With two landmark investments each over the past six months, Europe’s Bertelsmann and South Africa’s Naspers have laid bare their ambitions for the global edtech markets. In November 2015, Bertelsmann led nearly $350 million of investment into Udacity and Hotchalk (as summarized in our 2015 year-end recap of edtech venture investment), while Naspers has just invested $75 million into Udemy and Brainly. Its telling that three fourths of these investments were in direct to consumer, online learning marketplace and P2P start-ups, including two of the “MOOCs” (with Udacity even achieving unicorn status in the round)1)You can read about other types of marketplace models across the education startup world from a summary of our recent meetup on the subject here on EdSurge..
But its all the more telling that these two global digital media powerhouses are not alone in investing into B2C edtech startups. Indeed, every one of China’s technology leaders have made splashy investments into education marketplace models (whether start-ups or subsidiaries), while India’s Times Internet has invested in yet another MOOC, Coursera. Standing in firm contrast, here in the US, our so-called Four Horsemen of the Techpocalypse (the dynamic FANG group of Facebook, Amazon, Netflix and Google) are often maligned for still having failed to make any big investment or acquisition headlines in edtech (heres a representative post from today on Re/Code). One education venture investor even shuts down any edtech entrepreneur who dares dream aloud about a potential exit to a Silicon Valley giant. And so this all begs the question, why have these US technology industry leaders invested billions into streaming online entertainment, but so little into online education?
The US Education Market Bares its FANGs
In reality, US tech leaders have invested in education, only via very different models, but it bears repeating for the rest of the world’s internet champions now:2)We could write a whole separate article on the moves of media conglomerates like Discovery (a small, relative success), NY Times (nothing much to speak of), and News Corp (a billion dollar blow-up in K-12 education through Amplify / Wireless Generation which merits yet a further dedicated post).
- Facebook announced a project in September 2015 to build personalized learning software with the Silicon Valley charter school group Summit though any strategies to commercialize such remains uncertain and the whole entire initiative seems more of a pro bono test case for the subsequently announced personalized learning Chan Zuckerberg Initiative LLC and Zuckerberg Education Ventures (a family affair run entirely separately from Facebook, Inc.).
- Amazon was supposed to have launched this past month its “Inspire” marketplace of free OER course materials after previously dabbling with acquisitions of educational apps like Tenmarks. Buried deep within its site, there is a list of the company’s various discrete education resources, but “AmazonEducation.com” still just redirects to a “wait list” and their big push into education remains to be seen. Still Frank Catalano’s recap on EdSurge of Amazon’s more coherent education strategy in Brazil and Techcrunch’s recent update keeps us hopeful this is a not a failure to launch.
- While Netflix has not done anything in education, Google did launch a Google Play for Education marketplace for educational apps on its Android operating system in 2013, but within 36 months quietly shut it down. In spite of themselves, Google’s Chromebooks continued unabeted in their inexorable growth across US classrooms.
While deFANG-ed long ago, Microsoft is still a telling example having invested $300 million into a Barnes and Noble subsidiary made up of its brick and mortar college bookstores and Nook eReader only to end their partnership 36 months later (and no, their recent purchase of Minecraft and Minecraft EDU are not edtech). Apple also outgrew any FAANGs categorization long ago, but its edtech dalliances stretch back even farther having acquired PowerSchool for $62 million back in the last Bubble only to divest it to Pearson five years later (who in turn just divested it again this past year).
Building an Apple for Education
More relevant than its 2001 acquisition of Student Information System PowerSchool, another relatively ancient move by Apple provides the best case study for US Tech moves in Education: Apple’s launch of iTunesU in 2007. As Apple’s VP of Education John Couch related at the 2015 BETT Conference: Apple has more than one million apps (over 100,000 thousand in education alone), more than two million books, almost one million media files and more than 10,000 public courses through iTunes U. Per Couch, iTunesU has enabled hundreds of schools and universities to create their own books, “bypassing the publishing industry”. And bringing this technology leader full circle to their PowerSchool days, they have added more robust gradebook and assignment functionality to iTunesU while also cleverly acquiring LearnSprout, a K-12 edtech start-up providing integration with SIS vendors.
I intentionally leave out any sexy MAU metrics for iTunesU because the kind of education initiatives I want to highlight across my FANGMA grouping all share in a more pragmatic focus on institutional sales. In this way, foreign corporate interest in massive open online course marketplaces reveals a critical confusion as outside of East Asia (i.e., China, Japan and Korea), all education markets are based upon publicly funded, institutional sales channels. While strategic investments into the over-hyped MOOCs may be good for Techcrunch headlines or CB Insights league tables, the less buzzy moves by US tech leaders reflects a more nuanced and battle-tested understanding of how education works.
And so, the real reason we have yet to see an edtech entrepreneur make good on their pitch deck’s promise to “build the Apple for Education” is that it already exists…right there at Apple, Inc.
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|1.||↑||You can read about other types of marketplace models across the education startup world from a summary of our recent meetup on the subject here on EdSurge.|
|2.||↑||We could write a whole separate article on the moves of media conglomerates like Discovery (a small, relative success), NY Times (nothing much to speak of), and News Corp (a billion dollar blow-up in K-12 education through Amplify / Wireless Generation which merits yet a further dedicated post).|