC (like flashcards, summaries and exercises) can be shared freely with the entire StudySmarter community, if the user wants to.

“It’s important to note that no content is shared without the author’s permission,” he notes. “We also have a contact email for people to raise potential copyright infringements. Thanks to this system, we can say that we never had a single copyright issue with universities, professors or publishers.”

Another potential pitfall around UGC is quality. And, clearly, no student wants to waste their time revising from poor (or just plain wrong) revision notes.

StudySmarter says it’s limiting that risk by tracking how learners engage with shared content on the platform — in order to create quality scores for UGC — monitoring factors like how often such stuff is used for learning; how often the students who study from it answer questions correctly; and by looking the average learning time for a particular flashcard or summary, etc.

“We combine this with an active feedback system from the students to assign each piece of content a dynamic quality score. The higher the score is, the more often it is shown to new users. If the score falls below a certain threshold, the content is removed and is only visible to the original creator,” he goes on, adding: “We track the quality of shared content on the creator level so users who consistently share low-quality content can be banned from sharing more content on the platform.”

There are unlikely to be quality issues with verified educator/publisher content. But since it’s professional content, StudySmarter can’t expect to get it purely for free — so it says it “mostly” follows revenue-sharing agreements with these types of contributors.

It is also sharing data on learning trends and to help publishers reach relevant learners, as mentioned above. So the information it can provide education publishers about potential customers is probably the bigger carrot for pulling them in.

“We are very happy to say that the vast majority of our content is not created or shared on StudySmarter for any financial incentive but rather because our platform and technology simply make the creation significantly easier,” says Khudir, adding: “We have not paid a single Euro to any user on StudySmarter to create content and do not intend to do so going forward.” 

It’s still early days for monetization, which he says isn’t front of mind yet — with the team focused on building out the platform’s global reach — but he notes that the model allows for a number of b2b revenue streams, adding that they’ve been doing some early b2b monetization by working with employers and businesses to promote their graduate programs or to support recruitment drives. 

The new funding will be put towards product development and supporting the platform’s global expansion, per Khudir.

“We’ve run successful pilots in the U.K. and U.S. so they’re our primary focus to expand to by Q3 this year. In fact, following a test pilot in the U.K. in December, we became the number one education app within 24 hours (ahead of the likes of Duolingo, Quizlet, Kahoot, and Photomath), which bodes well!” he goes on. 

“Brazil, India and Indonesia are key targets for us due to a wider need for digital education. We’re also looking to launch in France, Nordics, Spain, Russia and many more countries. Due to the fact our platform is content-agnostic, and the technology that underpins it is universal, we’re able to scale effectively in multiple countries and languages. Within the next 12 months, we will be expanding to more than 12 countries and support millions of learners globally.”

StudySmarter’s subject-agnostic, feature-packed, one-stop-shop platform approach sets it apart from what Khudir refers to as “single-feature apps”, i.e. which just help you learn one thing — be that Duolingo (only languages), or apps that focus on teaching a particular skill-set (like Photomath for maths equations, or dedicated learn-to-code apps/courses (and toys)). 

But where the process of learning is concerned, there are lots of ways of going about it, and no one that suits everyone (or every subject), so there’s undoubtedly room for (and value in) a variety of approaches (which may happily operate in parallel). So it seems a safe bet that broad-brush learning platforms aren’t going to replace specialized tools — or (indeed) vice versa.

StudySmarter names the likes of Course Hero, StuDocu, Quizlet and Anki as taking a similar broad approach — while simultaneously claiming they’re not doing it in “quite the same, holistic, end-to-end, all-in-one bespoke platform for learners” way.  

Albeit, some of those edtech rivals are doing it with a lot more capital already raised. So StudySmarter is going to need to work smart and hard to localize and grab students’ attention as it guns for growth far beyond its European base.


#anki, #apps, #artificial-intelligence, #balderton-capital, #duolingo, #education, #europe, #fundings-exits, #holtzbrinck-ventures, #lars-fjeldsoe-nielsen, #learning, #left-lane-capital, #munich, #natural-language-processing, #netflix, #new-york, #nlp, #ocr, #optical-character-recognition, #owl-ventures, #quizlet, #studysmarter, #tc, #tinder, #united-kingdom

Kids-focused fintech Greenlight raises $260M in a16z-led Series D, nearly doubles valuation to $2.3B

Greenlight, the fintech company that pitches parents on kid-friendly bank accounts, has raised $260 million in a Series D funding round that nearly doubles its valuation to $2.3 billion.

The funding comes just months after the Atlanta-based startup landed $215 million in funding at a $1.2 billion valuation. With the latest round, Greenlight has now raised over $550 million.

Andreessen Horowitz (a16z) led its Series D, which also included participation from return backers TTV Capital, Canapi Ventures, Wells Fargo Strategic Capital, BOND, Fin VC, Goodwater Capital, as well as new investors Wellington Management, Owl Ventures and LionTree Partners.

Since it launched its debit cards for kids in 2017, the company has managed to set up accounts for more than 3 million parents and children, who have saved more than $120 million through the app. That’s up from 2 million parents and kids having saved $50 million at the time of its September 2020 raise.

Overall, Greenlight says it has “more than tripled” YoY revenue, more than doubled the number of parents and kids on its platform and doubled the size of its team within the past year. 

“Greenlight has quickly emerged as a leader in the family finance category,” said Andreessen Horowitz general partner David George, who will join Greenlight’s board of directors, in a written statement. “Greenlight was built to help parents raise financially-smart kids, and with its breakthrough combination of easy-to-use money management tools and educational resources, the company is well-positioned to become one of the most loved and trusted brands for families around the world.”

The company pitches itself as more than just a debit card, with apps that give parents the ability to deposit money in accounts and pay for allowance, manage chores and set flexible controls on how much kids can spend. In January, Greenlight introduced its educational investing platform for kids — Greenlight Max. Through that platform, kids can research stocks with analysis from Morningstar and actually make real investments in companies like Apple, Tesla, Microsoft and Amazon as long as their parents approve.

As TechCrunch previously reported, it’s a potentially massive business that can lock in a whole generation to a financial services platform, which is likely one reason why a whole slew of companies have launched with a similar thesis. There’s Kard, Step, Till Financial and Current pitching similar businesses in the U.S. and Mozper recently launched from Y Combinator to bring the model to Latin America. (Step and Current also announced big rounds today, while Till Financial announced its seed round last week. Notably, a16z also led Current’s raise).

“Our vision at Greenlight is to create a world where every child grows up to be financially healthy and happy,” said Tim Sheehan, co-founder and CEO of Greenlight. “Today’s financing will enable us to bring even more value to families as we continue to introduce new innovative products that shine a light on the world of money.”

 Greenlight says it will use the new capital to accelerate product development to add more financial services to its platform as well as to invest further in strategic distribution partnerships and geographic expansion. It also plans to hire another 300 employees over the next two years, with an emphasis on engineers.


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Mighty Networks raises $50M to build a creator economy for the masses

Mighty Networks, a platform designed to give creators and brands a dedicated place to start and grow communities, has closed on $50 million in a Series B funding round led by Owl Ventures.

Ziff Capital Partners and LionTree Partners also participated in the financing, along with existing backers Intel Capital, Marie Forleo, Gretchen Rubin, Dan Rosensweig, Reid Hoffman, BBG Ventures and Lucas Venture Group. The investment brings Palo Alto-based Mighty Networks’ total raised since its 2017 inception to $67 million. 

Mighty Networks founder and CEO Gina Bianchini — who started the company with Tim Herby and Thomas Aaron — is no stranger to building nurturing environments for community building. Previously, she was the CEO and co-founder of Ning, where she led the company’s rapid growth to three million Ning Networks created and about 100 million users around the world in three years. 

With Mighty Networks, Bianchini’s goal is to build “a creator middle class” founded on community memberships, events and live online courses.  

“Basically we have a platform for people to create communities the way that they would create e-commerce stores,” she told TechCrunch. “So what Shopify has done for e-commerce, we’re doing for digital subscriptions and digital payments where the value is around a community that is mastering something interesting or important together, and not just content alone.”

The company’s flagship Business Plan product is aimed at new creators with the goal of giving them an easy way to get started with digital subscriptions, Bianchini said. Established brands, organizations and successful creators use the company’s Mighty Pro plan to get everything Mighty Networks offers on their own branded iOS, iPad and Android apps. 

Mighty Networks — which operates as a SaaS business — has seen impressive growth. In 2020, ARR climbed by “2.5x” while annual customer growth climbed by 200%. Customers are defined as paying creators who host their community, courses and events on their own Mighty Network. The company also saw a 400% annual growth in payments, or rather in subscriptions and payments where a creator or brand will sell a membership or an online course.

The pandemic was actually a boon to the business, as well as the fact that it launched live events last year.

“We were able to help many businesses quickly move online — from yoga studios to leadership speakers and consultants — and now that the world is coming back, they’ll be able to use the features that we’ve built into the platform from day one around finding members, events and groups near them, as well as making everything via not just the web but mobile apps,” Bianchini said.

One of the startup’s goals is to help people understand that they don’t need massive amounts of followers (such as 1 million followers on TikTok) to be successful creators. For example, a creator charging 30 people for a subscription that amounts to around $1,000 a year can still pull in $30,000 a year. So while it’s not huge, it’s certainly still substantial — hence the company’s intent to build a “creator middle class.”

Mighty Networks has more than 10,000 paying creators, brands and coaches today. Users include established creators and brands such as YouTube star Adriene Mishler, Xprize and Singularity University founder Peter Diamandis, author Luvvie Ajayi Jones, comedian Amanda Seales, Girlboss founder Sophia Amoruso and brands such as the TED conference and wellness scheduling platform MINDBODY.

“Content alone will kill the creator economy,” Bianchini said. “We can’t build a thriving creator movement on an exhausting, unfair dynamic where content creators rent audiences from big tech platforms, are required to produce a never-ending stream of content and get paid pennies for it, if they get paid at all. Creators need to own their own community on the internet, where members meet each other and get results and transformation.” 

Owl Ventures Managing Director Amit Patel said his firm was impressed by Mighty Networks before it even met the company.

“No company in this space has more loyal, passionate believers, and when we saw firsthand that creators could successfully build paid communities and online courses on a Mighty Network with as few as 30 members, we wanted to be a part of unlocking this creator middle class for a million more creators,” Patel said in a written statement.

The company plans to use its new capital on product development across media types, payment options and expansion into new markets. 

Earlier this month, Pico, a New York startup that helps online creators and media companies make money and manage their customer data, announced that it had launched an upgraded platform and raised $6.5 million in new funding. Essentially, the company is building what it considers to be an operating system for the creator market.

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SoftBank bets big on a ‘digital Ellis Island’

Welcome Tech, which has built a digital platform aimed at immigrants and their families, has raised $35 million in a Series B funding round co-led by TTV Capital, Owl Ventures and SoftBank Group Corp.’s SB Opportunity Fund.

Crosscut Ventures, Mubadala Capital, Next Play Capital and Owl Capital also participated in the financing, which brings the Los Angeles-based company’s total raised to $50 million since its 2010 inception. Welcome Tech, which has an office in San Antonio, Texas, raised an $8 million Series A in March of 2020.

Built by immigrants for immigrants, Welcome Tech aims to do just what its name indicates — help immigrants feel more welcome, have an easier transition and achieve greater success when moving to the United States.

The company’s approach was different in that rather than launch a banking product and then set out to earn the trust of the community it aims to serve, it first worked hard to earn that trust and understand the community’s needs. 

So in its first years of existence, Welcome Tech has focused on building out a platform that provides educational resources, information and services that “they need to thrive in a  new country.” Its efforts are initially primarily focused on the Hispanic community in the U.S.

The goal of its platform, dubbed SABEResPODER (meaning Knowledge is Power in Spanish), is to serve as “a widely recognized and trusted resource” to members of the Hispanic community in the U.S., the company says.

Armed with knowledge and data that it has gathered over the years, Welcome Tech six months ago launched a banking service, including a debit card and bilingual mobile app. And in January, it launched a monthly subscription offering that gives users access to discounted resources such as medical and dental professionals.

Gardiner Garrard, co-founder and partner, TTV Capital, points out that the Hispanic market represents the largest minority cohort in the U.S., with a population of 62.8 million. 

“That said, less than half of Hispanic households are ‘fully banked’, meaning they cannot open an account, which then negatively impacts their ability to secure other products or services,” Garrard said. “To not serve this community is a major failure. Welcome Tech is addressing this issue head on.”

Today, Welcome’s platform is approaching 3 million active users, according to co-founder and CEO Amir Hemmat. Its ultimate goal, he said, is to serve as “digital Ellis Island.” 

“The way we leave immigrants’ success to chance is pretty crazy,” he told TechCrunch. “If you think of countries the way you think of companies and the way they want to attract and retain…here, we almost do the opposite.”

Image Credits: Welcome Tech

In particular, Hemmat and co-founder Raul Lomeli-Azoubel recognized that access to financial services was crucial to immigrants’ success.

“Although we ultimately see ourselves building towards a better future for immigration and a broader platform, the foundation and beachhead for that is definitely in financial services,” Hemmat said.  

Welcome offers a free banking account that is fully bilingual for English and Spanish speaking communities with “key features that are very tailor made for this community.”

A number of new digital banks targeting Latino and immigrant communities in general have emerged in recent years, including TomoCredit and Greenwood. Welcome aims to differentiate itself from competitors in being a more broad-based platform. Its subscription offering — at $10 a month — does things like offer discounts to healthcare professionals and free televisits, for example.

“When we dug in, we realized that immigrants are not being provided data-driven recommendations,” Hemmat said. “It’s very much a word of mouth and trial of error, and in some cases highly predatory, experience. We’re working to aggregate a historically fragmented audience and that gives us massive leverage to source better offerings, pricing and experiences for consumers across multiple categories.”

The company plans to use its new capital to build more partnerships so that it can do the above, as well as spread awareness about its services.

Gosia Karas, vice president and head of growth-stage investments at SoftBank’s Opportunity Fund, told TechCrunch that the fact that the immigrant population in the U.S. is “growing really fast and underserved creates an opportunity for someone to come in and serve them well with a financial services offering.”

In particular, SoftBank was attracted to Welcome Tech’s approach to truly understand, and gather data around, its target market.

“Before even jumping head first into building a fintech company, they did a lot of work prior,” Karas said. “They spent years building an understanding of this audience of the immigrant population, including building trust within that demographic. And at the same time, they have been building targeted content. This serves as a really great backbone to build a company that is very well-suited to serve that audience and to roll out things like the debit card and other financial services offerings.”

#bank, #banking, #crosscut-ventures, #debit-card, #diversity, #economy, #finance, #financial-services, #fintech, #funding, #fundings-exits, #greenwood, #los-angeles, #mubadala-capital, #owl-capital, #owl-ventures, #recent-funding, #softbank-group, #startups, #tc, #ttv-capital, #united-states, #venture-capital, #vodafone, #welcome-tech

Coursera prices IPO at top end of its range in boon to edtech valuations

Coursera, an edtech unicorn, will begin its life today as a public company after pricing its IPO at $33 per share yesterday evening. Using a simple share count, the company’s valuation comes to $4.30 billion, or $4.38 billion if its underwriters exercise their option to purchase shares at its offering price.

A more diluted share count pushes the valuation of Coursera over the $5 billion mark.

Coursera was last valued at $2.57 billion after raising $130 million in mid-2020, per PitchBook data. The company’s simple valuation is around a 67% gain on that final private figure; that gain rises to just over 70% if its underwriters purchase their available shares.

Using a diluted valuation, Coursera has roughly doubled its final private price. In under a year. For edtech investors looking to Coursera to help determine public market sentiment regarding the exit-value of their investments, TechCrunch reckons it’s a pretty good day.

The amount of private capital at play in edtech startups is staggering; billions and billions of potential returns could get a further shot in the arm if Coursera trades well this morning. And the very same billions of invested capital could lose the smile that Coursera’s seemingly-strong IPO pricing brought them.

There are other edtech debuts in the wings. TechCrunch has covered Nerdy’s plans to go public, via a SPAC, for example.

Private investors, who put well north of $10 billion into edtech companies globally in 2020, are modestly bullish on edtech exit volume this year. In a prior TechCrunch venture capitalist survey, GSV managing partner Deborah Quazzo said the following:

Exit volume is rising already with a wide range of strategic and financial buyers of edtech companies — something that didn’t exist before. You will see numerous high-value exits in the first half of 2021. It’s the public market “exits” that have really lagged and that I hope turns around in 2021 and 2022. There are numerous global companies that could go public and the addition of SPAC IPOs creates another positive dynamic.

The Coursera IPO pricing at least, meets the mark for a high-value exit. Which could lead where? Extending Quazzo’s thinking a single step, perhaps a strong Coursera first-day trading session will bolster SPAC interest in taking more edtech startups and unicorns public.

Such a move could lock-in valuations for a number of currently illiquid edtech startups, and perhaps begin to return chunks of invested capital in the historically out-of-fashion technology sector.

Adding to that sentiment is Owl Ventures’ managing director Ian Chiu, who told TechCrunch in the same survey that “the pipeline for potential IPO candidates coming from the edtech sector continues to grow larger.” Let’s hope — parsing the Coursera S-1 filing was good fun and we’d like another at-bat with an edtech IPO document.

More when Coursera trades.

#coursera, #deborah-quazzo, #edtech, #education, #ipo, #owl-ventures, #tc

Leap raises $17 million to help Indian students study abroad

Hundreds of thousands of teenagers and young adults get on flights each year from India to a foreign land to pursue higher education. Upon landing, they face a myriad of challenges: They don’t have a local credit history, so they can’t avail a range of financial services including a loan or a credit card — at least not without paying a premium for it.

For banks and other financial institutions, there is an increased risk when they engage with foreigners, so they charge more. An Indian student studying in the U.S., for instance, borrows money at an interest rate over 13%, compared to their local peers who can secure the same amount of credit, if not more, at less than half of that interest rate.

Leap, a two-year-old startup with headquarters in San Francisco and Bangalore, is attempting to solve this problem and many others. The startup grants loans to students at fair interest rate by evaluating the data they generated — alternative and derived — in India itself.

Since the last time we wrote about Leap, the startup has evolved to address several other problems students face, explained Arnav Kumar, co-founder of Leap, in an interview with TechCrunch.

Kumar said Leap today is helping students with guidance on admission, visa, as well as test preparation. Leap has also developed a social network of sorts where over half a million students are talking to one another and use the platform’s other services to get admission in a college abroad.

About ten years ago, when I was looking to join an engineering college, I reached out to several individuals who were already studying in the colleges I had shortlisted. Turns out, over a million students in India do the exact same thing each year when they are about to begin their college life. (If I may complete the loop, I did graduate and have a bachelor’s degree in CSE somewhere in the house.)

Kumar, who previously served an Associate VP at venture firm Elevation Capital, said Leap’s community today is replicating the offline-behavior. Some students, to be sure, reach out to others on LinkedIn, or Facebook. But by just focusing on one problem, Leap is attempting to become the community for students who are looking to pursue higher education. (Its pages are indexed on Google search for better visibility.)

Leap Finance founders pose for a picture

There is a massive opportunity for startups to better solve these problems.

“India is the second-largest market globally for overseas enrolment, and in just a decade higher education enrolments are up by 8 million. This presents a huge opportunity in an otherwise fragmented landscape. Leap is addressing this huge opportunity through its end-to-end tech platform and a community-first approach,” said Amit Anand, Founding Partner of Jungle Ventures, in a statement.

Vaibhav Singh, the other co-founder of Leap, said in an interview that students from India take admission in over 5,000 schools and universities abroad each year to study tens of thousands of courses.

“So the choice spectrum is really, really wide and you need experts who can help you make the right choice. This is the most important decision you or your family will make,” he said.

Investors have spotted an opportunity in this space, too — and are backing Leap. The startup said on Tuesday that it has raised $17 million in its Series B round. The new financing round was led by Singapore-based Jungle Ventures, along with Sequoia Capital India and Owl Ventures. The startup has to-date raised $22.5 million.

The global pandemic prevented many Indian students from traveling abroad. This year, more than 700,000 students are estimated to leave India to pursue higher education. Leap co-founders said they are working to serve 150,000 of such students this year.

Leap said it plans to deploy the fresh capital to expand its tech team and reach more geographies. The startup currently helps students join colleges in several countries including the U.S., Canada, UK, and Australia. Singh said Leap is also looking to hire some tech and business talent.

“2020 was a tough year for international education with Covid related travel restrictions. We are impressed by the resilience of the Leap team during the last year, where not only have they served hundreds of students with their financing solutions but have also expanded with Leap Scholar providing counselling to thousands of Indian students looking to study abroad. This vertically integrated strategy has materially strengthened the moats for Leap,” said Ashish Agrawal, Principal at Sequoia India, which wrote its first check to Leap before the startup had a product.

#apps, #asia, #education, #finance, #funding, #india, #jungle-ventures, #leap-finance, #owl-ventures, #sequoia-capital-india

Codecademy eyes the enterprise with $40 million in new capital

After going over four years without raising any capital, coding class platform Codecademy has raised a new tranche of money: a $40 million Series D round led by Owl Ventures, with participation from Prosus and Union Square Ventures.

The startup is the latest edtech business to bring on capital after years without it, a list that includes ClassDojo, CourseHero, Quizlet and Udacity. But founder Zach Sims, who began the company in 2011 as a Columbia student, says that Codecademy’s growth, and hunger for new capital, isn’t due to a pandemic bump.

“A lot of that edtech bump came in K-12 and college solutions, or in leisure educational things like MasterClass,” Sims said. “Ours was less pandemic-induced.”

The business, which helps students and employees learn how to code in an interactive environment, is currently bringing in $50 million in annual recurring revenue. That figure is on track with Codecademy’s normal growth trajectory, which has been doubling since 2018. The startup has still seen some areas of growth. It took Codecademy four years to reach their first 100,000 users; however, they added 50,000 more paying users in their fifth year alone.

Codecademy’s funding signals that investors aren’t just looking for exponential growth, they are looking for sustainable, historical growth. The startup has been cash-flow positive for years, and has $20 million of its $30 million Series C, closed in 2016, still in the bank. Two-thirds of today’s capital is going straight to the bank, Sims says.

Still, raising itself costs money in the form of equity for founders and a startup. So why raise if you still have cash and aren’t struggling to keep up demand?

Sims says that the new cash will be used to acquire businesses, grow internationally in India and other countries, and hire. He also wants to “invest deeply” in a paid product it launched in the wake of the pandemic, Codecademy For Business. The product is Codecademy’s foray into selling coding classes for the enterprise, a shift from its direct-to-consumer route.

Codecademy For Business launched in beta last year and grew to 600 paying clients. Half of those customers are non-technology companies like banks, consulting firms and small businesses that want to train employees in data literacy and tech-specific programing. Sims says that the product was launched due to customer demand, and piggybacks on what investors see as an awakening among companies that it is necessary to train and reskill employees.

The growth mirrors the gains recently enjoyed by Udemy. The re-skilling company similarly has an enterprise and consumer product, but is seeing more monetary gains in the former. We scooped last month that Udemy for Business has secured 7,000 customers, and is bringing in roughly $200 million in ARR.

Sims says that its enterprise operation, which competes with products like Udemy or Coursera, requires upfront research and development “before it starts to pay itself back.” He thinks that building a bottoms-up enterprise product, fueled by tens of millions of Codecademy users, will be both the big opportunity and a big challenge for the company. The end goal here for Codecademy is to have a 50% split between its consumer and enterprise business.

“The number one biggest differentiator has been interactivity,” Sims said. “Everyone is tired of Zoom, and our thesis since the beginning is that video is not the best way to learn, and that learning by doing is.”

While the startup wouldn’t disclose valuation, Codecademy’s growth feels mature and unicorn-like. The startup is diversifying revenue, adding offensive cash to its bank, and even not-so-subtly added a CFO from Chegg to its ranks. IPOs are in the air.

#codecademy, #coding, #edtech, #education, #owl-ventures, #recent-funding, #startups, #tc, #zach-sims

SplashLearn raises $18 million for its game-based edtech platform

SplashLearn, a 10-year-old U.S.-headquartered edtech startup that teaches children through a game-based curriculum, has raised $18 million in a new financing round as it looks to expand to more markets.

San Francisco-based Owl Ventures led the Series C funding round in SplashLearn, and Accel, which had earlier invested $7 million in the startup’s Series B, also participated in the new round.

In an interview with TechCrunch, SplashLearn co-founder and chief executive Arpit Jain said one of the biggest hurdles the education system faces today is that kids do not wish to learn, so you have to broach the subject in a way they find engaging.

His startup offers math and reading courses to students in pre-kindergarten to grade five. It has developed, with guidance from teachers and other experts, over 4,000 games and other interactive activities to explain various concepts to the children.

In a demo, Jain showed an adventure game that was riddled with hurdles. A kid needed to visually apply the concept of addition to progress forward in the game. “When the kids are engaged, there is improvement in their learning outcome,” said Jain.

SplashLearn platform additionally provides 15 minutes to 20 minutes of personalized learning experience to each student every day, he said.

The startup charges $12 a month to parents for its service. Alternatively, the service is free for schools. Currently, one in every three schools in the United States use SplashLearn, Jain said.

“One of our goals has been to make quality education available to students for free. Our business model has enabled us to work on this,” he said. SplashLearn doesn’t reach out to schools, he said. Teachers use our platform, and if they like the offering, they make the case for wider adoption at the school, said Jain, who like the other three co-founders, is an alumni of IIT Kharagpur.

Image: SplashLearn

The team first created an edtech platform that was similar to what Coursera has evolved into over the past decade. But their previous venture failed to gain traction as the Indian market, which had fewer than 50 million internet users then, wasn’t ready for it, said Jain.

SplashLearn today caters to more than 40 million registered students on its platform, 10 million of whom joined last year as the coronavirus shut schools worldwide. More than 750,000 teachers have also joined the platform.

The startup is currently largely serving students in the United States, which accounts for 80% of its revenue. But students from over 150 other markets, including the UK, Australia, Canada and India use the platform today.

“SplashLearn is well poised to bring about a distinct change in the digital learning space with its unique blend of scientifically designed curriculum and its pedagogical methods with global appeal. SplashLearn fits into our objective of supporting innovative companies in the edtech space, helping drive a paradigm shift in the way education is imparted, bringing it to scale,” said Amit A. Patel Managing Director, Owl Ventures, in a statement. Patel is joining the SplashLearn’s board along with Abhinav Chaturvedi, a partner at Accel.

Last year, SplashLearn also started a tutoring service for kids, where teachers teach a group of three to five students. This service costs $10 to $25 an hour. “Even at this cost, we are offering the service at a fraction of what it would cost students in a private tuition,” he said.

The tutoring service is currently available in the U.S., and Jain said the startup plans to grow it within the country this year.

#accel, #apps, #edtech, #education, #funding, #owl-ventures

13 investors say lifelong learning is taking edtech mainstream

The venture potential of a startup that caters to individual students — instead of a slow-moving, small-pocketed institution — has a bullish aura that attracts investors.

Add in a pandemic that forced many to embrace remote learning overnight, and it makes sense that we have seen companies like Outschool and ClassDojo turn first profits while startups like Quizlet and ApplyBoard reached $1 billion valuations.

Last year brought a flurry of record-breaking venture capital to the sector. PitchBook data shows that edtech startups around the world raised $10.76 billion last year, compared to $4.7 billion in 2019. While reporting delays could change this total, VC dollars have more than doubled since the pandemic began. In the United States, edtech startups raised $1.78 billion in venture capital across 265 deals during 2020, compared to $1.32 billion the prior year.

In today’s survey, thirteen top edtech investors shared their thoughts on how growth of lifelong learning is reshaping the industry. Given the sudden extinction of snow days and yeast shortages brought on by student bakers in the early days of the pandemic, it’s easy to see how remote education extends beyond traditional school hours. As learners become more multi-layered and nuanced, so have the edtech companies that back them. 

This was a recurring theme in today’s survey, signaling a shift in how investors approach hybrid learning. The evolution of post-pandemic education will be complex, if not aggressively competitive among the growing cohort of well-capitalized edtech companies. While we asked investors about their post-pandemic tastebuds back in July, much has changed since. Higher education didn’t combust like some expected today, and today, many predict that K-12 students will return to pre-COVID formats after vaccinations are widespread. 

It puts startups in a difficult spot: if 2020 was about enabling video-based teaching, what might emerge from 2021? Integration between different edtech apps? New student collaboration tools? Are employer-led up-skilling and a renewed interest in self-improvement enlarging edtech’s TAM?

Here are the investors we spoke to, along with their areas of interest and expertise:

  • Deborah Quazzo, managing partner, GSV Ventures (an education fund backing ClassDojo, Degreed, Clever)
  • Ashley Bittner, founding partner of Firework Ventures (a future of work fund with portfolio companies LearnIn and TransfrVR)
  • Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)
  • John Danner, managing partner, Dunce Capital (an edtech and future of work fund with portfolio companies Lambda School and Outschool)
  • Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multi-stage generalist fund with investments including Forage, Clever, and Outschool)
  • Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly-valued companies including Byju’s, Newsela, and Masterclass) 
  • Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy, and BibliU) 
  • Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer, and Aula)
  • Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)
  • Daniel Pianko, co-founder and managing director, University Ventures (a higher ed and future of work fund that is backing Imbellus and Admithub)
  • Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet, Duolingo)
  • Andreata Muforo, partner, TLCom Capital (a generalist fund backing uLesson)

Deborah Quazzo, managing partner, GSV Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

For k12, use of digital products and platforms will now be very “normal” – companies like Lexia and Dreambox and Nearpod. Maybe this drives home usage of some products traditionally used only in schools like Lexia. Students of all ages are now very facile with zoom, this can pave the way for more zoom based synchronous learning offerings including extracurricular learning like music, dance etc. schools are now fully wired – maybe we will see schools implement home based learning programs – it’s where students spend half their time.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

Edtech cos need to stay away from the me too solutions. We have seen 20 creator led learning platforms across “preK to Gray” learning in addition to incumbents like Teachable and very few have an ability to build a moat in my view. Unless someone has a very fresh take, I think that ship has sailed. Hopefully as white spaces fill with competitors, new white spaces will emerge. Emerging tech – AI/NLP/ML/VR – will continue to push the envelope. We are still not driving enough people to competency whether in prek12, higher ed or workforce so the opportunity remains vast.

How has edtech’s boom impacted your dealmaking? Has the new interest from generalist investors made valuations too bubbly, or is the market growth helping everyone?

We met on zoom with over 800 founding teams in covid all over the world. We invested in 14 new companies and are just finishing rounds in 2 more. Valuation pressures are across tech sectors. Id argue that education still lags average tech. the question for edtech is whether there is potential for a $100B company in the sector – will TAMs support it.

Ashley Bittner, founding partner, Firework Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

As it relates to our thesis, I believe that the role of employers is changing. Pre-COVID, it was estimated that as much as 1/3 of the US workforce would need to change jobs by 2030. Employers cite skills gaps as a top 3 business concern to stay competitive. Our thesis is that employers will take on more responsibility for reskilling their current workforce, and that training will become job-embeded (rather than only trying to hire to address the challenge.) Degreed was the first wave of this… Learn In is an example of the next step in this evolution. As employers look to provide more skills training (rather than compliance training), we believe that more will come from external sources (CEOs say they are unprepared to meet the reskilling challenge with existing internal resources) and that much of this training will be provided online and during work hours (to address the time barrier that is an equity issue.) I also see an opportunity for modalities like VR to become more popular as we shift to more digital and remote solutions (e.g TRANSFR.) Stats from McKinsey research.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures? In US pre-K and K-12, high customer fragmentation (16,000 school districts, 100K+ schools…pre-K even more fragmented with little public investment), long sales cycles, budget, pedagogy, and regulation. TAM. Relatively low consumer spend on education relative to other markets. Opportunities – increasing access to broadband, increase in device penetration. In FOW, increased recognition that reskilling and upskilling is a business imperative, company culture matters for competitiveness, increased focus on DEI.

Jomayra Herrera, principal, Cowboy Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?
I think activities that are fundamentally better in person will go back to [being] in person (e.g., sports, music and other enrichment activities). I think that new technology educators may have adopted during the pandemic that they have found to be helpful to their instruction will remain but all the “nice to haves” will likely fall to the wayside. We have a thesis at Cowboy that supplemental education (e.g., Juni Learning, Reconstruction or Outschool) will likely stay online, because parents will not have to worry about driving their kids to learning centers and these companies have the opportunity to make the learning fun.
What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?
For companies focused on K-12 students, it’s still really challenging to sell into schools and school districts because of the long sales cycle. This will likely become even harder, as local and state budgets tighten. In regard to what is fading, I think that tools that don’t solve a real need for educators, students and/or parents or don’t have demonstrated efficacy when it comes to student outcomes will start to fade. Consumers, especially after the pandemic, seem to be more aware of what technology has to offer and have lower tolerance for tools not having a demonstrable impact.For companies that are targeting adult learners, the biggest hurdle continues to be customer acquisition and building a brand that learners can actually trust. As the space starts to mature, consumers are getting more aware of the questions they should be asking (e.g., graduation and placement outcomes) and are less [fooled] by clever marketing.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?
I hope that in this pandemic we’ve realized how critical our educators are to our children’s success and we pay them more 🙂 Incentivizing our best talent to get into and stay in teaching is a critical lever we can pull to improve education.
For K-12, I expect that there will be more comfort with technology in the classroom and that tech can be partnered with in-person instruction in a way that supercharges the educator with the data needed to personalize their instruction.
For higher ed, I expect that there will be an acceleration in online learning for adults as they continue to look to reskill or upskill. There will be more opportunities to do self-paced online learning that is effective and affordable.

John Danner, managing partner, Dunce Capital

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

In K-12, education will probably continue to look much like it did, because the majority of parents are clear that child care is the principal value for their kids being at school. That said, a minority of parents are certainly rethinking education after witnessing what their children were actually learning every day for a year. My opinion is that we will continue to see a disaggregation of this care function from academics. Here’s a piece I wrote about that, which has accelerated significantly this year.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

For vocational schools with a “free until you get a job” model like Lambda or SV Academy, it’s all about job placement. Lambda has had a lot of success with their new fellowship model, which has allowed them to scale significantly. For a lot of early childhood and K-12 companies working online, it’s about new parent behaviors and whether you can develop a habit like Outschool has done. For senior learning like what GetSetUp does, finding the reimbursement models through healthcare is probably the key.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

I think we are in a transition to more and more academics happening in the cloud. Right now, that’s all about live experiences and human in the loop. In five years, I think we will begin seeing a significant impact of AI replacing many human functions.

#andreata-muforo, #bessemer-venture-partners, #bradley-twohig, #brighteye-ventures, #charles-birnbaum, #cowboy-ventures, #ec-investor-survey, #edtech, #education, #emerge-education, #ian-chiu, #jan-lynn-matern, #jomayra-herrera, #lightspeed-venture-partners, #mercedes-bent, #owl-ventures, #rebecca-kaden, #startups, #tc, #tlcom-capital, #union-square-ventures, #university-ventures, #venture-capital

African edtech startup uLesson lands a $7.5 million Series A

ULesson, an edtech startup based in Nigeria that sells digital curriculum to students through SD cards, has raised $7.5 million in Series A funding. The round is led by Owl Ventures, which closed over half a billion in new fund money just months ago. Other participants include LocalGlobe and existing investors, including TLcom Capital and Founder Collective.

The financing comes a little over a year since uLesson closed its $3.1 million seed round in November 2019. The startup’s biggest difference between now and then isn’t simply the millions it has in the bank, it’s the impact of the coronavirus pandemic on its entire value proposition.

ULesson launched into the market just weeks before the World Health Organization declared the coronavirus a pandemic. The startup, which uses SD cards as a low-bandwidth way to deliver content, saw a wave of smart devices enter homes across Africa as students adapted to remote education.

“The ground became wet in a way we didn’t see before,” founder and CEO Sim Shagaya said. “It opens up the world for us to do all kinds of really amazing things we’ve wanted to do in the world of edtech that you can’t do in a strictly offline sense,” the founder added.

Similar to many edtech startups, uLesson has benefited from the overnight adoption of remote education. Its positioning as a supplementary education tool helped it surface 70% month over month growth, said Shagaya. The founder says that the digital infrastructure gains will allow them to “go online entirely by Q2 this year.”

It costs an annual fee of $50, and the app has been downloaded more than 1 million times.

With fresh demand, Shagaya sees uLesson evolving into a live, online platform instead of an offline, asynchronous content play. The startup is already experimenting with live tutoring: it tested a feature that allowed students to ask questions while going through pre-recorded material. The startup got more than 3,000 questions each day, with demand so high they had to pause the test feature.

“We want you to be able to push a button and get immediate support from a college student sitting somewhere in the continent who is basically a master in what you’re studying,” he said. The trend of content-focused startups adding on a live tutoring layer continues when you look at Chegg, Quizlet, Brainly and others.

The broader landscape

E-learning startups have been booming in the wake of the coronavirus. It’s led to an influx of tutoring marketplaces and content that promises to serve students. One of the most valuable startups in edtech is Byju’s, which offers online learning services and prepares students for tests.

But Shagaya doesn’t think any competitors, even Byju’s, have cracked the nut on how to do so in a digital way for African markets. There are placement agencies in South Africa and Kenya and offline tutoring marketplaces that send people to student homes, but no clear leader from a digital curriculum perspective.

“Everybody sees that Africa is a big opportunity,” Shagaya said. “But everybody also sees that you need a local team to execute on this.”

Shagaya thinks the opportunity in African edtech is huge because of two reasons: a young population, and a deep penetration of private school-going students. Combined, those facts could create troves of students who have the cash and are willing to pay for supplementary education.

The biggest hurdle ahead for uLesson, and any edtech startup that benefitted from pandemic gains, is distribution and outcomes. ULesson didn’t share any data on effectiveness and outcomes, but says it’s in the process of conducting a study with the University of Georgia to track mastery.

“Content efforts and products [will] live or die at the altar of distribution,” Shagaya said. The founder noted that in India, for example, pre-recorded videos do well due to social nuances and culture. ULesson is trying to find the perfect sauce for videos in markets around Africa and embed that into the product.

#africa, #coronavirus, #covid-19, #digital-learning, #early-stage, #education, #marketplace, #owl-ventures, #recent-funding, #remote-education, #series-a, #sim-shagaya, #startups, #ulesson

Edtech investors are panning for gold

The spotlight on edtech grows brighter and harsher: On one end, remote-learning startups are attracting millions in venture capital. On the other, many educators and parents are unimpressed with the technology that enables virtual learning and gaps remain in and out of the classroom.

It’s clear that edtech’s nebulous pain points — screen time, childcare and classroom management — require innovation. But as founders flurry to a sector recently rejuvenated with capital, the influx of interest has not fostered any breakout solutions. As a result, edtech investors must hone their skills at sorting the innovators from the opportunists amid the rush.

Lucky for us, investors shared notes during TechCrunch Disrupt and offline regarding how they are separating the gold from the dust, giving us a peek into their due diligence process (and inboxes).

Putting profitability over growth

The pandemic has broadly forced founders to get more conservative and prioritize profitability over the usual “growth at all costs” startup mentality. Growth still matters, but within edtech, the boom comes with a big focus on profitability, efficacy, outcomes and societal impact.

“The goal of all of education is personalized learning, when every student receives exactly the instruction in the way that they need it at the time that they need it. And that’s really, really difficult to do if you’re trying to have one person teach 180 students,” said Mercedes Bent of Lightspeed Venture Partners. “And so I’ve been excited to see more solutions that are focused on creating smaller class sizes that are also focused on allowing students to connect with people outside of their homes as well.”

During Disrupt, Reach Capital’s Jennifer Carolan brought up a recent Netflix documentary, “The Social Dilemma,” which illustrates the impact screen time can have on society. When vetting companies, Carolan said she wanted to see founders who have considered how their products may impact young users.

#cowboy-vc, #disrupt-2020, #edtech, #education, #ian-chiu, #jennifer-carolan, #jomayra-hererra, #lightspeed-venture-partners, #mercedes-bent, #owl-ventures, #reach-capital, #startups, #tc

VCs pour funding into edtech startups as COVID-19 shakes up the market

A few weeks back, The Exchange looked into the pace of edtech exits, noting that over time, the sector has delivered rising exit volume. All startup verticals want to demonstrate a history of liquidity, so you might imagine that even before the COVID-19 pandemic, edtech fundraising was rising due to its improving exit profile.

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

And dollars invested into edtech startups did increase, with 2018 and 2019 recording historically-elevated results concerning edtech venture capital deals and venture capital dollars invested.

However, with COVID-19 pushing more students to learn from home and forcing schools to invest in new tooling and other digital capabilities that support remote-learning, a strengthening exit market and a market shift towards edtech services has led to an explosion in venture capital investment in the sector.

According to CBInsight’s data concerning the state of edtech venture capital activity, startups in the sector have already surpassed their 2019 venture capital dollar tally and are on-track to set a new record in 2020, besting even 2018’s elevated result. Whether more total edtech deals will be closed in 2020 is less clear, but if current pace holds, 2020 should come somewhat close to 2018’s edtech deal count.

What’s driving the huge boom in edtech’s venture capital results? Let’s dig into just that.

An edtech boom

The data is pretty clear, as the following chart details. 2018 and 2019 were amazing, and 2020 is looking super hot as well:

Chart via CBInsights, shared with permission. 2020 data through August 31, 2020. Global edtech funding.

Driving 2020’s huge VC totals in terms of dollars invested are a grip of mega-rounds — venture deals of $100 million or more. According to CBInsights data, 13 deals of $100 million or more have been raised by edtech startups thus far in 2020, worth billions of dollars as a group. Indeed, the huge rounds from Yuandudao and Zuoyebang were worth $1.75 billion as a pair.

The high concentration of big rounds is also part of the reason why edtech startups are prepping to set a venture capital dollar record, if not a venture capital deal volume record, in 2020.

But don’t think that it is all over for early-stage edtech rounds. Per the same dataset, a historically-normal 50% of edtech deals recorded through August of 2020 were seed or angel investments. These transactions are worth a far-smaller fraction of dollars-raised by definition, but the number of very early bets into the edtech space implies that there is still lots of room to build. We’ve covered a number of early-stage financings such as Edsight’s $1.6 million round and Learn In’s $3.5 million round. Gaps around inclusivity, efficacy, outcomes and back-end support still remain and are ripe territory for new startups to innovate within. Plus, data shows that there’s a good pipeline of future deals for the later-stage investors that have already demonstrated an interest in writing big edtech checks.

A geographic focus

The CBInsights data also shows that 8 of the 10 top-funded edtech startups are in China, and a chunk of those are focused on English-learning education. China’s edtech scene has historically been bigger than other regions because of a high population, consumer spending patterns and a cultural focus on education. It was growing much before the pandemic; when venture investing dropped in China Q1 2019, edtech grew year over year and brought in $1.86 billion.

In the past couple of months, edtech startups have closed strategic capital to expand into the gold mine that is China. Labster, for example, recently brought on $9 million in capital and GGV’s Jenny Lee, who is based in Shanghai, to break into China. Duolingo similarly took a $10 million check to welcome on an investor with knowledge of Asian markets, General Atlantic.

Byju’s, coming out of India, is one of the other top-funded edtech startups. The personalized learning startup, already the most valued edtech startup in the world, got a $500 million check from Silver Lake earlier this week. It has doubled its revenue during the pandemic as it added more than 20 million new students to its platform. The company also acquired 18-month old White Hat Jr for $300 million. And the venture capital firm that invested in both Byju’s and White Hat Jr? Owl Ventures, which has raised a $565 million pair of funds to invest in edtech. 

The unicorn’s growth during the pandemic is hard to get your head around (although we tried to) but sums up how boggling growth can be.

That growth is part of why edtech’s venture capital results are as strong as they are. Now the challenge for the sector will be keeping its growth alive in 2021, showing investors that their 2020 bets were not merely wagers made during a single, overheated year, but bets placed in a startup niche that will keep getting hotter for years to come.

#edsights, #edtech, #education, #fundings-exits, #jenny-lee, #labster, #owl-ventures, #startups, #the-exchange, #zuoyebang

Now providing healthcare access to nearly 1.5 million kids, Hazel Health raises $33.5 million

Hazel Health was founded five years ago to provide telemedicine services to children in public schools. Launched by a former Apple software engineer and serial entrepreneur, Nick Woods, and named after one of Woods’ children, Hazel Health has grown to work with school districts responsible for 1.5 million children, and has raised $33.5 million to expand its footprint even further across the United States.

The company’s services are even more sorely needed as children are forced into distance learning classrooms by the global COVID-19 pandemic.

Denied the network of services that in-person schooling provides for basic healthcare and nutrition, remote services like Hazel Health become, in some cases the only window into children’s health that some communities have.

When the first lockdown orders came through, the company began working with school districts to develop remote telemedicine services distributed via applications to continue serving the children it provided basic telemedicine services for.

So far, ninety percent of eligible families have enrolled in the company’s telemedicine program and 70 percent have engaged with the company’s services. These numbers are even more significant when viewed through the lens of the nearly forty percent of the company’s users who indicate they don’t have a primary care physician.

“We built this incredibly powerful model that partnered with schools and brought access to healthcare to families,” said Hazel chief executive, Josh Golomb. “At the schools we had an iPad on a stand. You hit a button and in a few minutes you would be talking to a doctor.”

Hazel Health executive team, from left: Dr. Rob Darzynkiewicz (Chief Medical Officer), Nick Woods (Chief Tech Officer, cofounder), Raquel Antunez (VP Education Markets, cofounder), and Josh Golomb (CEO). Image Credit: Hazel Health

After the onset of the COVID-19 epidemic in the U.S., the company’s Hazel at Home service continues to provide care to kids.

“As soon as covid happened there was a lot of recognition by districts that we have to have a solution around student health and wellness,” said Golomb. “Pre-COVID we went from 300,000 in our network of districts to now, when we just passed 1.5 million. [The] rate of engagement went down but our overall expansion has increased dramatically.”

With those kinds of numbers it was no wonder that Owl Ventures and Bain Capital Ventures came in to back the company. Additional financing came from Uprising, the UCSF Foundation Investment Company and Centene Corp.

And the demand just keeps increasing, according to Golomb.

“Our pipeline has exploded,” he said. “A lot of the states have made expansion for telehealth and increasing access a priority. We were going to have eight or nine states that we were going to prioritize.. That’s priority number one… another big chunk is really making sure that we can invest in expanding the product to support that volume of states and finding ways to support our families and district partners.”

#articles, #bain-capital-ventures, #ceo, #covid, #distance-learning, #executive, #healthcare, #ipad, #owl-ventures, #tc, #technology, #telehealth, #telemedicine, #united-states

Owl Ventures’ new pair of funds gives edtech a $585 million boost

Edtech just keeps on booming.

Today, Owl Ventures, a San Francisco-based education technology fund whose portfolio includes Byju’s, Labster, Masterclass and Quizlet, announced that it has closed a pair of investment vehicles totaling $585 million.

Owl Ventures IV is a $415 million investment vehicle which will be used to invest in edtech startups Series A and beyond. The firm also formed its first ever opportunity fund at $170 million to work as a growth-stage bank for existing portfolio companies.

The new funds allow Owl Ventures to cut larger checks. Traditionally, the firm cut checks that were between $5 million to $35 million. Now, it can write investments up to $50 million in companies. The opportunity fund will exist to back existing investments throughout their lifetime.

“Edtech as a sector is really exploding and emerging,” said Ian Chiu, the managing partner at Owl Ventures. “It’s not that COVID is the reason for that. It’s more that COVID has accelerated that.”

Acceleration in mind, Owl Ventures has benefitted from focusing on edtech since 2014. This year, it saw exponential growth in a number of its portfolio companies. One of its investments, Byju’s, became the most valuable edtech startup in the world. Another one of Owl’s investments, White Hat Jr., got acquired by Byju’s about 18 months after launching. The intra-portfolio activity shows growth, and opportunity for exits.

Owl Ventures will continue to make international investments in education technology businesses across a number of categories, from recruiting to re-skilling.

Chiu also showed interest in the emerging cohort of startups that focus on education as a direct-to-consumer play.


As the pace of innovation within edtech speeds up to an unimaginable clip, I asked Chiu if certain sub-sectors within edtech are no longer in need of new entrants. For example, are Q&A services off limits?

“There are many things to be solved still,” he said. “Whether or not it takes the form of something that feels ‘futuristic or advanced’ like a Labster versus something that is maybe a little more nuts and bolts in the background on the administration side, I think there are still so many things available in market.”

But on the other side of grassroots efforts comes long-awaited exits. Chiu is optimistic about the exit environment over the next five years.

“As these companies start to eclipse or get over $100 million in terms of revenue, many of them are going to be in prime position to go public,” he said. “There’s a handful of companies in our portfolio who fall into that bucket.”

In addition to the new funds, Owl announced that it has hired a number of new team members from all around the world: former Sequoia India investor Kriti Bansal, former TCV analyst John Azubuike, and former investor at George Soros’ Family Office Jenny Wang. The firm’s summer intern, Emily Bennettt, will join the team once she graduates from Harvard Business School.

The company declined to disclose the diversity metrics of its portfolio companies to date, saying that it will release the numbers in the fall.

Now with over $1.2 billion in assets under management, Owl Ventures says that it is the largest venture capital fund in the world focused solely on edtech.

#byjus, #coronavirus, #covid-19, #edtech, #ian-chiu, #masterclass, #owl-ventures, #startups, #tc

Can learning pods scale, or are they widening edtech’s digital divide?

Lucia, a six-year old, hides from Zoom calls and has rejected every edtech tool from Seesaw to Khan Academy. She will spend all of first grade in quarantine.

Her mother, Claire Díaz-Ortiz, says her daughter fits squarely into the “distance learning death zone.” The idea is that younger children are too young to do distance learning solo, even with tools meant to make it easier. Here’s one kindergartner’s remote fall class schedule:

“And unfortunately for my daughter, I’m a VC, not a Zoom mom,” Díaz-Ortiz said.

The impact of the distance learning death zone, as Díaz-Ortiz calls it, is one of the reasons why many wealthy families with young children are considering a new solution: learning pods.

Learning pods are small clusters of children within the same age range who are paired with a private instructor. Depending on a parent’s preferences, learning pods could be an in-home or virtual experience and be either a full-time school replacement or supplemental learning.

In recent weeks, the concept has taken off all across the country, from suburbs to cities. There’s a Facebook group for Boulder, Colorado school districts; organizers launched Pandemic Pod San Diego to “connect families looking for in-home, teacher-led learning groups.” Some households are offering teachers a retainer. Among working mom groupchats, pods are taking off as a sanity lifesaver, especially as childcare responsibilities fall disproportionately on women.

Startups are pivoting to keep up with the demand for private teachers. But because of high costs, only affluent families are able to form or join learning pods, which may limit the model’s ability to reach scale while extending the existing digital divide.

#coronavirus, #covid-19, #cowboy-vc, #edtech, #education, #extra-crunch, #jomayra-herrera, #market-analysis, #owl-ventures, #prisma, #startups, #tc, #venture-capital, #zoom

‘Edtech is no longer optional’: Investors deep dive into the future of the market

One reason some venture capitalists and founders don’t enter edtech is because the space has a sluggish stereotype, thanks to red tape, slow sales cycles, and, in America, a fragmented customer base.

But data suggests that edtech’s reputation is not entirely earned. Byju’s is India’s second-most-valuable company. Since 2013, there have been 300 acquisitions in the space. And if you only understand success in terms of unicorns, two edtech businesses, Quizlet and ApplyBoard, were recently added to the $1 billion valuation club.

The tension between edtech’s stereotype and its potential for return, plus the surge in remote learning due to coronavirus-related shutdowns, poses an interesting challenge for the market.

In the beginning of the pandemic, TechCrunch talked to a group of edtech investors to get their knee-jerk reaction to the remote learning boom. Unsurprisingly, many commented that the heat-up of the sector will materially impact K-12 and higher education and unlock new opportunities. Others warned early-stage edtech startups about how newfound competition could hurt content, quality and effectiveness of their end product. Overall, the general message was that the boom is here, everyone is excited and waiting to see what happens next.

Fast forward a few months, mistakes and extended school closures later, edtech now has a better inkling on what the next billion-dollar business needs to get right. Today, we talked to a number of top venture capitalists to get an eagle-eye view of what rapid change, adaptation, and for lack of better phrasing, popularity does for the market.

Today you’ll hear from the following investors:

#byju, #coronavirus, #covid-19, #cowboy-vc, #david-eichler, #edtech, #education, #emerge-education, #extracrunch, #ian-chiu, #jan-lynn-matern, #jennifer-carolan, #owl-ventures, #quizlet, #reach-capital, #shauntel-garvey, #startups, #tc, #tcv

Degreed lands new cash for upskilling in a down market

While the pace of layoffs might be slowing down, an extended recession is forcing companies to get smarter about the way they grow. One way to stay lean and stealthy? Have a team that is constantly learning and equally flexible.

Degreed helps employers do exactly that by connecting employees to learning resources to master new skills. The edtech startup today announced it has raised $32 million in venture capital in a round led by Owl Ventures, bringing its total known raised to $182 million. The company was founded in 2012.

At its core, Degreed is an upskilling platform that trains existing employees to enhance their current skill set. It does so by matching employees to lessons around different topics, like remote work or coronavirus. Degreed makes money through a monthly fee for clients and is free for employees.

“It keeps people skilled and employable; nobody should become irrelevant in the future because they lack the right skills,” said CEO Chris McCarthy.

Following its buy of Adepto, Degreed is also building out a career mobility product. Users can look at work opportunities based on current skills and see what they need to work on to get a new role. The skill profile will also let individuals see relevant work and learning opportunities such as jobs, one-off projects or tasks.

Today’s financing is specifically earmarked for the company’s career mobility product, part of the reason it is a smaller sum than previous rounds, says McCarthy.

Like many edtech companies, Degreed said the past six months have included unprecedented engagement from customers; nearly one in seven Degreed accounts have been activated between April and May of this year alone.

The uptick might be a mix of more people looking to become invaluable and more people having fundamentally more time on their hands to work on habits. The high engagement also could be because of uncertainty, according to co-founder David Blake .

“People face uncertainty in their work, but if organizations invest in having better skill insights then they can upskill, reskill and redeploy their people,” he said. The goal is that people can keep their jobs and “futureproof themselves against whatever’s on the horizon.”

Certain skills have been more in demand than others. According to Degreed, communication has seen a 15.5% increase and design thinking has increased 12.8%. Other topics that have seen spikes in engagement include crisis management, resilience, mental health and change management. The bottom line here is that people are interested in working on flexible, human-first skills.

It brings up an interesting question: Can edtech teach non-quantifiable skills like vulnerability? CEO McCarthy says that soft and flexible skills will be “essential” in the future. Like any edtech company, Degreed needs to prove efficacy before it touts success.

Anti-harassment tech Ethena faces a similar hurdle. It is hard to prove whether software makes a difference when it comes to harassment, because so much happens behind the scenes or goes unreported.

Ethena is working on a study right now to see if their software leads to higher retention and less attrition. Another company, MasterClass, is just betting that it can prove value by getting exclusive content for its site from A-list celebrities.

Degreed is going the route of many course providers: certification.

Users can go through a process, called Degreed Skill Certification, where work is vetted, verified and analyzed by data scientists, a panel of experts and machine learning to provide a “ranking.” Users also have to provide references of two people who have first-hand knowledge of the skill and can vouch for accuracy, per the company.

To date, Degreed has connected more than 4 million people at over 250 organizations like NASA and Cisco.

#david-blake, #degreed, #education, #owl-ventures, #recent-funding, #startups, #tc

MasterClass just raised $100 million for celebrity-fueled content

MasterClass, a startup that sells celebrity-taught classes to people, has raised $100 million in a Series E round. The round was led by Fidelity Management & Research Company with participation from new investors including Owl Ventures, 01 Advisors and existing investors NEA, IVP, Atomico and NextEquity Partners.

The new financing brings MasterClass’ valuation to $800 million, according to Bloomberg, which broke the news of the edtech company’s then-impending funding round earlier this month. MasterClass declined to disclose its new valuation.

MasterClass charges a $180 annual subscription fee for users to access its library of content. The subscription model is responsible for 80 percent of the company’s revenue.

MasterClass views itself as neatly on the intersection of entertainment and education. The startup has produced 85 classes taught by celebrities, or “masters,” on their specialities. The platform has garnered blockbuster names like Anna Wintour to talk about how to grow a business, Gordon Ramsey on how to cook, and David Sedaris on how to be funny. The previews of classes are called “trailers.”

It also touches on the public’s innate curiosity about how famous people think and work. MasterClass tugs on that idea a bit by also offering classes that fundamentally do not make sense to be “digitized.” Think high-contact sports, like a tennis lesson from Serena Williams or a basketball lesson from Steph Curry. Or just general pontifications from RuPaul on self expression and Neil deGrasse Tyson on scientific thinking and communication.

Despite its flashy line up of stars, MasterClass doesn’t sell access but instead sells a window into someone’s work diary. Celebrities are not interacting with students on a day-to-day basis, and sometimes, not at all.

It is relatively a light lift for celebrities once they get their content on the platform, which of course only happens if they are personally invited to from the company. Any MasterClass on the site includes a number of lessons, broken down in separate videos that range from 20 to 30 minutes, and a downloadable workbook. Students for each class can flock to community hubs to chat with their fellow virtual classmates. There are opportunities for celebrities to interact with students, but nothing is put in the contract to make the instructors give back.

MasterClass proudly touts the few exceptions where celebrities have chosen favorites in class: Electronic music producer DeadMau5 reportedly invited one of their MasterClass students to record a track alongside him. Serena W