While teachers continue to struggle for a decent middle-income salary, the edtech entrepreneurs are salivating about their success in the ed marketplace. Listen to the audio to hear the sound of happy money-makers.
Some people are getting very rich indeed by investing in technology to replace teachers and to call it “personalization.” When there is no teacher involved, it is “depersonalization.”
Here is the press release.
When Tom Davidson served as a state legislator for a small district in southern Maine two decades ago, he became intimately familiar with the byzantine, bureaucratic, and often, frankly, subpar sausage-making that goes into bankrolling education at a local level. (“There was never a shortage of good ideas, but almost always a shortage of money,” he says.)
So Davidson took his learnings to the private sector and founded EverFi, an education software startup, in 2008. As CEO, Davidson has been rallying some of the biggest names in business behind his cause. Indeed, on Wednesday, EverFi will announce that it has raised $190 million in new funding from a host of magnates to help bring schooling into the digital age. The company last raised $40 million a year ago, news Fortune covered first.
The round marks one of the largest deals to date in the area of education technology, also known as “ed tech.” It is exceeded in size by only two others: German publishing giant Bertelsmann’s $230 million stake in HotChalk, a firm that develops software for online graduate degree programs, and a $200 million fundraising by TutorGroup, an Alibaba-backed (BABA, -0.36%) startup that helps Chinese speakers learn English online. Both of those came in November 2015.
“We’re starting to see for the first time some scale in the space and the investments are reflective of that playing out,” Davidson said on a phone call.
In addition to catapulting EverFi into the ed tech big leagues, the fundraising round marks the debut deal for lead investor Rise, a newly established social impact investing fund managed by TPG Growth, a private equity firm that has also backed Internet hotshots like Uber and Airbnb. Rise contr
Other new investors included TPG Growth, which contributed $30 million, and L.A.-based MainStreet Advisors. The firms join existing investors Advance Publications, Rethink Impact, Allen & Co, as well as Jeff Bezos, CEO of Amazon (AMZN, +0.38%). Eric Schmidt, executive chairman of Alphabet (GOOGL, +0.31%), and Evan Williams, cofounder of Twitter (TWTR, +10.78%), are investors in earlier rounds.
Nehal Raj, a partner at TPG who leads tech investments, said that EverFi’s business meshes well with the firm’s investment thesis, which involves homing in on an outdated process in a market featuring relatively few competitors. Education has traditionally been “done in a labor-intensive, inefficient way,” Raj said on a call, mentioning the paper-based products, in-person meetings, and binders filled with sign-in sheets and lists of checkboxes, that are its hallmarks.
EverFi “automates all that in a tech-centric way,” Raj added.
Based in Washington, D.C., EverFi has about 200 employees. The company sells software subscriptions to schools and businesses that help teach financial literacy (understanding mortgages and credit, for example), responsible college behavior (involving hazing and alcohol consumption), corporate compliance (like sexual harassment and diversity training), and other programs. Among the firm’s customers are Google, Oracle (ORCL, +0.56%), Whole Foods (WFM, +0.94%), and Airbnb, as well as universities such as Harvard, MIT, and Stanford and 20,000 K-12 schools.
Another part of EverFi’s business involves striking partnerships with organizations that agree to license software on behalf of schools around the country. General Electric (GE, +0.05%), the NHL, the NFL, and Intel (INTC, +0.38%)have all done so.
To date EverFi has raised a total of $251 million including the latest round, its Series D. People familiar with the deal declined to comment on the firm’s private valuation, though one person familiar with the terms suggested that the company had not, at this stage, hit that oft-vaunted billion-dollar milestone.
Davidson said he plans to put money from the latest funding round into international expansion as well as possible acquisitions.
Rise, the lead backer, was cofounded by Bill McGlashan, managing partner of TPG Growth, along with Bono, frontman of U2 and well-known social activist, and Jeff Skoll, an early eBay (EBAY, -0.21%) exec, philanthropist, and film producer. Supplementing that trio, the fund’s board is stacked with philanthropic powerhouses who double as investors, such as Laurene Powell Jobs, Richard Branson, Reid Hoffman, Lynne Benioff, and Pierre Omidyar, to name a few.
Rise is set to announce Wednesday that it is adding three people to its education team as well. John Rogers, a veteran education, healthcare, and social impact investor, will lead the segment. Meanwhile, Arne Duncan, U.S. Secretary of Education under former President Barack Obama, and Rick Levin, CEO of Coursera and former longtime president of Yale University, are joining as senior advisors.
Though Rise has bright-eyed, do-gooder aims, it is far from a charity, in its backers’ view. The fund is expected to deliver social returns—helping underserved communities gain access to educational resources, for instance—along with financial ones, people involved in its management told Fortune.
Davidson said he spent considerable time walking the new set of investors through the fundamentals of EverFi’s business and technology. Bono, for instance, interrupted a few family dinners to go over aspects in granular detail, according to Davidson.
“It was super impressive how in the weeds he was in the deal and what we were building,” Davidson said. “He was hammering me with questions around Title IX school implementations.”
When Davidson’s wife would ask how much longer he might be, Davidson says he would inevitably reply, “I’m still on the phone with him. He’s asking about our rural Mississippi programs.”
Despite the interruptions, Davidson said he loved how involved the Irish rockstar had been in the process. “He is deadly serious about these issues,” he said about Bono. (You can read more about Bono’s business pursuits in this Fortune magazine profile from last year.)
EverFi will no doubt prove a bellwether for Rise’s investment strategy: an attempt to make money while achieving some social good. If the plan works, EverFi could also end up teaching the world a valuable economic lesson—that capitalism can strive for ideals beyond merely increasing shareholder value.
Just don’t call it philanthropy.
Diane Ravitch's blog 
Not on topic, but when you think it just can’t get any more insane:
http://azcapitoltimes.com/news/2017/04/27/house-republican-leader-teachers-get-second-jobs-to-buy-boats-enjoy-finer-things-in-life/
By coincidence, there was an interview on NPR with the head of the AMA. He pointed out that much of the technology doctors had to use to do their job had contributed to the reality that less t.han half of a doctor’s time is now spent on things besides patients. Perhaps we should learn from this.
The physicians I know are frustrated with the PUSH to use technology unneeded and wasting their time. My female ear physcian is upset that her two children are spending way too much time looking at a screen. She’s not the only physician who knows that too much screen time scrambles kids’ brain, social, and motor delveopment.
I’m sorry, but I just can’t boycott my favorite band of all time. My only hope is that Bono thinks he is doing something good but doesn’t realize that he just jumped on the boat with a bunch of deplorable education reformers throwing children under the bus in order to make a quick million or two :*(
Maybe Bono should “speak to Matt Damon” who knows a thing or two about education given his mother is a life-long professional educator!!!!! It is sickening how corporate ed reformers pull out all the stops in their PR campaign and woo the wealthy including stars who clearly “do not do their homework”!
This type of free market cowboy investing is being permitted to create “public private partnerships.” These initiatives are supposed to be evidence based, but they are highly speculative. In education we used to be very conservative when taking on a new approach. We researched, and did a small pilot program prior to adoption. Now the extremely wealthy can’t initiate almost anything and call it a “social impact” endeavor. In education it means that people like Gates can generate a lot of hype and spin and use our young people as guinea pigs. Children are not pancakes that can be thrown away if they a particular method of cooking it didn’t work. We are subjecting young people to callous, corporate experimentation. If these initiatives are a success, the shareholders make money. If they fail, these billionaires get a huge tax write off, and all us little folks get to make up the difference.
Maine Senator Angus King says it all with this quote,”“I don’t get this at all,” said Maine independent Sen. Angus King, squinting with disbelief. “I think this is an admission that government isn’t doing what it’s supposed to do. This strikes me as a fancy way of contracting out.” Diane is correct. This is not philanthropy; it is speculation. http://www.governing.com/topics/finance/gov-social-impact-bonds.html
I waded through all the depersonalizing sales language of the video, and now I have questions. Why are coding, data analytics, and “computational thinking” (whatever that is) considered more important than knowledge of histories, sciences, mathematics and literature? (Had to laugh when Kaya Henderson talked about replacing kindergarten curriculum with tech product awareness lessons.) Is writing code better than writing English? Also, if millennial teachers are supposedly “digital natives” who are, by having grown up with it, tech experts, why do we need to teach young people, digital natives to use tech? Isn’t that like teaching a fish to swim? And finally, do these tech heads have any ideas for making ed tech more worth the cost, or do they only have ideas for making their investments more profitable for themselves?
We adopt all things digital because it is the will of corporate king, Bill Gates. That is also one of the reasons the Common Core was adopted. VAM was also billionaire Bill’s baby. Billionaires are allowed to insert themselves into policy because they buy access. Why are vouchers being accepted in many states despite their horrible track record? It’s DeVos and the Waltons pulling the strings behind the curtain. If we didn’t have such low tax rates for the wealthy, a lot of their money would be in the “common good” pot instead of private pockets. Imagine the schools, roads, transportation and bridges we could have!
Yep, that about sums it up. The rich get richer. Not for the common good, not philanthropy.
A substantial number of the organizations, represented in the Pahara Fellows list, would have to claw their way into public education to get money.
Other Fellows are attached to and, presumably, are shilling for vulture foundations like those of anti-union multi-millionaires. A few are turncoats from public institutions.
I think the readers of this blog should take a look at the sponsors of programs offered by this EdTech outfit. They include educational programs on character offered by NFL football players and NHL hockey players. Fnancial programs are offered by investment firms, one program is offered by American Express.Teachers are being “certified” to use products pushed by EverFi. Corporate teachers are presented as if the best and most knowledgeable. See https://everfi.com/sponsors/
The belief that anyone can teach and be an expert in education is carefully cultivated by the EdTech Industry and by many private foundations created by the wealth of tech companies.
LearnCapital is one of the investors in Bridge International Academies, one of the bottom feeders in education for high poverty communities in Africa. BIA offers totally programmed instruction with scripts for teachers and non-stop testing for students. There is some indication that a version may be intrduced inthe USA, a version of those “teacher-proof curriculum packages” conjured in the 1960s and 1970s.
Multiple investors have supported Udemy. It is marketed as a “global marketplace for online education that is constantly growing and evolving. Offers students the ability to learn as they go, on their own terms, while instructors can share their knowledge with the world.”
A program called KidAdmit claims: “Preschool applications made easy. Getting into your top school made easier.”
Another is the Minerva Project, with multiple investors who promise “a reinvented university experience, providing an extraordinary liberal arts and sciences education to the brightest, most motivated students in the world.”
I have, in the works, a spreadsheet of the names of firms and the names of products that are attracting investors. The marketing and branding people are having a heyday inventing names for educational fare.
Here are some products for the early childhood market. Kidaptive, Knowledge Adventure, Speakaboos, Tinkergarten,Tinybop, and Tynker.
Investments that seem to be most attractive to investors are “learning management systems.” Among these are Blackboard, Class DoJo, Edmodo, EverFi (noted in Diane’s post), FreshGrade, and Hot Chalk. Some readers may be familiar with Schoology and Schoolzilla.
The Common Core lives on in LearnZillion, said to be “a highly flexible, ultra low cost production model for generating Common Core digital curricula that rapidly iterates and improves through use.” Just what every fan of the original Common Core needs. But there is more. MasteryConnect, is “a platform to connect Common Core assessments of student progress with classroom practice.” Some readers may be familiar with Schoology and Schoolzilla.
The EdTech Industry and major foundations supporting that sector have won a major victory from Trump and Republicans who have removed Obamas-Era privacy restrictions from internet service providers (ISPs). That means that a lot of these tech products being used in schools, in homes, and on the run via mobile apps will still have privacy clauses but these will be even weaker than they already are. Selling the data generated from these products is no less profitable than profits gained from the sale of the product.
Hidden from view are the makers of algorithms–the new purveyors of “recommendations” for all of us.
Sources:
softwarehttps://www.cbinsights.com/blog/ed-tech-market-map-company-list/
and at
http://learncapital.com/#portfolio
What a dizzying array of tech products! They will be presented as the “next big thing,” but most of them will crash and burn. If schools lean on these platforms too much, it is the students that will suffer the loss. Meaningful education is about relationships among humans, not machines. Humans are much better at presenting “the big ideas” whereas current machines are limited to stimulus and response, regardless of how marketeers present their products. Schools and parents must understand that their children’s data will be sold on the open market. I am not against technology, but IMHO, technology should support instruction, not drive it.
“The company sells software subscriptions to schools and businesses that help teach financial literacy (understanding mortgages and credit, for example), responsible college behavior (involving hazing and alcohol consumption), corporate compliance (like sexual harassment and diversity training), and other programs. Among the firm’s customers are Google, Oracle (ORCL, +0.56%), Whole Foods (WFM, +0.94%), and Airbnb, as well as universities such as Harvard, MIT, and Stanford and 20,000 K-12 schools.”
Do they ask if people like learning this way? It’s been a cheap way to train employees for at least a decade, but do employees like it and feel it’s valuable?
My middle son is a apprentice in a skilled trades, they take safety training online one day out of fourteen and they all say it’s terrible. They dread the days they spend in class plodding thru these programs.
I keep wondering who is demanding these products. I have yet to encounter a single person who says “what I want is online learning”. These are young people. They grew up with this stuff. Do they love it as much as these investors keep telling us they love it? Does anyone ever ask them?
I feel like they’re afraid that if they ask the people these programs are designed they’ll get an answer they don’t like so they just keep hyping “demand” as if it’s coming from students. Is it?
My son had regular, on-line and hybrid courses in college. He stated that the traditional courses were far more engaging and thought provoking. The on-line courses were tedious and boring. He put up with the lifeless, on-line work because he wanted the credit. In short, they were a drag. The dumbest one was a public speaking course in which he had to work with a cohort, videotape the talks, and email them to the instructor. My son ran the group because he had the video equipment and knew how to put it all together. It was a time consuming joke!
I teach middle school computer classes. The initial novelty of using computers is long gone. Doing something you have to do on a computer is boring. I teach creativity. Students help each other. They get the same assignment yet their work is unique. The motivation comes from what the student wants to do. Software does not inspire. This era is redefining our society and I fear it will continue for quite some time simply because it’s failures will be blamed on the resistance of those of us who know better and partial implementation. If only everyone adopted what we want it would be successful. They will double down. Teachers will have to be very brave or parents will have to be militant. I don’t see either yet.
Ed Tech is the death of education as we know it if we do not insist it become a supplement to education instead of supplanting education.
The comments on this thread remind me of a witty observation (variously attributed and worded) that now seems a lot more painful than funny—
“If Your Only Tool Is a Hammer Then Every Problem Looks Like a Nail.”
Quote Investigator: http://quoteinvestigator.com/2014/05/08/hammer-nail/
The heavyweights of corporate education reform see themselves (and their self-serving use/misuse/abuse of data & tech) as the hammer and everyone and everything else associated with education as the nail. Which is why they need not just enablers but enforcers and punishers.
Caveat: THEIR OWN CHILDREN don’t get treated as nails. That’s just for OTHER PEOPLE’S CHILDREN.
😎
@ Left Coast Teacher
“Why are coding, data analytics, and “computational thinking” (whatever that is) considered more important than knowledge of histories, sciences, mathematics and literature?”
Training for AI
One affluent So. Cal. school district has decided 5th grade children should begin planning their career paths. They call it “pathways” and the school board is eager to bring corporations into the schools so kids can make connections that could facilitate internships. This school board is off their rocker and no one even bothers to run against their corrupt system.
We have College Board, city staff and non-profit grant recipients working together to peddle an app funded by Bezos Foundation and supported by international conglomerates which no doubt line their pockets.
This is nuts. Fifth-graders should not be thinking of their careers.