Scaling European Edtech

I recently came across this interesting report from Navitas Ventures – Global Edtech Ecosystems 1.0: Connecting the World of Education Technology.  Navitas analysed 20 cities with leading edtech ecosystems representing about 40% of global edtech.  Beijing, the Bay Area and New York are top of the class, with Boston, London and Shanghai challenging.  They also assessed a further 14 emerging ecosystems at different states of maturity.  It’s clear that edtech is thriving across the globe!

Scale is essential to success in digital and you can see that in edtech too, with the predominance of China and the USA.  In addition, given the demography and emerging status of the edtech ecosystems in India and Sub-Saharan Africa, it’s likely that together these four regions will give birth to a generation of edtech giants.  Edtech could significantly improve the life chances of hundreds of millions of people in these regions by increasing access, participation and engagement in education.  It’s a powerful promise!

HolonIQ

Source: HolonIQ

What about Europe?

Europe has some natural advantages in the edtech space.  We are home to many world-class education systems such as Finland. There’s a rich start-up scene in a number of European cities with London leading (but will Brexit make us BETT-sick?). Paris, Stockholm, Berlin, Helsinki and Amsterdam are vibrant and promising too, in fact there are more than 3000 edtech ventures across Europe today. Furthermore, there is significant and reliable spending on education through governments and ready access to venture and growth funding privately.

However, we lack scale

A lack of scale probably results in us under-serving our own customers.  It restricts our ability to expand to international markets. And it potentially exposes us to competitors grown in the big markets.  A lack of scale is restricting our potential.

European Champions

To address this, I think we need to create a European edtech network with strong go-to-market capabilities so we can effectively scale successful concepts across the continent.  I believe this network would be well served if it includes a handful of Champions to acts as magnets to talent, ideas and capital.

Learning organisation

I am interested in your ideas about how we could bring more scale to European edtech and what you think about the idea of building a European network with Champions.  How could we make that happen?  I’m also curious to learn from some of the challenger and emerging edtech ecosystems: how are they approaching this, what’s working and what’s not?  Learning is in our DNA, we need to put those skills to work if we are to bring this potential to life.

Sanoma’s Start-up Challenge Five Years On

Five years on from Sanoma’s Start-up Challenge on the Future of Learning at TNW2014, I checked out how the five finalists have fared.  I’m impressed!

Winner Labster raises growth funding

Winner of the Challenge Labster has been prospering and announced at the end of last month raising $21M in a series B round to develop more digital lab simulations and to grow in the US market.  Next stop the World.

DragonBox joins Kahoot!

Maths app developer DragonBox announced today that it has been acquired by Kahoot! for $18M.  Their claim is that together they are going to make learning maths awesome!

ClassCharts wins BETT

Edukey’s ClassCharts, a seating planner and behavioural management tool, has gone from strength to strength based on the close understanding of teaching and the classroom underpinned by a strong data and analytics capability. Edukey won Company of the Year at BETT2019.

Jumpido combines movement with software to boost maths learning and looks like quite a fun thing to do in primary schools.  Although the website is still active and the company was a finalist at the Forbes e-volution Award in 2016, they have been rather quiet since.

The website for the final contender Eduvee, an intuitive learning and tutoring platform, now re-directs to the education page of custom software and consulting company Elinext, likely indicating that some form of major pivot has taken place for this company.

Impressive

Overall it’s really impressive to see how much success these companies are achieving.  We were lucky to have selected such a strong cohort for our Start-up Challenge.

Inspiring

What I found inspiring in all of the contestants at the time was their deep understanding of their customers and their passion and drive to make a difference.  Five years on you can see the positive impact of the energy they have put into their ventures.

Looking forward >>

I’m curious on how far these companies will go in the next five years, and wish them every success in turning their ambitions into reality.

Higher Education Knews: Wiley Acquires Knewton

knewton

Following last week’s big yet long-awaited news of the intended merger between higher education giants Cengage and McGraw-Hill, this week has started with a more surprising announcement that Wiley is acquiring Knewton, for an undisclosed sum.

11 year old Knewton has been a prominent player in the edtech space, raising more than $180m of venture funding.  Recently the company has pivoted to combining its adaptive technology with OER in the Alta platform, with courses costing $39.95 or alternatively $9.95 per month.  This platform addresses the fundamental needs of outcomes and affordability in education, according to Brian Napack, CEO of Wiley and Chief Knerd Brian Kibby.

“Driving outcomes at an affordable price”

This is good news for students and further evidence that the higher education publishing industry is clearly transforming to providing affordable solutions, with lower priced subscription models.  In so doing this also offers a path to transformation and growth for the industry, through digital offerings and new business models.

Presumably Wiley could have licensed the technology from Knewton.  Likewise, Knewton could have operated more freely as an independent company in disrupting the market. Presumably the two parties concluded they can either move faster, or operate at a lower cost, or get a higher mutual commitment, or realise a more attractive financial profile by means of an acquisition rather than a partnership.  This does look like a win-win for the two companies.

In the meantime, all key industry players in higher education publishing have access to good adaptive technology, some in-house (such as McGraw-Hill) and some licensed (such as Wiley pre-transaction).  This move bolsters Wiley’s in-house capabilities. It’s interesting to note that Pearson, who was an investor in Knewton, decided to phase out their technology two years ago.

Both transactions, Cengage-McGraw-Hill and Wiley-Knewton, are good news for students looking for affordable outcomes, and positive steps in the transformation of the higher education publishing industry.  In my view, the broader scope of the unlimited subscription that can be offered by Cengage-McGraw-Hill, coupled with the funding potential that can be untapped through their cost synergy program, would suggest that that transaction has the higher transformative potential to the market of the two deals.  It will be fascinating to track adoptions and usage of the various subscription models and the learner outcomes enabled by those platforms in the coming years to see what’s really working for the learner.

Good luck to Wiley and Knewton in making a success of this deal!

Edtech: hotter than the Acropolis in August

At the beginning of the week I was in Athens celebrating my birthday. Let’s just say I was born in the 1970s :). I’ve always had an interest in Greek mythology (it was a good choice to read Mythos on the way) and as a man of learning, I wanted to see more of the homeland of Socrates, Plato and Aristotle.  An inspiring and thoroughly enjoyable visit!

News broke of the sale for $1.75B of plagiarism-checker Turnitin, more than the total amount that all edtech startups raised in 2018 ($1.45B) and also one of the biggest edtech deals this decade, beating LinkedIn’s purchase of Lynda, but smaller than the Ellucian deal.  This underlines the growing importance of technology in learning markets. In the meantime, Sanoma Learning is, with the intended acquisition of Iddink Group, emerging as Europe’s leading edtech company, with a couple of hundred million euros of digital/multichannel revenues and more than 300 tech employees.  It’s a hot place to be.  Hotter than the Acropolis in August!

The immediate focus back at the office was the steering of our High Five program.  At the beginning of March we went live with our Next Gen EdTech Team, where we have created one technology team for the whole of Sanoma Learning. It was good to see we are well on track to launch Kampus in Finland & Sweden, and Bingel in The Netherlands.  Overall I feel we are making great leaps forward with High Five!

Then we spent time with the Iddink team in preparing ourselves for finalizing the intended transaction.  There’s a good click between us, which is a great starting point.

At the end of the week we did the monthly business reviews with each of the units. We’re deploying a new stage-gated investment process into new courses and had a couple of very interesting cases from Poland. I was highly enthusiastic about how the team is approaching this and really appreciated to be able to spend time with them to learn more.  Well done!

Looking forward >>

Teachers value blended learning

In 2018, we carried out our SLIF survey (Sanoma Learning Impact Framework) for the fourth time. In total 7594 teachers answered the online survey, which was carried out in all our markets: Belgium, Finland, The Netherlands, Poland, and Sweden. The main purpose of SLIF is to investigate the impact of published materials on learning. This time we focused on blended learning materials.

We are happy to observe that digital materials are gaining ground in learning. The most important benefit of digital according to teachers is engagement. 68% of the survey respondents felt that digital materials are more engaging for their pupils/students than printed materials. This is easy to believe: for example Bingel with its visually appealing avatar characters which the pupils can adapt with pingping they earn from doing exercises has proved to be very engaging and motivating.

Ultimately we want to offer learning materials that lead to improved learning outcomes. When we asked which factors have the highest influence on learning outcomes, engagement was mentioned as the most important factor, followed by variation in learning activities, individual coaching, and timely feedback to pupils.

It is worth noting that the second most important factor, variation in learning activities, was also considered as something which is better achieved in the blended model. 64% of respondents thought that digital learning materials are better for providing variation than print materials. Again, this is easy to understand. Digital learning materials include video, audio, animations, interactive exercises, instant feedback, and other features obviously missing from printed materials.

Figure 1 summarizes nicely the teachers’ attitude towards digital learning materials. We can see that only 27% of teachers use only printed materials. Whilst it is significantly more than the amount of teachers using only digital materials (3%), we can see that the majority of teachers are somewhere in between, adopting the blended learning approach: 17% apply half digital / half print approach, and 44% primarily print with some digital components.

Figure 1

Figure 1. Teachers would like to use more digital learning materials

It’s interesting to compare the current state of teachers’ materials with their ideal situation. At the moment 17% of the teachers use half digital / half print materials. However, 38% would prefer to have this combination. The difference in print-only teaching is even more pronounced with 27% of teachers currently teaching with print only, but a mere 1% would like to do so also in the future.  This is firm evidence that demand for digital should grow in the coming years.

“Demand for digital in the blended mix to grow”

Whilst teachers want more digital, as our survey clearly shows, it is worth emphasizing that virtually no-one of our respondents would like to teach with digital-only materials. Currently 3% are doing so, but it is not seen as the optimal state by anybody. What to make of this? Our answer: blended learning models work best.

Santtu Toivonen, Lead Insight Manager, Sanoma Pro

John Martin, CEO, Sanoma Learning