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Ed-Tech Usage Soared During COVID. Now Districts Are Scrutinizing Those Tools

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After their ed-tech usage soared during the first year of the pandemic, some districts are now looking to “constructively reduce” the number of tools and platforms in play. That has implications for companies.

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K-12 Dealmaking: GoGuardian Receives Infusion of $200 Million; Lightspeed Ventures Funds Gaming Startup

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Classroom management and ed-tech product provider GoGuardian recently raised $200 million from Tiger Global Management, putting GoGuardian’s value at over $1 billion, according to an announcement.

“We are excited to partner with GoGuardian, with its industry-leading product offering and best-in-class growth at scale, margins and retention characteristics, as the company cements its position as a true end-to-end SaaS platform for K-12 schools,” Tiger Global partner John Curtis said in a statement.

Based in Los Angeles, GoGuardian provides a product suite that seeks to allow districts to unify their filtering, classroom management, device management, and school mental health tools into a single point of contact.

Over the past year, GoGuardian says its customer base grew by 60 percent to include more than 10,000 schools, including 23 of the top 25 largest U.S. districts.

The Tiger Global investment is intended to support GoGuardian’s growing suite of products, as the company plans to use the money for product innovation, hiring, and business development, according to the announcement.

Class Technologies Scores $100 Million Investment from SoftBank. Washington, D.C.-based Class Technologies, which develops digital teaching and learning tools that integrate with Zoom, has received a $100 million investment from SoftBank to help the company’s global expansion efforts, co-founder Michael Chasen wrote in a July 28 blog post.

The company, which made headlines earlier this year with high-profile investments from famous NFL quarterback Tom Brady among other contributors, is “committed to delivering Class to some of the most disadvantaged and hard to reach populations in the world,” Chasen wrote.

Class has already expanded to several countries outside the U.S., and has been fielding inquiries from schools, universities and companies “all over the world” who want to add educational tools to Zoom, Chasen said.

Past investors include Salesforce Ventures, Sound Ventures, and veteran talent executive Guy Oseary.

Class has raised over $160 million since it launched in September, according to an announcement.

Children’s Gaming Startup Raises Pre-Seed Funding from Lightspeed and Y Combinator. Wilmington, Del.-based live game streaming platform Kalam Labs on Aug. 13 announced a pre-seed funding round from Lightspeed and Y Combinator.

Kalam Labs plans to use the money to develop fun and immersive virtual missions for kids ages 6-14 to learn STEM topics, according to an announcement.

“The 2020s kids have been born directly into the age of iPhones, Netflix and Google. It is impractical to make them sit in front of a blackboard or a Zoom Class expecting them to remember irrelevant information,” Kalam Labs co-founder Ahmad Faraaz said in a statement. “Education is undergoing a generational change and we plan to be at the forefront of building products that will accelerate this shift.”

Kalam Labs launched in June, has drawn thousands of paying students, and is growing its user base 50 percent weekly, the company claims.

The firm said its games’ live video and chat functions make them games suitable for the education sphere. A typical Kalam Labs session involves a live instructor taking a group of students through a virtual world while explaining STEM topics via game-based exercises and providing the “right nudges” along the way, the announcement says.

“Having seen hundreds of pitches in education over the years, we thought the approach Kalam Labs had for K-12 was one of the most interesting and fresh,” Lightspeed partner Hemand Mohapatra said in a statement. “We are excited to back the Kalam team as they take on this ambitious challenge.”

Higher-Ed Accessibility Platform Raises $650 Million. Singapore-based Emeritus recently received $650 million in Series E funding.

U.S. venture capital firm Accel and SoftBank Vision Fund 2 led the investment, which brings Emeritus’ valuation to $3.2 billion, four times higher than the company’s Series D valuation reached in August 2020, according to an announcement.

Emeritus collaborates with over 50 universities across the U.S., Europe, Latin America, Southeast Asia, India, and China, to make higher education accessible to consumers, companies, and governments. The company offers short courses, degree programs, professional certificates, and senior executive programs, and claims to have educated over 250,000 people across 80 countries.

The latest investment round follows Emeritus’ recent $200 million acquisition of global K-12 STEM education company iD Tech, which expanded Emeritus into the K-12 space.

“The unbundling of higher education and continued learning has only just started,” Accel partner Anand Daniel said in a statement. “We believe that the platform and deep partnerships with the world’s best universities puts Emeritus and its partner universities at the forefront of this revolution in higher education.”

Emeritus will channel the investment into working with university partners to develop new courses, create new products and industry education content, expand its offerings for governments and companies, and close more acquisitions, the announcement says.

The investment also saw participation from the Chan-Zuckerberg Initiative, Leeds Illuminate, Prosus, Sequoia Capital India, and Bertelsmann.

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Pace of Mergers and Acquisitions in Education Market Jumps, New Analysis Finds

pace of mergers and acquisitions in education market jumps new analysis finds
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The total value of mergers and acquisitions in the education industry grew by more than 50 percent from the second half of 2020 to the first half of this year, as companies across the market rushed to add to their portfolios, according to a report by investment banking firm Berkery Noyes.

The overall number of individual M&A transactions also rebounded to pre-pandemic levels.

Education companies closed 240 acquisitions in the first six months of 2021, up from 222 deals in the second half of 2020, and 210 mergers in the first half of last year. There were 238 acquisitions in the education industry in the second half of 2019.M&AGraph

The total value of education acquisitions from January through June was $19.4 billion, largely driven by Platinum Equity’s $6.4-billion acquisition of McGraw Hill, the report noted.

Deals made during this period had nearly as much value as mergers and acquisitions for the full year of 2020, when they totaled $21.4 billion.

The investment group, which provides advice and financial consulting to middle-market companies in the technology and information sectors, tracked 1,152 education deals between 2019 and June 2021.

Private equity financed 40 percent of acquisitions during the first half of this year, 8 percent higher than the 2019-2021 overall average.

According to Berkery Noyes, 97 of the 240 deals during this time frame were financed by private equity, venture capital, or some other investment firm, the most in at least three years and a 131 percent increase over the first half of 2020.

Twelve deals in the first half of this year carried values of more than $100 million, and at least seven of those involved the K-12 sector. About one-third of the total transactions had values between $4.5 million and $54.6 million.

K-12 media and tech surpassed professional training services as the education industry’s most active market segment year-to-date.

There were about 50 acquisitions that involved professional training services and roughly 40 deals that involved K-12 media and tech in the second half of last year, while nearly 60 deals touched K-12 media and tech and about 45 deals covered professional training services in the first half of 2021.

The report showed a mixed picture for market activity in various segments for the first six months of this year compared with the second half of 2020.

The rate of deals in the childcare services and higher-ed media and tech spaces increased during this span, but the number of deals in professional training technology, higher-ed institutions, and K-20 services fell. Deals involving K-12 institutions remained stable.

In addition to the McGraw Hill acquisition, notable K-12 deals in the first half of 2021 included a Byju’s purchase of Indian tutoring provider Aakash Educational Services for $900 million, Renaissance’s $650 million acquisition of Nearpod, and Kahoot’s $435 billion addition of K-12 single-sign-on provider Clever.

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In Their Own Words: What Students Want From Ed-Tech Products

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EdWeek Market Brief talked with two tech-savvy students about where digital products meet their needs, and fall short.

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A Changed K-12 Market: What Education CEOs See on the Horizon

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As students in many states return in person to classrooms, executives of education technology companies say they are dealing with a market that has been altered in a number of key ways.

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