This newsletter covers the business side of the education industry - venture funding, M&A, other financial transactions. Whiteboard Advisors also publishes a daily newsletter - What We’re Reading - of curated, industry-focused news clips and a weekly newsletter - Whiteboard Notes - which covers policy, industry trends, and insights from W/A CEO Ben Wallerstein.
Hello! Back to school season is upon us, lots to cover in this edition, including:
Reach Capital's $265M Fund V: Bringing this year’s new capital commitments to the education and workforce space to almost $1.5B. Reach’s new fund will back ~50 early-stage companies across learning, health, and work.
The Back-to-School AI Wars part 2: For the second year in a row Google, OpenAI, and Anthropic all announced significant updates timed for back-to-school season, this year focusing on the expansion of their free classroom and teacher-oriented AI tools.
“Mega” universities keep growing: WGU and SNHU have crossed 300,000 learners, while ASU, Ivy Tech, Grand Canyon, and University of Phoenix all approach 200,000 learners.
With that, on to 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. You can check out our Deals Database here:
The following transactions caught our eye over the past few weeks. If you have a deal to announce in this newsletter, please reach out.
Funding
Medly AI raises $8M / United Kingdom, Test Prep / Felix Capital (lead), Eka Ventures, Ada Ventures
Medly offers a test prep tutor for high school and college exams, predominantly for students in the UK. Founded just 18 months ago, the company says it now reaches 400,000+ students in the UK and that 74% of its users improved by at least one grade on their GCSEs (the exam the company focused on to start). This round comes roughly 15 months after the company’s $1.7M initial fundraise.
Legio raises $5M / United States, Campus Safety Software / Klass Capital (lead)
Legio offers software for university public safety departments, pulling a collection of operations and compliance tools into one platform. The proceeds from this round will be put towards product development.
Codio raises $5M / United States, Computer Science Education / Armada Investment (lead)
Codio provides a cloud-based coding environment for university computer science and technical courses. The company claims to have served 150+ institutions and 3M+ learners to date. Alongside the raise, Codio launched an AI literacy curriculum that will extend its reach beyond computer science classes to students in all disciplines; the University of Tampa will require the course for their students this fall.
Paloma raises Series A / United States, Family Literacy / Kapor Capital (lead)
Paloma offers a mobile app designed to support parents in teaching their kids to read, guiding them through 15 minutes a day of reading practice. Results include a 76% adoption rate among K-2 families in district partners like Houston ISD, Metro Nashville, and LAUSD. While Paloma was founded just 3 years ago, the company is built on 10+ years of lessons learned from the founder, Alejandro Gibes de Gac, who previously built family-literacy non-profit Springboard Collaborative.
M&A
Risepoint acquires Keypath Education's North American operations / United States, Online Program Management
Risepoint, which has quietly scaled to become the “dominant” OPM provider in the US market, adds Keypath's 20+ North American university partnerships in this deal. Perhaps more importantly, Risepoint also gains Keypath’s clinical placement network, which has placed 55,000+ students to date — clinical placement capacity is a frequent bottleneck for scaling online healthcare programs, the most competitive and important corner of the online degree market. Keypath will retain its Australian operations.
Duolingo acquires Animade / United States / United Kingdom, Language Learning
Animade is a 15-year-old London animation and motion design studio whose team will fold into Duolingo's Design Studio. This acquisition continues Duolingo’s streak of acquiring for the acquired team’s technical capabilities, with a particular emphasis on design/animation, rather than direct revenue growth or competitive concerns.
CSA Education acquires BetterLesson / United States, Curriculum & Teacher Professional Development
CSA, a provider of curriculum development and standards-alignment services acquired professional development provider BetterLesson. The combined entity, rebranded BetterLesson Learning, pitches districts a single partner for teaching resources, professional development, and analytics.
New Venture Funds
Reach Capital closes $265M Fund V / United States, Venture Capital
Reach's fifth fund will write ~50 checks of $1–10M into early-stage companies at the intersection of learning, health, and work. As mentioned in last week’s EdSheet special edition, I believe the firm's 10-year arc, from a $12M philanthropic seed portfolio to ~$1B in AUM, is a useful mirror for the evolution of the education market itself.
What’s on your Whiteboard?
News of Note
Early childhood
K12
A year ago, the Back-to-School AI Wars were fought over new large language model launches. This year's front is new, education-specific functionality on top of existing models: Google enabled Gemini for a broader swath of Classroom students, OpenAI expanded access to ChatGPT for Teachers in 20 states, and Anthropic made enterprise-grade Claude for Teachers accounts available for free to K12 schools across the US.
Which raises the question: If the big 3 model providers are providing so much free AI to large portions of the US K12 market, how are schools still spending billions on AI?
And makes ED’s Dear Colleague Letter on responsible use of technology in the classroom timely.
At the grassroots level, everyone is using AI. Teachers continue to experiment with it, teens continue to use it for homework (even though they feel guilty about it).
Given this, maybe it is time to lean into AI’s strengths rather than banning it for its faults. For more on this theme:
Except maybe in social media, where the large platforms have started settling cases accusing them of harming young people, headlined by this week’s $16.7B settlement from Meta.
A decidedly not-AI trend to get excited about: remaking school playgrounds as urban climate oases. A trend which could not be more timely as students continue to return to “dangerously hot” classrooms.
Higher ed
Higher ed is frequently criticized for its slow pace of change, to the point that it is trendy to say not everyone needs to go to college. It is one of relatively few industries where time matters more than money in determining success. However, if you look closely, changes are happening all over the sector.
Most notably, Phil Hill’s annual review of IPEDs enrollment trends shows online learning enrollments continue to consolidate among the “Mega” universities.
While research universities continue to experiment with new models to differentiate – from campus networks to research consortiums.
And a re-emphasis on tenure-track faculty hires over administrative staff.
Also, unclear that this will help its long-term success, but Harvard closed its writing center.
Meanwhile, students – and states! – are creating their own new pathways from high school to the workforce. Teen summer employment is up, as are gap years.
Gap years sound expensive until you read about the loan burden hanging over young professionals in England.
Workforce
Another trendy topic? That AI is killing entry-level work. Economists aren’t so sure.
While Anthropic contributes new research on the topic of worker retraining to mitigate labor market disruption from AI. The results were mixed, though with a few bright spots.
One job description that is booming? Chief AI Officer.
Whose official duties will start with rooting out “meat proxies” from their respective organizations.
Workforce Lagniappe:
Looking for your next opportunity in education? Check out our W/A Jobs, which features 3,485 career opportunities from 327 organizations across the education industry. Hiring? For $250/month or $1,000/year, organizations can post an unlimited number of jobs with no per-job fees.
A few roles that we’re excited about from the past week:
Presence is hiring a remote Senior Product Manager to build the scheduling and clinical workflow tools behind its 2,000+-clinician teletherapy network for K-12 special education
Lightcast is hiring a remote Principal Economist to turn its labor market data into public-facing research — a good perch from which to referee the AI-jobs debate playing out above (see Workforce above)
Code.org is hiring a remote Director of Global Strategy & Programs to lead the computer science nonprofit's international partnerships and program 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 dynamics into insights that inform decision-making. Reply to this email to learn more.
