Edtech Insiders
Edtech Insiders
This Week in Edtech with Ben Kornell, 8/12/22
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Topics This Week:
- Fall Election Cycle
- 2022 CHLOE 7 Report
- Big Tech vs. Udemy
- Metaverse
- Funding + M&A
Alexander Sarlin 0:04
Welcome to Edtech Insiders. In this podcast, we talk to educators and educational technology investors, thought leaders, founders and operators about the most interesting and exciting trends in the field. I'm your host, Alex Sarlin, an educational technology veteran with over a decade of work and leading edtech companies.
Ben Kornell 0:27
Hello everyone. Welcome back. It's the fall. It's our second episode of season two of the week in edtech. We've got a lot to get you caught up on. Alex, great to have you here. I'm in New York, where are you dialing in from?
Alexander Sarlin 0:44
I am calling in from my home in Greenville, South Carolina, you may hear a little bit of background noise because we have a My in law taking care of the baby right now. But I'm having a good week so far and very excited to get into all of the stuff happening in the education world this week. It's steamy
Ben Kornell 1:02
up here in New York. So we're getting a little South Carolina, whether it's 95 and burning in the city. But we're going to jump in with another area that's burning, politics.
Education edtech and politics, inseparable. And we've begun the fall election cycle. Candidates across the country are running on education platforms, in ways like we've never seen, at least in our lifetimes. One highlight in the news was Virginia, Governor Younkin, who has been a huge challenger of readings that incorporate diverse voices, created a tip line where teachers can send in tips around curriculum that may or may not be appropriate. And this kind of comes together with the backlash around CRT. That's critical race theory. But the tip line is being used for all sorts of things. And now the Democrats are subpoenaing gov Younkin to get the complaints. And so what we're seeing, you know, as we step back from this isolated incident, some of the strategies that the Republicans have used to kind of create vigilante enforcement of policies and practices are now happening in education. And second, we had an article about the Democrats ceding the party of education label to the GOP. So in US News and World Report's there was actually a important article where it talks about battleground congressional battleground districts, voters no longer trust Democrats over Republicans on issues related to education. So we're seeing more and more. And then third, I have a personal interest, I'm running for reelection, I just pulled my papers from my local school board. And even at the local level, it's amazing to see how these national narratives are hitting home, in, you know, my small district of 4000 students. So we've kind of gone from a world where education was the one thing that Democrats and Republicans could agree on and work together and kind of the Bush era to now this is the wedge issue, coming up on a hotly contested fall cycle. As you're watching all of this play out, and especially as you watch from the vantage point of living in South Carolina, Alex, where do you think this is? Where are we but also, where do you think this is headed?
Alexander Sarlin 3:43
It is such an interesting moment. You know, I think that the pandemic really opened this door in a lot of ways because the combination of the pandemic and the George Floyd, murder and and all the protests happening at the same time, as well as some things happening in higher ed that had been years in the making, but I think we're at a point right now, where there is so much backlash to some of the policies that have happened in schools, including mask mandates, including, you know, diversity initiatives and inclusion of things like the 1619 project, or, or, you know, quote unquote, critical race theory that the Republican Party has seen parents get really fed up and confused and angry about some of the school policies and of course, we should mention remote learning. People school staying closed and and students being in remote learning for longer times than then many parents thought was reasonable. It's really actually made education into a an issue that Republicans want to talk about, and it's one of the main issues they are and will continue to talk about going into the midterm elections in the US. You know, this is not a pure politics podcast. So we probably don't have to go into the D details of this. But one thing that I see from my vantage point in South Carolina is you know, people use the word indoctrination pretty openly here as a way to describe what's happening in schools. I was in a bookstore the other day and, and the the proprietor of the bookstore just just apropos of nothing, because I was buying children's books said, you know, hey, I'm selling more and more things to homeschoolers. There's this huge wave of homeschoolers coming in, because, hey, schools are just trying to indoctrinate students. So people are going to keep their kids out of schools, and we're seeing the numbers, you know, three, almost 3% Decrease in school growing population for the last year. And then the same thing is happening in higher ed, you're seeing a incredible backlash. So education is I think, officially not only a polarizing issue, I think it's one of the polarizing issues. It's a place where it's become the frontlines of the culture wars in a way that I don't know if we've, we've seen in our lifetime, maybe that sense can state.
Ben Kornell 6:00
Yeah, and the Forbes article that you're referring to show that 1.3 million student decline in enrollment was largely due to COVID culture and COVID practices. So in the red states, the, the enrollment largely stayed the same or even grew. And then blue states, there was a mass exodus. So it is really interesting to see how some of these policy implications are playing through. Now on the EdTech angle. I've heard from several friends that textbook adoptions and curricular adoptions that were no brainers in years past, are getting pulled from the consent agenda for the state board or the local board or whatever. And people, you know, the politicians who are elected onto these boards want to get into and get under the hood in terms of what the curriculum is. And while that might sound all fine and dandy, like transparency is a good thing in education. What it ends up creating is a paralysis for the educators. What can I teach? What should I teach? Am I going to get in trouble? Am I not? And for edtech providers, it creates some paralysis. Like if I have this particular unit or this particular voice or perspective, will it mean that I'm not no longer implemented in schools. And so Florida is probably the headline state where curricular adoptions have become a very, very controversial item. But I think we're going to see much, much more of it as we head towards November.
Alexander Sarlin 7:37
Especially because the political profile of Florida Governor Ron DeSantis, relies in many ways on this sort of super contrarian, aggressive stance around education. And some of his national profile came specifically because he forcefully closed down COVID culture in schools, open schools much sooner than many other states. And I think that's going to be a big part of his story. And I think he's going to be a big part of the next couple of years of, of politics. So we're gonna hear a lot about Florida and about curriculum and about banned books like Toni Morrison, and about people, you know, as you say, been diving into the details of what's being taught in schools, and starting to look at it through these really different cultural lenses than we've seen in the past. It's going to be wild, I don't think it's particularly good for education, for all the reasons you're saying. And it makes it very hard for teachers to prepare, it makes it very hard for curriculum to be adopted. And it just makes every moment in the classroom, you know, charged and loaded. Well, and
Ben Kornell 8:41
by the way, it also makes homeschooling really hard to execute. Well, I mean, there, the contrarian view would be like, what an opportunity for homeschooling. But if you have people who are opting out of public education, for political reasons, rather than curricular or learning aspects, then we may see the politicization of the homeschool space. You know, that's an art it started as kind of a religious, you know, homeschool. For the longest time it's been associated with religious education. Now, might it be associated with strong conservative ideology as part of its curriculum that can really change the homeschool landscape as well? So Alex, we talked about all of these political winds almost as a function of virtual learning and the COVID crisis. We have a new report from Chloe, that's really diving into the future of online learning. Tell us more. Yeah. So
Alexander Sarlin 9:39
this is a really interesting report. It's being covered in Inside Higher Ed, among other venues, outlets this week, about basically a survey of online learning leaders, specifically chief online officers at universities now. It should be said that Chief online officers at universities sort of by definition are you know, pro online, they're bullish on on Mind. But that said, the numbers coming out of this survey actually are really are pretty eye opening and pretty, pretty interesting. So you're seeing that, you know, there are a lot of different surveys and a lot of different ways that people ask what the future of higher ed will look like when it comes to online versus hybrid versus on campus. But as recently, as you know, a year or two ago, the consensus was still that most undergraduates, most graduate students would be campus only. And that even hybrid learning was going to be a, you know, a minority of students. This survey of Chief online officers goes the other way, in a very big way. Among chief online officers, they believe that only 4% of undergraduates will be campus only and have no online, no online component. By 2025. They think 1% of graduate students will be campus only, you know, you're seeing that the view that 10 to 20% would have been hybrid a couple of years ago, the consensus among many different executives at colleges was that about 10 to 20% of students would be sort of hybrid students, they'd be blending on campus and virtual experiences. But this new report says, Hey, CEOs, chief online officers think it's going to be 80 to 90%, the vast majority, so you're seeing these inverted numbers. And you know, I think this is really interesting for Ed Tech, obviously, there's probably some built in bias here you are talking to, you know, people who are tech focus and sort of their jobs and their careers rely on the growth of online learning. But I'm also think that this is really interesting coming out of the COVID era. And and just this idea that not only is online and hybrid learning sort of here to stay, quote, unquote, but there's a belief that it's going to become absolutely de rigueur, it's going to be everywhere. And the number of students who will be on campus only with no online component will be in, you know, a tiny minority 4% 1%. It's a really interesting take. So that really caught my eye. I'm curious, if you think this is just, you know, internal bias. But is this just what online officers like to think? Or is this actually a reasonable prediction for the future of where higher ed is going? Well,
Ben Kornell 12:17
I think this is an important survey, mainly because it's university leaders themselves, saying it and essentially planning for it. You know, if you had talked to this same exact person, two years ago, they'd say, Woe is me, my university is not evolving fast enough to support hybrid and online learning. And now there's a sense of, it's kind of overtaken the person part. From a theme standpoint, we've talked often about, you know, the cost, and the ultimate value of education. And one way to bring down the cost and hold values stable, or even increase the value is to put things online. So I think there's no turning back. Now, one thing I wonder about is that 4%, that is pure in person, do we imagine that there's a world where elite colleges and universities, you know, let's say, the top 100 schools, and the privileged students that get to attend those universities, get a predominantly in person on campus experience, and then the vast majority of others or the 96% actually have to have majority hybrid? That's the kind of That's the million dollar question right now. Yeah. And, and I think it also, you know, we just talked mainly about K 12. And the politics of hybrid, I think there's going to be a generation of learners who are used to that type of learning. But the studies have shown that it's not necessarily the most successful learning modality for all kids. So I do think that we're in this period of flux. But if you're betting on what's going to change the game in the higher education space, I think it's a really safe bet that it's going to be online learning.
Alexander Sarlin 14:05
Yeah, I mean, comparing these pre pandemic, predictions to the post pandemic predictions, is really eye opening. And I think the split between elite universities and non elite universities is very much a possibility. And I think, frankly, it's a slightly dystopian version of the future of hybrid. It mirrors what you see with computers with school computers. So you know, we talk on this on the show a lot about how we all envision that, you know, the average college student is 18 to 22 years old and lives on a campus and goes to the quad and drinks at the coffee shop, but that's actually a real small minority of the college students who tend to be older, many of them live at home, many of them commute, many of them don't live on campus or attend part time. And I think, you know, potentially, this would be an extension of that logic that you know, the few people who have the privilege to go to Yale and live on campus in the beautiful eye Have you buildings, that's the 1%. That's the 4%, they get to actually have classes in person, they get to actually have cafeterias and sports teams, and all of that, and everyone else is sort of, in and out that it is possible. But it's kind of a dismal future. I'd like to think that a better outcome that comes out of this movement is one in which people really deeply think about what the purpose of a campus actually is. So if you have, you know, Eastern Illinois University, which right now, maybe the only, you know, the majority of students are there on campus in person, and they may be overpaying for that experience. What can you do on the campus of Eastern Illinois University that really adds value to the student experience? Is it lab work? Is it sports, is it social activities, is it, you know, book clubs and readings is he you know, in a world where hybrid becomes the norm, I think, ideally, it allows everybody to think about what works better in person and what works better online and to optimize those separately, rather than smashing them all together, and then charging an arm and a leg for it, which is where we've sort of gone with our higher ed system up till now. Well, so
Ben Kornell 16:12
in that regard to maybe corporate is going to be our leader here, because corporate has embraced online learning faster than schools had. And they've also thought a lot about how to use physical plant and when to bring employees together for learning and professional development, and so on. So actually think, you know, COVID, has changed many things, but one dynamic that is fundamentally changed is the use of physical space. And, you know, during that time period of COVID, we had the most available meeting space, in the history of the world, probably combined, in the history of the world, in human history. In like the, you know, gear where everything was shut down, we had the same amount of vacant space. So a lot of people have been, at the micro level rethinking the use of space, and why should it be different for universities, you know, the only people who are thinking exactly the same about how to use the physical space, unfortunately, as K 12. And I'd love to see them also reimagine accessibility as second. So attend what you said, this is a very America centric kind of conversation and study. But when you look abroad, where There literally is not enough physical space to meet the demand, there's not enough chairs in the schools to meet everyone. This is a no brainer, like this is where things have to go. And so it does make me wonder, as you start breaking down those barriers, physical campus as a limitation, on who can be your student kind of goes away. And you could actually have people flying in flying out and leveraging the physical campus in really strategic ways as a platform for social interaction, that then is buoyed by the continuous online learning.
Alexander Sarlin 18:04
I love that point. Let me just throw one more sentence in and I think this would be a great segue to our next topic. The corporate learning example you're mentioning is so interesting. And I think, you know, if I were the Chancellor of an American university right now, I think I'd think exactly along the lines you're saying, which is, how do I use my space in a way that is most attractive and interesting to students? How do I attract international students? In countries where there they don't have any space? They don't have any quads? They don't have any, any lovely buildings? How can I use off the shelf learning from corporations from anywhere? You know, how do I put together a combination offering where people come in person to do incredibly cool things in person, maybe they're going to college football and basketball games, you know, every week, but then the learning can be done anywhere, it's some of the learning at least, can be done anywhere using a wide variety of different materials. And the facilitators on campus don't necessarily even have to be professors. They can be people, that could be the equivalent of almost camp counselors, people there to get the social world happening to get students to really love their experience, but they're not even there. They don't even necessarily have to be teachers. That would be a very disruptive and potentially a pretty interesting way to see, to see that college of the future.
Ben Kornell 19:26
Yeah, it's fascinating. This is why we love this stuff. I hope our listeners are like as excited as we are. And also, this is where it's going to take some risk takers to really push the envelope. And we know in higher ed, there's a few kind of winner take all opportunities and you see a couple schools that are out front, and they're doing tremendously well. Speaking of out front, we often talk about the role of big tech in education almost like the tail wagging the dog a little bit, but we're seeing In a shift where big tech is prioritizing, education, learning and upskilling, and we've got a new entrant, Amazon has just announced that it's launching a Udemy competitor. Now imagine you're scrolling through your Amazon list with your stars. And here's the product you're going to buy. And now you can click on, oh, I want to take a computer programming course. It's incredible how the look and feel is very similar to the Amazon look and feel. But then when you get in there, it looks like most online courses where you have your syllabus, and you have your activities, and so on. And in similar to Udemy, there's blended learning components where you're able to have some live and some asynchronous. This is following Facebook's experimentation with a course portal. And of course, Google's major moves into training and upskilling. It feels like big tech is laying claim. I am particularly interested in Amazon, partly because Amazon has actually been one of the big tech companies that's been in edtech. For the longest time, they owned 10 marks, which was one of the most successful math apps. And Amazon's Headstart program, which is their cloud computing program for startups has long been the go to for both small startups as well as large education companies. I was talking to somebody the other day, and they said, Ed Tech is actually the second biggest sector for Amazon's cloud business, which is eye opening. So Amazon kind of coming in, and really asserting their kind of marketplace dominance. You know, I have two questions for you, Alex. One, when are you putting your course up on Amazon? And then to what do you make of this kind of big tech frenzy around online learning and upskilling? Yeah,
Alexander Sarlin 21:57
it's great questions. So one thing that just to set the stage that in a way that I think is kind of interesting, both Amazon and Facebook and Google, arguably, actually have their roots in the sort of education world. I mean, Amazon really was founded originally, basically, as a competitor to Barnes and Nobles, which was basically a textbook sales company. I mean, that wasn't the extent of what they did. But it's a lot of what they did. And I think what's interesting about Amazon's move here is that they basically have just launched a new portal for online courses where you can search online courses directly, the majority of things that are on there right now are AWS courses, just like you're saying been their cloud computing courses, their machine learning courses, their programming courses that are already created and offered by Amazon itself, for the AWS services. But the key twist here is that anybody can sell courses through Amazon. And that's why it's a Udemy competitor. This was reported by class central this week, they always have their eyes on anything, you know, MOOC like or open learning like, and that is what gets really complex and very interesting, because Amazon Ave Udemy is a pretty popular site, but nothing competes with Amazon for eyeballs. So the idea of individuals being able to put courses, like my ad tech product management course, or anybody's courses of any kind on Amazon, and then get the advantage of all of Amazon's infrastructure, you know, instant delivery, obviously, these are online products. So it's, you know, great UX, super fast performance reviews, you know, everything that Amazon has done for optimized for their products over the years are suddenly available inside the online course portal. That's big deal. And I think this, you know, Amazon strategy in edtech, has been confusing. It's not always clear what they're about. They bought 10 marks many years ago, but it's unclear what they totally done with it. They've tried launching OER platform within Amazon for people to upload educational resources, but they people were uploading resources that were copyright protected, and they ended up shutting that down. What's really interesting about this is that, you know, Amazon is the biggest, you know, marketplace for sales for anything in the world. And when they start to take online courses seriously, if they start to take online courses seriously, starting with their own catalog, they very quickly become the biggest online course platform in the world. Are they have the opportunity to be if they marketed at all on the site. It could be a drop in the bucket, it could be something that's just a tiny, as you often say, been a rounding error, a tiny, tiny initiative from somebody in the AWS department at Amazon that says hey, why don't we put our courses on on the main site, or it could be the beginning of a takeover. And you know, Facebook's history is also obviously in academia, it started in, in Harvard, it was designed for, for college students to be able to, to meet each other and do the sort of social socializing within a college campus atmosphere and now Facebook is starting to also offer individuals the opportunity to publish courses on Facebook. I think what's interesting about both these moves is that they're trying to leverage their enormous user communities. Rather than, you know, purely own the space. Amazon is publishing its own courses, but it's opening it up to its ridiculously large user community. And you're going to see a lot of migration of Udemy courses onto Amazon, you're going to see a lot of migration of, you know, anybody who's teaching anywhere is going to at least cross list on Amazon, I can't tell if this is going to be something we look back at and say, Oh, remember that moment they did that it was, we thought it was gonna be a big deal. And it was nothing. Or if it's going to be the moment where big tech really sort of puts its massive thumb on the scale. But to your question, Ben, I think anybody who is selling courses online through Udemy, or Skillshare, should probably try to get their course crosslisted, on on Amazon, and Facebook, because you're gonna get a global audience real fast.
Ben Kornell 25:56
Yeah. And it's reminding me of Ryan Craig's newsletter this month, where he talked about, you know, when LinkedIn kind of leaned into the professional learning space, how he was skeptical, and, you know, he's talking about how the degree is the thing. But that really was a threshold moment for online upskilling, because you had a big player kind of legitimizing the market, they also did some m&a. And once LinkedIn kind of got into that space, it did show the power of the network. And so there's a way in which, you know, from a small or mid sized, online course provider, one way to respond is like, oh, I want to be cross listed on all of these. The other is like, Is this my moment to get acquired? Because there's a arms race here? And, you know, will they buy me for my content? Will they buy me for my users? Will they buy me for my production engine, whatever may be your competitive advantage. These companies are clearly building teams and sinking money into this space, it could be a great exit opportunity for folks in the space,
Alexander Sarlin 27:06
especially for like a company like, formerly great courses now wondering them. It's been acquiring all these content libraries in relatively high demand areas like cooking, photography, you know, history, certain kinds of history. If I were an Amazon, or Udemy right now, and there's these, you know, enormous catalogs of high quality courses that can instantly fill your platform. Yeah, it could be a really interesting a merger or acquisition opportunity, especially
Ben Kornell 27:32
if you're trying a marketplace strategy, you got to build the supply side to build your demand side. But once everybody's in your ecosystem, it becomes the de facto ecosystem. And Udemy has done a pretty good job. But we've seen the completion rates be pretty low compared to other learning platforms, and especially in person learning. So there's still some real space to be unlocked. You know, given that we've got a future of big tech shaping upskilling. They're also shaping the universe that we live in. Alex, tell us a little bit about the metaverse and how that's impacting it tech.
Alexander Sarlin 28:11
Yes, it feels like we have a little bit of a Metaverse report almost every every week on this show. But I think it's probably a smart thing to keep our eye on and for all our listeners to keep their eye on because there's a lot of heat around the concept of what might educational Metaverse look like. There was a really interesting report earlier this year from the meridian group in association with the Harvard Graduate School of Education that I wanted to highlight. And we'll obviously put the link in the show notes as well, because I think it you know, it gives a high level overview of the idea of what VR is and xr extended reality that I think gives a very sort of sober and smart overview of how we might think about this virtual space. And this isn't didn't come out just this week. But I think it's relevant to things that are continuing to happen in the metaverse in decentraland. With Facebook putting out you know, major, serious TV ads about the about how the metaverse is going to be the educational Metaverse is going to is going to happen. One of the things they focus on is the idea that, you know, we've often thought in the history of educational technology that each new technology was going to revolutionize education. They thought it with radio, they thought it would television, they thought it was computers in the first place. They thought it was the internet. And in every case it happens but at a lesser scale and a little bit less dramatic or and sometimes a little a lot less idealistic than then you'd expect. And they sort of warn in this report that VR and AR and Metaverse may be you know, ripe for this type of of thinking that people just expect it to be changed everything but when you actually sort of get past the hand waving you it's a little bit unclear how it's going to do that. And one of the things they do that I think is worth thinking about is looking at the affordances. What does AR and VR and Metaverse learning do? Well, and what does it not do well yet, and they have a bunch of different lists. They have some case studies on how it works. And I think it's, you know, it's somewhat academic, you know, take and I don't think it fully sort of embraces the excitement around the metaverse that some of these big tech companies and gaming companies are doing. But I do think it's worth looking at. They talk about, you know, visualization, immersive storytelling, the idea of, you know, game based learning and motivating learning as some of the big advantages role playing perspective taking makes a lot of sense. But they also talked about some limitations that I don't think any of us think about that often. So the idea that currently, all the amazing data that's being collected in the metaverse doesn't really feed into any kind of meaningful data story, it's difficult to do learning assessment, at least nobody's really figured it out. Yet. Affordability can be hard, especially for using headsets, accessibility can be hard, because for visually impaired learners and others, privacy safety, you know, they mentioned cognitive load. And you know, I just think it's a really interesting report. And it's something that I'd like to highlight for the listeners, just as all of these VR ed tech companies start really, really putting the pedal to the metal, which I think is a good thing. We could maybe as a ecosystem, avoid going off the cliff, and just sort of making educational Metaverse into a punch line. So that's really my whole take on that then what do you think about new Metaverse initiatives? Do you think this is like, you know, hot or not?
Ben Kornell 31:34
Well, first, you have such good points on this. And I think at the highest level, you know, people are so bullish that they forget some of these on the ground considerations. And, you know, tying together the vision of what it could be with the practical implementation is, it's just such a good point. And I'm so glad that you pulled this story forward. Anybody who's working in this space should definitely read this report. From, you know, the angle I kind of read this through was the business angle, which was, first that anything in the metaverse is just incredibly expensive. And you know, you're talking about active learning role playing immersive storytelling, that kind of the amount of time the amount of energy production, that you need to create these simulated experiences, to be even approaching the real world equivalent, just massively expensive. And I actually also thought it was interesting, this concept of cognitive load, where people can get overwhelmed with being in a VR space for too long, actually points to like, where I think the business opportunity may be, which is like figuring out the right dosage of VR, and then wrapping it around non VR learning experiences. And you know, I had a chance to, you know, go do a demo with the dreamscape learn people, and they kind of have framed it as these learning labs where you go and dissect an alien creature and, or you go diving with whales and ocean, they were actually saying that even commercial VR, you know, just for entertainment purposes, at the kind of 20 minute mark to like 30 minute mark, people start getting overwhelmed. There's only so much sensory wise people can take in. And so in their partnership with Arizona State University, what people do is they do the lab for 20 or 30 minutes. In the VR, they kind of drop in, but then they drop back out. And then they're able to look at the data, kind of use conventional tooling to learn from what they did, I think that that's probably the more practical vision of what this is going to look like. And from an investor standpoint, it's a lot easier to imagine, you know, 20 minute modules that you could build rather than kind of fully immersive universes. I know, that's not totally what the kind of, you know, meta vision is, and many others who are going really big in this space. But from a midterm standpoint, in edtech, it seems like it's going to be a lot more precision VR, combined with non VR tools.
Alexander Sarlin 34:21
Yeah, I think that's a really smart take. And, you know, in terms of the expense of these things, I think, you know, we've talked on the show a lot about this, but we are in an interesting world, in that the engines, the sort of gaming engines that allow immersive experiences to be made are more ubiquitous, cheaper, faster than ever before. So, you know, it used to be that universities would sort of play with this idea of of immersion or making a sort of game world and it would take years and be really clingy and kind of terrible. And we are you know, between You know, Unity and Unreal and and you know sort of high end off the shelf solutions. There is at least an acceleration in the ability to a if you wanted to make an Egyptian pyramid, you know simulation, it's not impossible that a single teacher could make that it's certainly not impossible that a small company could make that. But your point is still really well taken, which is the idea that we are all going to live in an educational Metaverse like, Ready Player One, maybe that vision might actually be counterproductive in the long run. And maybe we want to think a little bit more creatively and realistically about how this can work given everything we know about education in schools.
Ben Kornell 35:39
Yeah, but prove your point. I think this is the one topic that's not going to end up being a punch line in the EdTech. You know, fad history. I just saw the other day that app loving gaming software maker actually made an unsolicited offer to buy unity for $17 billion. I mean, this, there's a space race or arms race going on here for who can amass the technology, but also the kind of market density so that everybody is on that platform. Everyone is using that Metaverse, and I know you and I differ, I think that there's inevitably going to be multiple meta versus and you are a purist. And that the original definition of the meta versus there's one, but people are really seeing education as one of the dominant use cases there. So any any investor it really has to think about in their portfolio? How given the expense, how much are they going to dedicate to the VR related technology? And will that crowd out funding for other non VR related things?
Alexander Sarlin 36:48
It's a really, really, really, really good point. You know, the offer to buy unity is, I think, going to be one of many, because there is a global arms race to find this. And one thing that I found very interesting about this Harvard report was that its definition of Metaverse actually didn't hear too that you know, one Metaverse to rule them all definition. They actually define Metaverse as a decentralized set of sort of interlocking virtual worlds and quoted Neil Stevenson, the author of Snow Crash who coined the term Metaverse, you know, 30 years ago. And as saying, you know, it's actually decentralized. It's interesting to hear that word in relationship to this because I've always thought that, hey, if meta and unity make the metaverse pay that centralized, but they go to a different definition, which is that, you know, maybe there would be many different, at least more than one different worlds that may be interconnected, and you'd go to you know, Shopify land to shop and, and, you know, meta land to, to socialize, and you know, Khan Academy land to do mastery learning. I don't know how it's all going to play out. But I just think that in our monopolistic tech landscape, I'd be surprised if it's really that decentralized, but maybe I'll be proven wrong.
Ben Kornell 38:02
Well, as we think about this space, we turn now to our topic number five, as always funding and m&a. I'm going to jump in with some of the funding rounds and feel free as well, Alex to, to add some color commentary, up grad raised a $210 million round that values the company at 2.2 5 billion. It's the latest in unicorns in India, raising massive rounds, but the timing is actually bringing up some really interesting and positive press. One thing that's also interesting about the investor group is it includes ETS, global, which does TOEFL and GRE tests. And also kaizen. And I don't know if people are aware of kaizen Kiz e n as an investor group, but they have been making some really interesting investments out of Singapore. And I find them one of the most skilled and fascinating investors because they really understand what's going on in Asian and tech market. So upgrade, you know, was has actually been around a lot longer than many of these upstart COVID companies. I believe they started in 2006. And they're basically growing. They've continued to grow even as kind of pandemic lockdown has gone away with revenue of 400 to $500 million USD, which, that's real cash money. Yeah. I also wanted to highlight Giotto, raising a $15 million series a funding, its FinTech and educational payments space and we're just seeing renewed interest in some of the infrastructure startups. Those that make doing the business of education more efficient, and territorian, Mexico City based company, they've raised $4.4 million. They're basically territorian is building a comprehensive learn To record with the idea that they're going to basically have the grad profile of every learner in Mexico as well as other countries. And I think that that's also interesting, you know, assessment continues to attract investment. rounding it out, we have kids science, raising a million dollars, that's Helsinki based, stem still going strong and achievable raising 650k. It's a digital only test prep company that focuses on graduate level exams in the US. It's a sector that is often you know, in a recession, you see a lot of people go into grad school. So it's a really interesting company that is an up and comer. What are you seeing up on the m&a space? Yeah, so
Alexander Sarlin 40:44
speaking of upgrade upgrade, which just as mentioned, just raise 200, and plus million dollars, it has done a couple of acquisitions this year, they bought a company called Harappa Education recently, and they just this week, acquired another company called exemplar. And you know, upgrades interesting, because, you know, we talk a lot about by news by Jews on this podcast as sort of the poster child for Indian Ed Tech. But upgrade has been churning for a very long time. And as Empar offers over 200, test prep courses, mostly for government jobs, and they have a 12 million subscriber base, basically, through mostly YouTube channels for all these different Indian government jobs. And, you know, I think upgrade is an interesting example of one of these edtech companies that just really goes where the demand is. And in the Indian market, the demand is often for, you know, ROI for education, that's going to get you very real meaningful outcomes put you put learners above the competition for jobs or for entrance exams, or for in this case, government job. So anyway, upgrade acquires example. And it seems there may be additional acquisitions in the future, a company called Prometric, which does tech enabled testing and assessment solutions. It's a testing and assessment company, acquired a AI company called fine tune, it's a hybrid AI human company. So that I think that speaks to the the increasing role of AI and activity in testing and assessments, which we've seen a through a number of different, you know, startups in the last couple of years, and we see education dynamics, acquired a company called edu first. So that's a company that is a leader in helping universities find high quality adult student prospects. And that is, you know, that is an idea that has its finger right on the pulse of where things are going right now. We're seeing declining enrollments among traditional undergraduates but increasing enrollments with adult learners. So that is a trend to keep our eye on. Yeah, it's interesting, because
Ben Kornell 42:47
the great roll up has yet to begin, I've been watching the wire re waiting for someone to start that roll up. And you know, by Jesus has been rolling people up for a couple of years, but there still hasn't been this flurry of m&a activity that we would anticipate in a low funding environment. So we'll keep you posted. Thanks for that, Alex.
So we're going to go to our game. Alex, what do we have for our listeners today in terms of our game, so we're
Alexander Sarlin 43:23
gonna play a game of two truths and a lie about some of the the strange stories that happen in education that we don't usually cover in great depth, but that are happening every week in this crazy education in ed tech world. So Ben, let me start with you. I will give you three stories, and you tell me which of them is a lie, which of them is not actually true. The first one is around the Bennington school board rescinding a plan to buy a high school property right next to a landfill. So that's all about where to build schools. And you know, yeah, there you go. The second is about the state of Oklahoma suing a edtech vendor over questionable spending and seeking all of this money for breach of contract. And the third is about back to school spending. And the idea that back to school spending is on track to match last year's record of $20 billion. So again, Bennington school board not buying a high school by a landfill state of Oklahoma suing an edtech vendor over questionable spending, back to school spending on track to match last year's record. Well, boy,
Ben Kornell 44:41
it's hard to tell which one of these is a lie. I hope that it's not school spending is actually set to exceed last year because I've been hearing stories around, you know, inflation essentially creating like a huge surge in expenses. It also wouldn't surprise me if Oklahoma was out suing people. So I'm gonna go with the landfill one. I've seen many public works projects next to landfills. And I think that that one is the lie. That's a
Alexander Sarlin 45:13
good guess. But that one is actually true. They reversed rescinded an offer the Bennington school board, the lie, and it's a little bit of a subtle one. But the lie is around the spending, sadly. And what it basically saying is that, yes, spending is on track to match the record, but the record is twice as high, as we said there. So inflation is driving near record spending, they're spending more as much as ever before, the national retail foundation estimates that families with families are going to spend, you know, $864 on average per student. And that's going to match the record of $37 billion of spending in schools.
Ben Kornell 45:59
I think that's a little bit of a cheating there, like, but I'll take it, I've got some truth and lies for you. Are you ready? Yes. Okay, so inflation, and the teacher shortage has been a huge topic. But there's some another shortage, bus drivers, Oregon has announced plans to pay bus drivers 200% More than the national average. And in general, bus driver pay has increased by six to $8. So that would be up to $30 an hour for a bus driver. The second story is about Congress. A recent report shows that in today's House of Representatives, only 12 Republicans actually send their kids to public schools only. All the others are private schools or homeschools, or whatever. And then the third one is California is now mandating start times for schools. So the governor has said, schools need to start later. And 8am is the earliest that middle school can start an 8:30am is the earliest for high school. So say goodbye to zero period. Which one is the lie? Wow,
Alexander Sarlin 47:21
super, super interesting. They all sound pretty plausible to me, I'm going to go with the start times only because that seems like too terrific a policy to actually be real.
Ben Kornell 47:37
Wrong. Gron Governor Newsom just passed the law and school board, we just had to change the start times. So and the story about Oregon is also true bus drivers are in even more short supply than teachers, districts across the country are having a bus driver crisis. No, I made it up about the House of Representatives. I have no idea what the actual number is. You could do an over under is it 12? Is it not? But always interesting to find out where are you know, policy makers put their own kids because that often belies their, on their fundamental beliefs. So that one is is the light.
Alexander Sarlin 48:20
Yep. Well, neither of us got it this time. But, you know, we only have time for covers the biggest stories in edtech. But there is always so much crazy stuff happening all over the country, especially right now, in all of these local school situations in higher ed, there's mergers. There's all sorts of crazy stuff happening and we always want to get as much packed in as possible. But I think we are probably out of time for this episode. Do you want to take us out Ben?
Ben Kornell 48:49
Yes. Thank you so much for joining us if it happens in ed tech you will hear about to hear on the weekend Ed Tech. Thanks so much for joining us. We'll see you or talk to you next week.
Alexander Sarlin 49:00
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