The EdSheet Vol. 15

As a reminder, this newsletter covers the business side of the education industry - venture funding, M&A, other financial transactions, and the news investors and business leaders should know about the market. 

Whiteboard Advisors also produces a daily newsletter - What We’re Reading - of curated, industry-focused news clips and a weekly newsletter - Whiteboard Notes - focused on education policy and industry trends published by W/A co-founder and CEO Ben Wallerstein.

Hello!

Hope those of you in the US enjoyed a wonderful holiday break! The holiday does not seem to have slowed down the announcement of financial transactions, with more than 20 being released over the past 3 weeks. In this edition, we’ll cover those transactions and industry news of note, headlined by:

• McGraw Hill files for IPO: With the exception of Pearson, most of the major book publishers have been privately held for years. We’ll see if the McGraw IPO is the start of an IPO trend or triggers another series of buyouts.

• Big Tech partners with the AFT: Microsoft, OpenAI, and Anthropic commit $23M to support an AI training hub for AFT union members, creating an unexpected but interesting alliance between AI and labor.

• Universities Feeling the Squeeze: Universities across the US are being put under pressure - both ideological and financial - by the Trump administration, headlined by UVA’s president being forced to resign and Northwestern navigating the loss of $790M in federally funding revenue. 

• Rise of the Contracted Clickworker: While most media attention focuses on the jobs AI is taking, I am interested in the new classes of jobs that it is creating. Data Labeler may not have the same cultural cachet as Paralegal or Investment Banking Analyst, but could turn into an important first step in an AI-enabled professional career. 

As always, I would be grateful for your submission to the EdSheet reader survey. Every response is another datapoint helping me understand the content you want to read about.

With that, onto the news!

Funding / M&A

Whiteboard Advisors not only provides policy and market-related diligence and advisory services, we track every financial transaction that happens in education — and keep a record of all deals that are publicly announced.

The following transactions caught our eye over the past few weeks. If you have a deal to announce, or would like access to the full transactions database, please reach out.

Venture Funding

• Animag raises $85M / France, Content Provider (Children’s Generalist) / HarbourView Equity Partners, Bpifrance Large Venture, JP Morgan, Bootstrap Europe, Left Lane Capital, XAnge, Daphni, Marquee Ventures

• Honor Education raises $38M / US, Corporate Training / Alpha Edison, Wasserstein & Co, Audeo Ventures, Interlock Partners, New Wave Capital

• Zeelo raises $23M / UK, K12 Infrastructure (Transportation) / Blue Earth Capital, Direttissima Growth Partners

• Paraform raises $20M / US, Recruitment Platform / Felicis, A*, BOND, DST Global, Liquid 2

• Edurino raises €17M / Germany, Early Childhood Software Provider / Ravensburger Next Ventures and Summiteer

• Acorn raises $12.3M / Canada, LMS / Level Equity

• Handspring raises $12M / US, Mental Health / NextView Ventures, nvp capital, 25madison, Arkitekt Ventures, VamosVentures, Hyde Park Angels (HPA), Cornucopian Capital

• Bumo raises $10M / US, Early Childhood Marketplace / True Ventures, Offline Ventures, Goodwater Capital, Marketplace Ventures

• Galaxy Education raises $10M / Vietnam, Language Learning / East Ventures

• AI Hay raises $10M / Vietnam, Content Provider (Homework Help) / Argor Capital, Square Peg, Northstar Ventures, AppWorks, Phoenix Holdings

• Pro Athlete Community (PAC) raises $7.6M / US, Career Development Platform / GSV Ventures, Maveron

• Wilgo raises €6M / France, Test Prep / Daphni, Founders Future, Kima Ventures, Sequoia, Better Angle, Epsilon VC

• TuringDream raises €6M / Spain, Corporate Training / Adara Ventures, HWK, Next Tier Ventures

• Pangram raises $4M / US, HED Infrastructure (Cheating) / ScOp, Script Capital, Cadenza, Haystack VC

M&A

• Snap acquires Saturn / US, Social Network (K12 School Software)

• Udemy acquires Lummi / Content Provider (Image Generation)

• Nord Anglia acquires H-Farm International Schools / UK (Italy), K12 School Provider

• MasteryPrep acquires Sirius Education / US, Assessments

• Noodle acquires MindMax / US, OPM

• Brave Bison acquires MiniMBA for £19M / UK, Corporate Training

• Ecctis acquires Enroly / UK, HED Student Recruitment Platform

• Faria Education Group acquires Vectare / UK, K12 School Software Infrastructure (Transportation)

• iSchool acquires Seedoor / Egypt, Content Provider (Coding)

• Gravyty acquires Athlete Network / US, HED Software Infrastructure (Student Support Services)

VC Funds

• ZNext raises €60M from Zanichelli Editore

Other Transactions

• McGraw Hill files for IPO

What’s on your Whiteboard?

• Seesaw CEO Matt Given on buy vs. build strategy when entering new markets

• Renaissance CPO Todd Brekhus and the divergence in AI strategy between startups and mature companies

• Reach Capital Partner Steve Kupfer on how public and private organizations can work together as more states adopt school choice initiatives

Industry News of Note

This section is intended to be more exploratory, a reflection of stories I think are important and ideas/trends I’m contemplating. It is free today, but will be going behind a paywall soon.

K12

• Microsoft, OpenAI, and Anthropic commit $23M to AFT for AI training hub for teachers. $23M is a relatively cheap price to create allies in 2 groups - teachers and labor unions - that have both legitimate reason to be concerned about the impact of AI on their jobs and the broad-based public support for those concerns to garner mainstream media attention. Great deal for them and a forward-thinking deal for AFT.   

  • Related, 60 companies sign White House’s “AI Education Pledge.”

  • And, Microsoft commits $4B to AI education.

• Long-form review of Alpha School, the “2-hours-a-day AI school.” TLDR: I have no idea how the story of this school turned into “taught entirely by AI.” That is incorrect, and the pedagogical model is actually pretty interesting. (Small, privileged sample size yada yada.) By isolating academic work from social-emotional work, the school, seemingly, creates more room for both.

• Chan-Zuckerberg-funded school in East Palo Alto shuts down. The headline makes this decision sound worse than it is. Buried halfway down in the article is the news that each student at the school will receive a cash gift and the local school district will receive a $26.5M(!) grant. What is sad about the closing is that the CZI team did not feel comfortable enough talking to the press to provide a public retrospective on what worked and what didn’t with this project.

Higher Ed

• UVA President James Ryan resigns under pressure from Trump administration. Commenting on the topic, former US Secretary of Education Ted Mitchell said, “[it’s a] sad day for UVA and very worrying for higher education in general, this level of interference by the federal government in the internal affairs of a state university is as unprecedented as it is unwarranted.”

  • Related, how Trump blew up Northwestern’s business model and layoffs, budget cuts pile up in June. The financial outlook for universities - even elite universities - across the US is not good.

  • Maybe adversity creates innovation though? Turkish private equity firm invests $39M in Harvard research lab. The firm will also have certain (undisclosed) rights to any drugs that come from lab research. 

• Also innovating financially? College football and basketball programs. Though some think that the college sports gold rush is about to run into a brick wall. I will happily take the other side of this bet.

  • Related, North Carolina governor signs bill shielding name, image, and likeness (NIL) contracts from public records. Nothing to see here, move along.

• On the college and university governance front, Florida State, Texas A&M, Georgia, UNC, South Carolina, and Tennessee systems team up to create new accreditor. 

  • And, Ohio follows Minnesota in passing OPM governance legislation.

• Yikes! 1.2M fake students applied to California community colleges last year, 31% of all applications. 

Workforce

• Labor market vibe shift. 63% of employers are planning to reallocate or rebalance benefits spending in the next 3 years, largely due to the rising cost of said benefits. This is up from 8%(!) last year.

  • Related, Ford CEO says “Artificial Intelligence is going to replace literally half of all white-collar workers in the US.” This take is too doomerist for my taste, but it does fit the narrative that hiring leverage is swinging towards employers.

• Your new first (white-collar) job? Contracted Clickworker. Just weeks after Meta paid $14B for ~half of Scale AI and Handshake announced itself as a data labelling force, Uber is now in on the enterprise data labelling game. 

  • “Contracted Clickworker” sounds almost pejorative, but should be a great entry-level job. The ability to consistently manipulate data - or “context engineer” - for AI tools is a durable technical skill at any seniority level.

  • Not interested in being a contracted clickworker? How recent college grads can get a job. TLDR: traditional job applications are empty calories, the best candidates show their fit by finding a way to proactively support the organizations they want to work for.

  • Or, you could be a teacher! Could AI-driven job apocalypse push best and brightest into teaching? Colorado is even offering $10K bonuses to attract and retain teachers.

• Two places you won’t find your first job? CareerBuilder or Monster.com, who recently filed for Chapter 11 bankruptcy.

Other

• ED is falling behind on producing key statistics. Not technically a 5-alarm fire yet, but not looking good.

• Does AI make us stupid? “The age of stupidity is not yet upon us—at least not compared to how stupid things already have been.” In short, that MIT study about the effects of ChatGPT on our cognitive abilities was…not well done and explicitly told readers they should not conclude that AI makes people smarter or dumber.

  • Related, After move 37. I am on team “AI makes people smarter.” From 1960 to 2010, the “average decision quality” of professional Go players stagnated. Since 2016, when Go world champion Lee Sedol lost to Google DeepMind’s AlphaGo artificial intelligence model, average decision quality in professional Go players has increased dramatically.

  • So, how do you teach computer science in the age of AI? I suspect it will look a lot more like modern Go training - where humans work with AI to get better. There will be a lot more system architecture and context engineering (twice in one newsletter, remember this term!) than rote function writing.

• Apropos of stagnation and pushing the envelope of what is possible with humans and computers, Peter Thiel and the Antichrist.

Looking for your next opportunity in education? Check out our W/A Jobs, which features 3,269 career opportunities from 303 organizations across the education industry. A few roles that we’re excited about from the past week:

• ISTE is hiring an Arlington-based Senior Director of Business Development & Strategy to support revenue growth and strategic partnerships across the organization

• Avela Education is hiring a San Francisco-based Account Executive to support the company’s go-to-market function

• The XQ Institute is hiring an Oakland-based Editorial Director to lead day-to-day execution of the organization’s content strategy

Whiteboard Advisors is the leading policy-related diligence partner for education investors, advising on most major private equity transactions in education over the past 15 years. Our specialty is translating complex policy/political dynamics into financial models. Reply to this email to learn more.