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The EdTech Episode #17


Dear readers,

The post-coronavirus slowdown in EdTech investment appears to have arrived. While EdTech investments averaged roughly US$400M per month in 2019, we estimate April's investment was ~60% below that average. May is also likely to decline from last year.


That said, we did see notable transactions in Canada (ApplyBoard) and Australia (GO1); while Owl Ventures, a specialist US EdTech investor, is raising its fourth, US$350M fund.

And while funding may be slowing down, we continue to see signs of strong, broad interest in EdTech products. ClassCentral has highlighted the continuing popularity of MOOCs, while a survey from BrightEye Ventures suggests that interest spans both consumer- and institutional-facing products.


-- Peter Sahui

Market News

In April, Brighteye Ventures, a Europe-based EdTech investor, released the results of a survey investigating the effect of the current situation on (predominantly early-stage) EdTech companies. Survey respondents reported a significant increase in users, with the biggest increase appearing to come from K-12 and B2C companies.

Chinese EdTech companies raised 10.5 billion RMB (approx US$1.5B) during 1Q20, according to EDU INSIGHT data cited by JMDedu. While this only represents a 16% decline on the amount raised in 1Q19, this was mostly driven by a single US$1B round raised by Yuanfudao this year. The decline in the number of deals was much more severe, down 57%.

Class Central has presented its latest update on the MOOC sector, which estimates that major providers such as Coursera, edX, and FutureLearn have received a sizeable uptick in interest since March.
Company / Institution News

Udemy has reported a significant increase in use of its platform - course enrollment, course creation, and enterprise use are all up (press release here, full report here).
Fundraising

2U has issued US$380M worth of convertible notes due 2025 at a coupon of 2.25%.

ApplyBoard, the Canadian operator of a platform for international students to apply to universities, has raised a C$100M Series C round. Drive Capital led.

GO1, the Australian provider of a corporate training marketplace,
has raised a US$40M Series C round. Madrona Venture Group and SEEK led.

Codemao, a Chinese K-12 online programming education company, has
raised a 250 million RMB (about US$35M) Series C+ round. CMB International Capital led.

Niche, a US discovery portal for schools and HEIs, announced that it
raised a US$35M Series C round. Radian Ventures led.

Quizlet, the US provider of a flash cards platform, has
raised a US$30M Series C round. General Atlantic led.

Huohua Siwei, a Chinese K-12 online maths and science education company, has
raised US$30M from Beijing Kuaishou Technology. This is part of a broader round that aims to raise US$100M-US$150M.

Duolingo, the US-based language learning app developer, has
raised US$10M from General Atlantic.

BibliU, a UK-based digital textbooks platform for HE, has
raised a US$10M Series A round. Nesta Impact Investments led.

ClassPlus, the Indian developer of software for tutoring centres, has raised a US$9M Series A round. RTP Global led.

Enuma, the US-headquartered developer of several K-12 EdTech apps targeting the Korean market, has raised a US$9M Series B round. YellowDog led.


Vedantu, an Indian online tutoring company, has raised a new, US$7M tranche in its ongoing Series C round from KB Global.

Soapbox Labs, the Ireland-based developer of speech recognition technology for children, has
raised a US$6.5M Series A round. Elkstone Capital, Astia, and private investors took part.

Chance, a French career re-training & coaching company, has
raised 5.6M euros (approx US$6M). Zulu Group led.
M&A

Guild Education has acquired the operating and consulting business of Entangled Group, an EdTech "venture studio". Entangled's investments in other companies were not included in the deal.

Harris has acquired eDoctrina, a provider of software for K-12, from Frontline Education.

eLearning Brothers has acquired Triventis, the developer of an authoring tool, and Edulence, the developer of the KnowledgeLink corporate LMS.

UWorld has
acquired RxPrep, a developer of test prep solutions.

Thinkster Math has
acquired SelectQ, a provider of personalised test prep content.

ACT has
acquired Scootpad, the provider of K-12 adaptive learning products.
New Funds

According to SEC filings, Owl Ventures, a EdTech-focused VC based in the US, is raising two new funds - the US$350M Owl Ventures IV, and the US$75M Owl Ventures Opportunity Fund I.
Find Navitas Ventures online at navitasventures.com.
Copyright © 2020 Navitas, All rights reserved.


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