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The EdTech Episode #2

At the inaugural Learnit conference in London earlier this year our panel was given a series of questions to prepare. One proved harder to answer than the others - Where is the education sector leading the world in technological innovation?

We all recognise that the sector is changing at a rapid pace and that “Gutenberg Moments” like Automation and the Internet of Things are changing the way that we learn, teach and operate our institutions. But are these educational applications more innovative than comparable applications in other sectors?
There is no right answer to this question, but upon reflection I believe that there are currently two technologies where EdTech is leading the world. The first is the application of language learning methodologies to Natural Language Processing (the interface between humans and machines). The second is the deployment of artificial intelligence in personalised learning, as the drivers of educational outcomes are uniquely complex. I am also passionate about the potential for education to lead in a third technology class – AR / VR – and although education currently lags gaming, we are starting to see some great companies emerge that could push this technology to new heights.
With other technologies I expect education to continue to be a fast follower, and business model innovation to continue to drive sector transformation. We need more companies like Lambda School, Ecole 42 and Guild Education that deploy learner-focused business models to meet a real need, or businesses such as VIPKid that can scale personalised learning on relatively mature technology platforms. 
If you are aware of early stage EdTech businesses that are deploying innovative business models then please reach out, we would love to speak to them.

Tim Praill
Head of Navitas Ventures
Market News
RTI has released a report on the coding bootcamp market - a useful summary is provided by EdSurge here. Based on 2017 data, the report identified a highly fragmented sector dominated by face-to-face programs, with the largest provider General Assembly representing 11% of all programs offered in the US, Canada, or online.

Coursera has launched its Global Skills Index, analysing business, technology, and data science skills across 60 countries and 10 industries. Developed countries generally performed better than developing countries, while Coursera enrolments indicated that demand for technology and data science skills is growing while demand for business skills is falling.

Google launched Grow with Google, an online learning hub that provides access to free digital skills training, in Australia.
Investor/Accelerator News
Y Combinator, one of the world’s leading accelerator programs, has the demo day for their latest cohort this week. The EdTech companies InsideSherpa (a Navitas Ventures portfolio company), Skill-LyncLumos, and AccioJob have announced that they will be participating.
Company/Institution News
Deakin University has launched (paywall) an online graduate certificate in hospital administration aimed at the Indian market. The course also represents an entry pathway to an MBA in healthcare management. 

Southern Vermont College, a small New England institution, has announced its impending closure.
Newsela, a content platform that provides literacy material for K-12, has raised a US$50M Series C round from TCV, a growth equity firm.

GO1, a corporate learning marketplace, has raised A$30M (approx. US$21M) in a Series B round. M12 Ventures (an arm of Microsoft), SEEK, and Y Combinator led.

FutureFuel, which provides a solution for employers to make student debt repayments as an employee benefit, has raised a US$11.2M Series A round. Rethink Impact led.

Advance Publications, a privately held investment group, has acquired Turnitin for a reported sum of nearly US$1.75B.

Bridgepoint Education has acquired Fullstack Academy, a coding bootcamp provider, for approximately US$35M in cash and shares, plus additional shares contingent upon meeting performance milestones. 

Weld North, a private equity-backed EdTech company, has acquired Assessment Technology Inc on undisclosed terms.

Blackboard has agreed to sell Blackboard Transact, a campus engagement and payment solutions provider, to Reverence Capital Partners.

Global Payments has acquired Sentral Education, an Australian provider of school management software.

ExamSoft, a testing and assessment company, has acquired LiftUpp, a provider of clinical assessment software.

Emmersion Learning, a language learning company, has acquired Perpetual Technology Group, the administrator of the WebCAPE language placement test.

Interactivation, a privately held investment group, has acquired Med School Tutors.

Emerald Group has acquired MindTools, a provider of management and business skills resources.

Prometric, which operates an international network of test centres, has acquired Schroeder Measurement Technologies and DL Roope Administrations.

Allovue has acquired Equiday. Both companies provide software for the K-12 school budgeting process.
New Funds

Although not an EdTech fund in the traditional sense, Osage University Partners has closed its third fund at US$273M focused on investing in university spinouts.
Final Thoughts

It is now 12 years since the start of the global financial crisis, and major indexes like the S&P 500 have more than quadrupled since their lows in 2009. The 22nd of August 2018 marked the longest US bull market in history, but what goes up must come down, and the question circling the financial markets is how long can the good times last?

While most economists expect global growth to continue for the next 12 months, the chances of a recession are increasing. More than three-quarters of CFOs expect one by the end of 2020, while 89% of Private Equity Fund Managers expect the start of a prolonged downturn over the same period. Over the next 12 months, 22% anticipate a market correction, which closely matches the New York Fed forecasts that estimate the chance of a recession at 24% for the 12 months to January 2020.
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