Posted on

As edtech crowds up, Campuswire bets big on real-time learning

Campuswire was in a fortuitous spot when colleges and universities across the world shut down on short notice because of the threat of coronavirus. Founded by Tade Oyerinde in 2018, Campuswire is a virtual solution for any teacher who wants to digitize their internal classroom communications, from Q&A time to the lecture itself.

The strategy, for the most part, has worked. Campuswire is now used at more than 300 universities among 200,000 students, Oyerinde tells me.

While Campuswire’s pitch was set to boom overnight, the founder instead saw a bigger challenge approaching: more competition. As professors moved online, lectures moved to Zoom or tools built atop of Zoom. Microsoft Teams and Google Hangouts filled in the gap for classrooms that couldn’t afford fancy licenses. Campuswire’s key monetization strategy, which was selling pro licenses for its online class software, felt threatened by alternatives.

So, after months of iterating, Campuswire has adapted its monetization strategy and today announced that it is launching live courses taught by professors. Instead of solely working with professors to streamline internal class communications, Campuswire will now help teachers produce classes that students can then take for a fee. The tuition revenue will be split between the teacher and Campuswire.

Campuswire courses kick off with an angel investing class taught by Charles Hudson, the founder and general partner of Precursor Ventures. Hudson lectures at Stanford occasionally, and working with Campuswire allows him to teach a broader set of students.

Meanwhile, Campuswire software will be free to use starting in January 2021.

The move marks Campuswire’s further dive into synchronous learning. Campuswire’s model is built on how existing classrooms work in universities and colleges. Classes on Campuswire are capped at 500 to promote conversation, and large lectures are supplemented with teacher assistant (TA) classes to hammer home confusing concepts.

Meanwhile, it’s clear amid the pandemic that asynchronous learning has its perks (students can learn on their own schedule, while educators are able to work more flexible hours). Still, Oyerinde thinks a pre-recorded format is not effective for pedagogy purposes.

“This is kind of the hill we’re going to die on,” he said. “Real, lasting learning has to be synchronous for the majority of people.”

In other words, while there’s a small group of gifted-and-talented students who can watch a one-hour lecture and absorb every factoid and nuance, the majority of students need engagement, interaction and motivation to understand a topic, he argues. It’s the reason why MOOCs, or massive open online course providers, only have a 2-3% completion rate on their courses, he argues.

At its core, Campuswire has evolved from a platform trying to compete with Zoom to a platform that is trying to compete with these MOOCS through engaging content taught by experienced professors. Its main differentiation from MOOCs is that it’s live and has teacher assistants.

There are a number of startups that are trying to create engaging, celebrity professor-taught classes through hybrid plays. MasterClass, which just raised $100 million a few months ago, sells entertainment and education in one go, offering cooking classes from Gordon Ramsay and tennis lessons from Serena Williams. While you can’t interact with Ramsay or Williams, you can chat with fellow classmates.

BookClub connects readers to the authors they are reading, giving bookworms an opportunity to ask about cliffhangers and character development. The upstart is still in its early stages, but founder David Blake says that readers could talk directly to authors down the road. There’s also Teachable, which got acquired by Hotmart earlier this year. Teachable helps any expert who wants to create a business around their expertise do so with a virtual course. Arlan Hamilton, a seed-stage investor, has a course on the platform.

Today’s pivot signals the founder’s mindset that, in order to grow to the billion-dollar business mark in edtech, you need to sell more than software that Google and Microsoft will always give away for free.

“Online learning can be 100 times bigger than it is today,” Oyerinde said. “Once you actually support synchronicity, you actually support people getting to actually interact with UCLA/Princeton/Cornell professors, not just watching them on pre-recorded videos.”

Read More

Posted on

Udacity raises $75M in debt, says its tech education business is profitable after enterprise pivot

Online education tools continue to see a surge of interest boosted by major changes in work and learning practices in the midst of a global health pandemic. And today, one of the early pioneers of the medium is announcing some funding as it tips into profitability on the back of a pivot to enterprise services, targeting businesses and governments who are looking to upskill workers to give them tech expertise more relevant to modern demands.

Udacity, which provides online courses and popularized the concept of “Nanodegrees” in tech-related subjects like artificial intelligence, programming, autonomous driving and cloud computing, has secured $75 million in the form of a debt facility. The funding will be used to continue investing in its platform to target more business customers.

Udacity said that part of the business is growing fast, with Q3 bookings up by 120% year-over-year and average run rates up 260% in H1 2020.

Udacity said that customers in the segment include “five of the world’s top seven aerospace companies, three of the Big Four professional services firms, the world’s leading pharmaceutical company, Egypt’s Information Technology Industry Development Agency, and three of the four branches of the United States Department of Defense”, which work with Udacity to build tailor-made courses for their specific needs, as well as use off-the-shelf content from its catalogue.

Udacity also works with companies to build programs as part of their CSR remits, and with tech companies like Microsoft to build programs to get more developers using their tools.

“We’re seeing tremendous demand on the enterprise and government side,” said Gabe Dalporto, Udacity’s CEO who joined the company in 2019. “But to date it’s mostly been inbound, with enterprises, Fortune 500 companies and government organizations coming in and wanting to work with us. Now it’s time to build out a sales team to go after them.”

The news today is a welcome turn of events for a company that has been in the spotlight over the years for less rosy reasons, partly because it found it challenging to land on a profitable business model.

Founded nearly a decade ago by three robotics specialists including Sebastian Thrun, the Stanford professor who at the time was instrumental in building and running Google’s self-driving car and larger moonshot programs, Udacity initially saw an opportunity to partner with colleges and universities to build online tech courses (Thrun’s academic standing, and the vogue for MOOCs, were possibly two fillips for that strategy).

After that proved to be too challenging and costly, Udacity pivoted to positioning itself as a vocational learning provider targeting adults, specifically those who didn’t have the hours or money to embark on full-time courses but wanted to learn tech skills that could help them land better jobs.

That resulted in some substantial user growth, but still no profit. Eventually, the company faced multiple rounds of layoffs as it restructured and gravitated closer to its current form.

Currently, the company still provides direct-to-consumer (direct-to-learner?) courses, but it won’t be long, Dalporto said, before enterprise and government customers account for about 80% of the company’s business.

Previously, Udacity had raised nearly $170 million from a pretty illustrious group of investors that include Andreessen Horowitz, Ballie Gifford, CRV, Emerson Collective and more. This latest tranche is coming in the form of a debt facility from a single company, Hercules Capital.

Dalporto said the decision to take the debt route came after initially getting a number of term sheets for an equity round.

“We had multiple term sheets on the equity side, but then we received an unsolicited debt term sheet,” he said. That led to the company modelling out the cost of capital and dilution, he said, and “it turned out it was the better option.” For now, he added, equity was “off the table” but it may consider revisiting the idea en route to a public listing. “For the foreseeable future, we are cash flow positive so there is no compelling reason right now, but we might do something closer to an IPO.”

Being a debt facility, this funding does not mean a revisiting of Udacity’s valuation. The company was last capitalized five years ago at $1 billion, but Dalporto would not comment on how that had changed in the (uncompleted) equity term sheets it had received.

Education is in session

The interest Udacity is seeing — both from investors and as a company — is part of the bigger spotlight that online education companies have had in the last year. In K-12 and university education, the focus has been on building better technology and content to help students stay engaged and continue learning even when they cannot be in their normal physical classrooms as schools, districts, governments and public health officials implement social distancing to slow the spread of COVID-19.

But that’s not the only classroom where online education is getting called on. In the world of business, organizations that have also gone remote because of the pandemic are facing a matrix of challenges. How can they keep employees productive and feeling like part of a team when they no longer work next to each other? How do they make sure their workforces have the skills they need to work in the new environment? How do they make sure their own businesses are equipped with the right technology, and the expertise of people to run it, for this latest and future iterations of “work”? And how can governments make sure their economies don’t fall off a cliff as a result of the pandemic?

Online education has been seen as something of a panacea for all of these questions, and that has spelled a lot of opportunity for tech companies building online learning tools and other infrastructure — with others including the likes of Coursera, LinkedIn, Pluralsight, Treehouse and Springboard in the area of tech-related courses and learning platforms for workers.

As with other market segments like e-commerce, this isn’t about a trend emerging out of the blue, but about it accelerating much faster than people projected it would.

“Given Udacity’s growth, focus on sustainable business practices, and expanding reach across multiple industries, we are excited to provide this investment. We look forward to working with the company to help them sustain their impressive global growth, and continued innovation in upskilling and reskilling,” said Steve Kuo, Senior MD and Technology Group Head at Hercules Capital, in a statement.

In the areas of enterprise and government, Dalporto described a number of scenarios where Udacity is already active, which are natural progressions of the kind of vocational learning it was already offering.

They include, for example, the energy company Shell retraining structural and geological engineers “who had good math skills but no machine learning expertise” to be able to work in data science, needed as the company builds more automation into its operation and moves into new kinds of energy technology.

And he said that Egypt and other nations — looking to the success that India has had — have been providing technology expertise training to residents to help them find jobs in the “outsourcing economy.” He said that the program in Egypt has seen an 80% graduation rate and 70% “positive outcomes” (resulting in jobs).

“If you take just AI and machine learning, demand for these skills is growing at a rate of 70% year-over-year, but there is a shortage of talent to fill those roles,” Dalporto said.

Udacity is for now not looking at any acquisitions, he added, for another 6-12 months. “We have so much demand and work to do internally that there is no compelling reason to do that. At some point we will look at that but it needs to be linked to our strategy.”

Read More

Posted on

Teachers are leaving schools. Will they come to startups next?

It wasn’t the lingering exhaustion that made Christine Huang, a New York public school teacher, leave the profession. Or the low pay. Or the fact that she rarely had time to spend with her kids after the school day due to workload demands.

Instead, Huang left teaching after seven years because of how New York City handled the coronavirus pandemic in schools.

“Honestly, I have no confidence in the city,” she says. Tensions between educators and NYC officials grew over the past few weeks, as school openings were delayed twice and staffing shortages continue. In late September, the union representing NYC’s principals called on the state to take control of the situation, slamming Mayor de Blasio for his inability to offer clear guidance.

Now, schools are open and the number of positive coronavirus cases are surprisingly low. Still, Huang says there’s a lack of grace given to teachers in this time.

Huang wanted the flexibility to work from home to take care of her kids who could no longer get daycare. But her school said that, while kids have the choice on whether or not to come into class, teachers do not. She gave her notice days later.

There are more than 3 million public school teachers in the United States. Over the years, thousands have left the system due to low pay and rigid hours. But the coronavirus is a different kind of stress test. As schools seesaw between open and closed, some teachers are left without direction, feeling undervalued and underutilized. The confusion could usher numbers of other teachers out of the field, and massively change the teacher economy as we know it.

Teacher departures are a loss for public schools, but an opportunity for startups racing to win a share of the changing teacher economy. Companies don’t have the same pressures as entire school districts, and thus are able to give teachers a way to teach on more flexible hours. As for salaries, edtech benefits from going directly to consumers, making money less of a budget challenge and more of a sell to parents’ wallets.

There’s Outschool, which allows teachers to lead small-group classes on subjects such as algebra, beginner reading or even mindfulness for kids; Varsity Tutor, which connects educators to K-12 students in need of extra help; and companies such as Swing and Prisma that focus on pod-based learning taught by teachers.

The startups all have different versions of the same pitch: they can offer teachers more money, and flexibility, than the status quo.

Underpaid and overworked teachers

There’s a large geographic discrepancy in pay among teachers. Salaries are decided on a state-by-state and district-by-district level. According to the National Center for Education Statistics, a teacher who works in Mississippi makes an average of $45,574 annually, while a teacher in New York makes an average of $82,282 annually.

Although cost of living factors impacts teacher salaries like any other profession, data shows that teachers are underpaid as a profession. According to a study from the Economic Policy Institute, teachers earn 19% less than similarly skilled and educated professionals. A 2018 study by the Department of Education shows that full-time public school teachers are earning less on average, in inflation-adjusted dollars, than they earned in 1990.

The variance of salaries among teachers means that there’s room, and a need, for rebalancing. Startups, looking to get a slice of the teacher economy, suddenly can form an entire pitch around these discrepancies. What if a company can help a Mississippi teacher make a wage similar to a New York teacher?

Image: Bryce Durbin / TechCrunch

Reach Capital is a venture capital firm whose partners invest in education technology companies. Jennifer Carolan, co-founder of the firm, who also worked in the Chicago Public School system for years, sees coronavirus as an accelerator, not a trigger, for the departure of teachers.

“We have an education system where teachers are underpaid, overworked, and you don’t have the flexibility that has become so important for workers now,” she said. “All these things have caused teachers to seek opportunity outside of the traditional schooling system.”

Carolan, who penned an op-ed about teachers leaving the public school system, says that new pathways for teachers are emerging out of the homeschooling tech sector. One of her investments, Outschool, has helped teachers earn tens of millions this year alone, as the total addressable market for what it means to be “homeschooled” changed overnight.

Gig economy powered by startups

Education technology services have created a teacher gig economy over the past few years. Learning platforms, with unprecedented demand, must attract teachers to their service with one of two deal sweeteners: higher wages or more flexible hours.

Outschool is a platform that sells small-group classes led by teachers on a large expanse of topics, from Taylor Swift Spanish class to engineering lessons through Lego challenges. In the past year, teachers on Outschool have made more than $40 million in aggregate, up from $4 million in total earnings the year prior.

CEO Amir Nathoo estimates that teachers are able to make between $40 to $60 per hour, up from an average of $30 per hour in earnings in traditional public schools. Outschool itself has surged over 2,000% in new bookings, and recently turned its first profit.

Outschool makes more money if teachers join the platform full-time: teachers pocket 70% of the price they set for classes, while Outschool gets the other 30% of income. But, Nathoo views the platform as more of a supplement to traditional education. Instead of scaling revenue by convincing teachers to come on full-time, the CEO is growing by adding more part-time teachers to the platform.

The company has added 10,000 vetted teachers to its platform, up from 1,000 in March.

Outschool competitor Varsity Tutors is taking a different approach entirely, focusing less on hyperscaling its teacher base and more on slow, gradual growth. In August, Varsity Tutors launched a homeschooling offering meant to replace traditional school. It onboarded 120 full-time educators, who came from public schools and charter schools, with competitive salaries. It has no specific plans to hire more full-time teachers.

Brian Galvin, chief academic officer at Varsity Tutors, said that teachers came seeking more flexibility in hours. On the platform, teachers instruct for five to six hours per day, in blocks that they choose, and can build schedules around caregiver obligations or other jobs.

Varsity Tutors’ strategy is one version of pod-based learning, which gained traction a few months ago as an alternative to traditional schooling. Swing Education, a startup that used to help schools hire substitute teachers, pivoted to help connect those same teachers to full-time pod gigs. Prisma is another alternative school that trains former educators, from public and private schools, to become learning coaches.

Pod-based learning, which can in some cases cost thousands a week, was popular among wealthy families and even led to bidding wars for best teacher talent. It also was met with criticism, suggesting the product wasn’t built with most students in mind.

The reality of next job

A tech-savvy future where students can learn through the touch of a button, and where teachers can rack in higher earnings, is edtech’s goal. But that path is not accessible for all.

Some tutoring startups could create a digital divide among students who can pay for software and those who can’t. If teachers leave public schools, low-income students are left behind and high-income students are able to pay their way into supplemental learning.

Still, some don’t think it’s the job of public school teachers, the vast majority of which are female, to work for a broken system. In fact, some say that the whole concept of villainizing public school teachers for leaving the system comes with ingrained sexism that women have to settle for less. In this framework, startups are both a bridge to a better future for teachers and a symptom of failures from the public educational systems.

Huang, now on the job hunt, says that the opportunities that edtech companies are creating aren’t built for traditional teachers, even though they’re billed as such. So far, she has applied to curriculum design jobs at educational content website BrainPop, digital learning platform Newsela, math program company Zearn and Q&A content host Mystery.org.

“What I’m finding is that a lot of edtech companies don’t seem to value our skills as teachers,” she said. “They’re not looking for teachers, they’re looking for coders.”

Edtech has been forced to meet increasing demand for services in a relatively short time. But the scalability could inherently clash with what teachers came to the profession to do. Suddenly, their work becomes optimized for venture-scale returns, not general education. Huang feels the tension in her job interviews, where she feels like recruiters don’t pay attention to creativity, knowledge and human skills needed for managing students. She has created 30 different versions of her resume.

The lack of suitable jobs made Huang decide to go on childcare leave instead of quitting the education system entirely, in case she needs to return to the traditional field. She hopes that is not the case, but isn’t optimistic just yet.

“I haven’t gotten a whole lot of interviews, because people see my resume; they see that I’m a teacher, and they automatically write me off,” she said.

Image Credits: Bryce Durbin (opens in a new window)

Read More

Posted on

The No-Code Generation is arriving

In the distant past, there was a proverbial “digital divide” that bifurcated workers into those who knew how to use computers and those who didn’t.[1] Young Gen Xers and their later millennial companions grew up with Power Macs and Wintel boxes, and that experience made them native users on how to make these technologies do productive work. Older generations were going to be wiped out by younger workers who were more adaptable to the needs of the modern digital economy, upending our routine notion that professional experience equals value.

Of course, that was just a narrative. Facility with using computers was determined by the ability to turn it on and login, a bar so low that it can be shocking to the modern reader to think that a “divide” existed at all. Software engineering, computer science, and statistics remained quite unpopular compared to other academic programs, even in universities, let alone in primary through secondary schools. Most Gen Xers and millennials never learned to code, or frankly, even to make a pivot table or calculate basic statistical averages.

There’s a sociological change underway though, and it’s going to make the first divide look quaint in hindsight.

Over the past two or so years, we have seen the rise of a whole class of software that has been broadly (and quite inaccurately) dubbed “no-code platforms.” These tools are designed to make it much easier for users to harness the power of computing in their daily work. That could be everything from calculating the most successful digital ad campaigns given some sort of objective function, or perhaps integrating a computer vision library into a workflow that calculates the number of people entering or exiting a building.

The success and notoriety of these tools comes from the feeling that they grant superpowers to their users. Projects that once took a team of engineers some hours to build can now be stitched together in a couple of clicks through a user interface. That’s why young startups like Retool can raise at nearly a $1 billion and Airtable at $2.6 billion, while others like Bildr, Shogun, Bubble, Stacker, and dozens more are getting traction among users.

Of course, no-code tools often require code, or at least, the sort of deductive logic that is intrinsic to coding. You have to know how to design a pivot table, or understand what a machine learning capability is and what might it be useful for. You have to think in terms of data, and about inputs, transformations, and outputs.

The key here is that no-code tools aren’t successful just because they are easier to use — they are successful because they are connecting with a new generation who understands precisely the sort of logic required by these platforms to function. Today’s students don’t just see their computers and mobile devices as consumption screens and have the ability to turn them on. They are widely using them as tools of self-expression, research and analysis.

Take the popularity of platforms like Roblox and Minecraft. Easily derided as just a generation’s obsession with gaming, both platforms teach kids how to build entire worlds using their devices. Even better, as kids push the frontiers of the toolsets offered by these games, they are inspired to build their own tools. There has been a proliferation of guides and online communities to teach kids how to build their own games and plugins for these platforms (Lua has never been so popular).

These aren’t tiny changes. 150 million play Roblox games across 40 million user-created experiences, and the platform has nearly 350,000 developers. Minecraft for its part has more than 130 million active users. These are generation-defining experiences for young people today.

That excitement to harness computers is also showing up in educational data. Advanced Placement tests for Computer Science have grown from around 20,000 in 2010 to more than 70,000 this year according to the College Board, which administers the high school proficiency exams. That’s the largest increase among all of the organization’s dozens of tests. Meanwhile at top universities, computer science has emerged as the top or among the top majors, pulling in hundreds of new students per campus per year.

The specialized, almost arcane knowledge of data analysis and engineering is being widely democratized for this new generation, and that’s precisely where a new digital divide is emerging.

In business today, it’s not enough to just open a spreadsheet and make some casual observations anymore. Today’s new workers know how to dive into systems, pipe different programs together using no-code platforms, and answer problems with much more comprehensive — and real-time — answers.

It’s honestly striking to see the difference. Whereas just a few years ago, a store manager might (and strong emphasis on might) put their sales data into Excel and then let it linger there for the occasional perusal, this new generation is prepared to connect multiple online tools together to build an online storefront (through no-code tools like Shopify or Squarespace), calculate basic LTV scores using a no-code data platform, and prioritize their best customers with marketing outreach through basic email delivery services. And it’s all reproducible, since it is in technology and code and not produced by hand.

There are two important points here. First is to note the degree of fluency these new workers have for these technologies, and just how many members of this generation seem prepared to use them. They just don’t have the fear to try new programs out, and they know they can always use search engines to find answers to problems they are having.

Second, the productivity difference between basic computer literacy and a bit more advanced expertise is profound. Even basic but accurate data analysis on a business can raise performance substantially compared to gut instinct and expired spreadsheets.

This second digital divide is only going to get more intense. Consider students today in school, who are forced by circumstance to use digital technologies in order to get their education. How many more students are going to become even more capable of using these technologies? How much more adept are they going to be at remote work? While the current educational environment is a travesty and deeply unequal, the upshot is that ever more students are going to be forced to become deeply fluent in computers.[2]

Progress in many ways is about raising the bar. This generation is raising the bar on how data is used in the workplace, in business, and in entrepreneurship. They are better than ever at bringing together various individual services and cohering them into effective experiences for their customers, readers, and users. The No-Code Generation has the potential to finally fill that missing productivity gap in the global economy, making our lives better while saving time for everyone.

[1] Probably worth pointing out that the other “digital divide” at the time was describing households who had internet access and households who did not. That’s a divide that unfortunately still plagues America and many other rich, industrialized countries.

[2] Important to note that access to computing is still an issue for many students and represents one of the most easily fixable inequalities today in America. Providing equal access to computing should be an absolute imperative.

Read More

Posted on

Brighteye Ventures sees $54M first close of its second fund to back edtech startups in Europe

Brighteye Ventures, the European edtech VC firm, is announcing the $54 million first close of its second fund, bringing total assets under management to over $112 million.

Backing comes from a mixture of existing and new investors, made up primarily of unnamed international family offices. The fund’s second close is expected to take place next year and will include additional institutional investors.

Founded in 2017, Brighteye describes itself as a thesis-driven fund investing in startups that enhance learning. Unsurprisingly, the VC says it sees an unprecedented opportunity within the $7 trillion global education sector “as educators and students are adapting to distance learning en masse and millions of displaced workers are seeking to upskill’.

Out of this new fund, Brighteye will invest in 15-20 companies over the next three years at the seed and Series A stage and write cheques of up to $5 million.

“We invest in startups that use technology to directly enable learning, skills acquisition or research as well as companies whose products address structural needs in the education sector,” Alex Spiro Latsis, managing partner at Brighteye Ventures, tells me.

“For example, Zen Educate addresses the systemic issue of teacher supply shortages in the U.K., via an on-demand platform that saves schools money whilst allowing educators to earn more. Litigate is an AI-driven coach and workflow tool improving results for legal associates, while Ironhack, the largest tech bootcamp in Europe and Latin America, gives young professionals the skills needed to enter the innovation economy and connects them to employers with a 90% job placement rate”.

The VC’s investments also includes Ornikar, the online driving school in France and Spain serving more than 1.6 million students; Tandem, the Berlin-based peer-to-peer language learning platform with over 10 million members; and Epic!, a reading platform said to be used in more than 90% of U.S. schools.

“Sector specialisation means that our entire team is devoted to mapping, evaluating and building networks in the learning industry,” adds Spiro Latsis, when asked how Brighteye will compete for edtech deals when many generalist VCs are eyeing up the sector. “We understand what a differentiated approach looks like, can develop conviction quickly and make an offer based on that conviction. Once we invest, portfolio companies benefit from a network that includes not just potential clients and investors but also some of the best performing edtech companies in Europe.”

Meanwhile, Brighteye says it will be expanding its advisory team to support the new fund and expects to grow from three members to 10 within the next 12 months. In addition, David Guerin has been promoted to principal to manage deal making and portfolio support in Paris, and the firm expects to open a DACH region presence by summer 2022.

Read More

Posted on

With $2.7M in fresh funding, Sora hopes to bring virtual high school to the mainstream

Long before the coronavirus, Sora, a startup run by a team of Atlanta entrepreneurs, was toying with the idea of live, virtual high school. The program would focus on student autonomy and organize its curriculum around projects that learners wanted to work on, such as finding ways to reduce the impact of climate change on the world. Students and teachers would use Zoom and Slack to communicate with each other, with standups everyday to pulse-check progress.

The pandemic has both undermined and underscored Sora’s focus. On one end, the millions of students that flocked home have shown how hard it is to effectively and accessibly teach in virtual settings. On the other end, the pandemic isn’t going away any time soon. Parents and students are desperate for better options.

Sora co-founder Garrett Smiley thinks he can convince parents to approach virtual high school with optimism, their kids and their checkbooks. It all starts with green algae farms.

Smiley said students turn to Sora so they can “start running instead of walking” in their education. He added how the first students in the program spent time building algae farms in their backyards, working with SpaceX engineers and taking college-level math classes upon entrance.

Smiley, who co-founded the company with Indra Sofian and Wesley Samples, says that Sora sells best to students who feel stifled or “held back” from traditional educational institutions. Sora’s product, thus, feels more apt for educationally gifted students than students who might need extra help or support.

At Sora’s heart, it is a private school replacement with a project-based curriculum. How it works beyond that is a little bit more confusing to comprehend. Firstly, students upon enrollment embark on two-week learning expeditions, exploring the answers to broad questions like “how do we recreate an alien species.” As time progresses, students are prompted to create their own projects with check-in calls twice a day. Below is an example of a standup:

[embedded content]

Beyond the self-directed study, Sora offers a series of Socratic seminars and workshops.

There’s no such thing as science class, but there are workshops such as “the Physics of Sharks.” Here’s an example schedule of a Sora student:

Image Credits: Sora

The organization is unconventional. Smiley is insistent on the fact that students complete core subjects and standards needed for high school transcript and graduation, including math, science, English and history. Students are also required to take the SAT or ACT, with practice resources provided by the school.

Sora also has an in-person, optional element. Cohorts will be designed by geography. Students are encouraged to meet up with each other outside of school, form sports teams and attend a Sora-sponsored meet-up.

Outside of learning, Sora created a network of more than 50 career mentors and has a suite of services, such as SAT prep and counselors to aid with the college admissions process.

Smiley says that Sora hasn’t yet graduated a class, so they do not have data on most common exit paths, but he added that the company does not promote college as the only option for students.

Sora is working on partnering with the “next generation of college and university replacements,” he says, such as boot camps or internships.

The goal of Sora is to create a community of self-directed and motivated learners.

“We don’t believe schools are in the business of content creation anymore, just typing in Google search engine search specifically you’ll probably find world-class resources to learn a subject,” Smiley said. “So for us, as to be a super successful school, we knew our role was creating this super high-quality community.”

The company had seven students in its inaugural class last year. Now, more than 39 students participate in Sora School, with three-full time faculty. Monthly tuition ranges from $300 to $800 per student.

Tuition is charged in relation to parent income by using a sliding scale, which Smiley says is part of their strategy in making sure Sora is an inclusive and diverse school.

The diversity breakdown of Sora is 67% white, 15% Hispanic, 13% African American and 5% Asian/Middle Eastern. The gender split male to female is 54% and 44%, respectively, with 2% of students identifying as non-binary.

From a mental diversity perspective, Sora lacks key resources needed to support students with special needs. Virtual high school as a product isn’t built for adoption en masse, but instead works best for students who can afford to partake in self-directed and independent learning. Similar to pandemic pods, it could exacerbate the widening inequalities between wealthy and low-income students.

Smiley says that they “definitely thought about” accessibility and are working on it. Still, he says that Sora is created for “students who perhaps don’t need the extreme structure of an in-person school,” which he estimates to be 95% of the world’s learners.

As Sora scales, a key aspect of its success will be if it is able to balance its hands-on, hands-off approach. The startup announced this week that it has raised a $2.7 million round, led by Union Square Ventures, to bring on more faculty, software engineers for back-end support and managers to work on curriculum development. Other participating investors in the round include Village Global, ReThink Education, Firebolt Ventures, Peak State Ventures, Contrary Capital and angel investor Taylor Greene.

Read More

Posted on

Forage, formerly InsideSherpa, raises $9.3 million Series A for virtual work experiences

Tech’s coveted internships were some of the first roles to be cut as offices closed and businesses shuttered in response to the coronavirus. A number of companies across the country, including Glassdoor, StubHub, Funding Circle, Yelp, Checkr and even the National Institutes of Health, canceled their internship programs altogether.

For InsideSherpa co-founders Tom Brunskill and Pasha Rayan, the canceled internships were an opportunity. InsideSherpa, a Y Combinator graduate, hosts virtual work experience programs for college students all around the world.

College students, searching for a way to get job-ready, flocked to the platform from Northern Italy to South-East Asia, to all over the United States. Enrollments in InsideSherpa grew more than 86%, up to 1 million students.

The educational service successfully attracted student interest, and now, has landed investor interest. Today, InsideSherpa announced that it raised $9.3 million in Series A funding, led by Lightspeed Venture Partners . The startup has now raised $11.6 million in known venture funding. Other investors include FundersClub, Y Combinator and Arizona State University.

The financing will be used to grow InsideSherpa’s staff, with more engineering, product and sales roles. Along with the financing, InsideSherpa announced that it has rebranded to Forage.

Forage isn’t selling an internship replacement, but instead comes in one degree before the recruitment process. Students can go to the website and take a course from large companies such as Deloittee, Citi, BCG and GE. The course, designed in collaboration with the particular company and Forage, gives students a chance to “explore what a career would look like at their firm before the internship or entry-level application process opens,” Brunskill explains.

Forage is focused on partnering with large companies that employ upwards of 1,000 students per year via internships to help open up new pipelines. The corporate partners pay a subscription fee per year to post courses, and students can access all courses for free.

Popular courses include the KPMG Data Analytics Program, JPMorgan Chase & Co. Software Engineering Program and the Microsoft Engineering Program.

While Forage declined to disclose ARR, it confirmed that it was profitable heading into its fundraise, which formally closed in July.

Within edtech, flocks of companies have tried (and failed) to deliver on the promise of skills-based learning and employment opportunities as an outcome. The strategy of getting cozy with corporate partners isn’t unique to Forage, but the team views it as a competitive advantage. Of course, the effectiveness of that strategy matters more than the fact that it exists in the first place. Forage did not disclose efficacy information, but said that “some” corporate partners hired up to 52% of the cohort from their programs.

When Brunskill and Rayan first started Forage in 2017, they imagined a mentoring marketplace to connect students to young professionals. Three years later, much has changed.

“While students were interested in the product, they weren’t using it the way we intended,” he said. “Students kept saying to us ‘we just want an internship at company X, can you get me one?’ ”

While Brunskill doesn’t believe there’s any silver bullet solution to fixing education or recruitment systems, he remains optimistic in Forage’s future. After all, even if democratizing access to skills is the first step in a bigger race, it’s not an easy one.

Read More

Posted on

Extra Crunch Friday roundup: Edtech funding surges, Poland VC survey, inside Shift’s SPAC plan, more

I live in San Francisco, but I work an East Coast schedule to get a jump on the news day. So I’d already been at my desk for a couple of hours on Wednesday morning when I looked up and saw this:

As unsettling as it was to see the natural environment so transformed, I still got my work done. This is not to boast: I have a desk job and a working air filter. (People who make deliveries in the toxic air or are homeschooling their children while working from home during a global pandemic, however, impress the hell out of me.)

Not coincidentally, two of the Extra Crunch stories that ran since our Tuesday newsletter tie directly into what’s going on outside my window:

As this guest post predicted, a suboptimal attempt I made to track a delayed package using interactive voice response (IVR) indeed poisoned my customer experience, and;

Sheltering in place to avoid the novel coronavirus — and wildfire smoke — is fueling growth in the video-game industry, perhaps one factor in Unity Software Inc.’s plan to go public ahead of competitor Epic Games. In a two-part series, we looked at how the company has expanded beyond games and shared a detailed financial breakdown.

We covered a lot of ground this week, so scroll down or visit the recently redesigned Extra Crunch home page. If you’d like to receive this roundup via email each Tuesday and Friday, please click here.

Thanks very much for reading Extra Crunch; I hope you have a relaxing and safe weekend.

Walter Thompson
Senior Editor
@yourprotagonist


In a two-part series that ran on TechCrunch and Extra Crunch, former media columnist Eric Peckham returned to share his analysis of Unity Software Inc.’s S-1 filing.

Part one is a deep dive that explains how the company has grown beyond gaming to develop multiple revenue streams and where it’s headed.

For part two on Extra Crunch, he studied the company’s numbers to offer some context for its approximately $11 billion valuation.


Image Credits: Edwin Remsberg (opens in a new window) / Getty Images

As we’ve covered previously, the COVID-19 pandemic is making the world a lot smaller.

Investors who focus on their own backyards still have an advantage, but the ability to set up a quick coffee meeting with a promising investor is no longer one of them.

Even though some VCs are cutting first checks after Zoom calls, regional investors’ personal networks are still a trump card. Tourists will always rely on guide books, however, which is why we continue to survey investors around the world.

A Dealroom report issued this summer determined that 97 VC funds backed more than 1,600 funding rounds in Poland last year. With over 2,400 early- and late-stage startups and 400,000 engineers in the country, it’s easy to see why foreign investors are taking notice.

Editor-at-large Mike Butcher reached out to several investors who focus on Warsaw and Poland in general to learn more about the startups fueling their interest across fintech, gaming, security and other sectors:

  • Bryony Cooper, managing partner, Arkley Brinc VC
  • Anna Wnuk-Błażejczyk, investor relations manager, Experior.vc
  • Rafał Roszak, investment director, YouNick Mint
  • Michal Mroczkowski, partner, Market One Capital
  • Marcus Erken, partner, Sunfish Partners
  • Borys Musielak, partner, SMOK Ventures
  • Mathias Åsberg, partner, Nextgrid
  • Kuba Dudek, SpeedUp Venture Capital Group
  • Marcin Laczynski, partner, Next Road Ventures
  • Michał Rokosz, partner, Inovo Venture Partners

We’ll run the conclusion of his survey next Tuesday.


Image Credits: cnythzl (opens in a new window) / Getty Images

Even for fledgling startups, creating a robust customer service channel — or at least one that doesn’t annoy people — is a reliable way to keep users in the sales funnel.

Using AI and automation is fine, but now that consumers have grown used to asking phones and smart speakers to predict the weather and read recipe instructions, their expectations are higher than ever.

If you’re trying to figure out what people want from hyper-personalized customer experiences and how you can operationalize AI to give them what they’re after, start here.


For today’s edition of The Exchange, Natasha Mascarenhas joined Alex Wilhelm to examine how the pandemic-fueled surge of interest in edtech is manifesting on the funding front.

The numbers suggest that funding will far surpass the sector’s high-water mark set in 2018, so the duo studied the numbers through August 31, which included a number of mega-rounds that exceeded $100 million.

“Now the challenge for the sector will be keeping its growth alive in 2021, showing investors that their 2020 bets were not merely wagers made during a single, overheated year,” they conclude.


Image Credits: WhataWin (opens in a new window) / Getty Images

The odds are low that someone’s going to enter my home and steal my belongings. I still lock my door when I leave the house, however, and my valuables are insured. I’m an optimist, not a fool.

Similarly: Is your startup’s cybersecurity strategy based on optimism, or do you have an actual response plan in case of a data breach?

Security reporter Zack Whittaker has seen some shambolic reactions to security lapses, which is why he turned in a post-mortem about a corporation that got it right.

“Once in a while, a company’s response almost makes up for the daily deluge of hypocrisy, obfuscation and downright lies,” says Zack.


Image Credits: Eric Burger/EyeEm (opens in a new window) / Getty Images

There’s a lot of buzz about special purpose acquisition companies these days.

Used-car marketplace Shift announced its SPAC in June 2020, and is on track to complete the process in the next few months, so co-founder/co-CEO George Arison wrote an Extra Crunch guest post to share what he has learned.

Step one: “If you go the SPAC route, you’ll need to become an expert at financial engineering.”


Image Credits: Sophie Alcorn

Dear Sophie:

I am a software engineer and have been looking at job postings in the U.S. I’ve heard from my friends about J-1 Visa Training or J-1 Research.

What is a J-1 status? What are the requirements to qualify? Do I need to find a U.S. employer willing to sponsor me before I apply for one? Can I get a visa? How long could I stay?

— Determined in Delhi


While we count down to the September 23 premiere of NYSE: PLTR, Danny Crichton looked at the “robust secondary market” that has allowed some investors to acquire shares early.

“Given the number of people involved and the number of shares bought and sold over the past 18 months, we can get some insight regarding how insiders perceive Palantir’s value,” he writes.


Image Credits: JakeOlimb / Getty Images

Zack Whittaker interviewed Bugcrowd CTO, founder and chairman Casey Ellis about the best practices he recommends for creating a startup culture that takes security seriously.

“It’s an everyone problem,” said Ellis, who encouraged founders to promote the notion of “productive paranoia.”

Now that the threat envelope includes everyone from marketing to engineering, employees need to “internalize the fact that bad stuff can and does happen if you do it wrong,” Ellis said.

Read More

Posted on

Voice assistants don’t work for kids: The problem with speech recognition in the classroom

Before the pandemic, more than 40% of new internet users were children. Estimates now suggest that children’s screen time has surged by 60% or more with children 12 and under spending upward of five hours per day on screens (with all of the associated benefits and perils).

Although it’s easy to marvel at the technological prowess of digital natives, educators (and parents) are painfully aware that young “remote learners” often struggle to navigate the keyboards, menus and interfaces required to make good on the promise of education technology.

Against that backdrop, voice-enabled digital assistants hold out hope of a more frictionless interaction with technology. But while kids are fond of asking Alexa or Siri to beatbox, tell jokes or make animal sounds, parents and teachers know that these systems have trouble comprehending their youngest users once they deviate from predictable requests.

The challenge stems from the fact that the speech recognition software that powers popular voice assistants like Alexa, Siri and Google was never designed for use with children, whose voices, language and behavior are far more complex than that of adults.

It is not just that kid’s voices are squeakier, their vocal tracts are thinner and shorter, their vocal folds smaller and their larynx has not yet fully developed. This results in very different speech patterns than that of an older child or an adult.

From the graphic below it is easy to see that simply changing the pitch of adult voices used to train speech recognition fails to reproduce the complexity of information required to comprehend a child’s speech. Children’s language structures and patterns vary greatly. They make leaps in syntax, pronunciation and grammar that need to be taken into account by the natural language processing component of speech recognition systems. That complexity is compounded by interspeaker variability among children at a wide range of different developmental stages that need not be accounted for with adult speech.

Changing the pitch of adult voices used to train speech recognition fails to reproduce the complexity of information required to comprehend a child’s speech. Image Credits: SoapBox Labs

[embedded content]

A child’s speech behavior is not just more variable than adults, it is wildly erratic. Children over-enunciate words, elongate certain syllables, punctuate each word as they think aloud or skip some words entirely. Their speech patterns are not beholden to common cadences familiar to systems built for adult users. As adults, we have learned how to best interact with these devices, how to elicit the best response. We straighten ourselves up, we formulate the request in our heads, modify it based on learned behavior and we speak our requests out loud, inhale a deep breath … “Alexa … ” Kids simply blurt out their unthought out requests as if Siri or Alexa were human, and more often than not get an erroneous or canned response.

In an educational setting, these challenges are exacerbated by the fact that speech recognition must grapple with not just ambient noise and the unpredictability of the classroom, but changes in a child’s speech throughout the year, and the multiplicity of accents and dialects in a typical elementary school. Physical, language and behavioral differences between kids and adults also increase dramatically the younger the child. That means that young learners, who stand to benefit most from speech recognition, are the most difficult for developers to build for.

To account for and understand the highly varied quirks of children’s language requires speech recognition systems built to intentionally learn from the ways kids speak. Children’s speech cannot be treated simply as just another accent or dialect for speech recognition to accommodate; it’s fundamentally and practically different, and it changes as children grow and develop physically as well as in language skills.

Unlike most consumer contexts, accuracy has profound implications for children. A system that tells a kid they are wrong when they are right (false negative) damages their confidence; that tells them they are right when they are wrong (false positive) risks socioemotional (and psychometric) harm. In an entertainment setting, in apps, gaming, robotics and smart toys, these false negatives or positives lead to frustrating experiences. In schools, errors, misunderstanding or canned responses can have far more profound educational — and equity — implications.

Well-documented bias in speech recognition can, for example, have pernicious effects with children. It is not acceptable for a product to work with poorer accuracy — delivering false positives and negatives — for kids of a certain demographic or socioeconomic background. A growing body of research suggests that voice can be an extremely valuable interface for kids but we cannot allow or ignore the potential for it to magnify already endemic biases and inequities in our schools.

Speech recognition has the potential to be a powerful tool for kids at home and in the classroom. It can fill critical gaps in supporting children through the stages of literacy and language learning, helping kids better understand — and be understood by — the world around them. It can pave the way for a new era of  “invisible” observational measures that work reliably, even in a remote setting. But most of today’s speech recognition tools are ill-suited to this goal. The technologies found in Siri, Alexa and other voice assistants have a job to do — to understand adults who speak clearly and predictably — and, for the most part, they do that job well. If speech recognition is to work for kids, it has to be modeled for, and respond to, their unique voices, language and behaviors.

Read More

Posted on

Course Hero, a profitable edtech unicorn, raises rare cash

Like any successful founder, Andrew Grauer had bright, long-term ambitions for Course Hero from the moment he launched it in 2006.

He started the business to create a place where students could ask questions and get answers similar to Chegg, which launched 15 months before Course Hero . But as he slowly built it, he was tempted by a larger question: “What would a university look like if it was built by the internet?”

And so, the Redwood City-based startup itched at that nebulous goal throughout the years. Course Hero tested and failed products: free curated e-courses, in-person tutoring and teacher advice and ratings.

Clarity only came when Grauer realized that the core goal Course Hero launched with — giving students a place to ask and answer questions — wasn’t simply one product that should be fit into a broader suite of services. Instead, it was a thesis around which to build products. So, the startup began looking for different ways and formats to organize knowledge and questions and answers.

“That was a breakthrough insight,” Grauer said. The startup stopped launching other business verticals and decided to stick to Q&A as its core — and only — business. It sells Netflix-like subscriptions to students looking for access to learning and teaching content. Teachers and publishers can put course-specific study content on the platform.

Image Credits: Getty Images/manopjk

In 2020, Course Hero is a profitable business with annual run revenue upward of $100 million.

Today, Course Hero tells TechCrunch that it has raised a new tranche of capital in a Series B extension round of $70 million. The round is now totaling $80 million, bringing Course Hero’s total known venture capital to date to $95 million.

Its $80 million Series B round is one of the largest U.S. funding deals of 2020, and brings Course Hero’s valuation to $1.1 billion.

From a high level, the new raise is not surprising. Other edtech companies have also recently added on more capital to their balance sheets to meet remote learning demand amid the coronavirus pandemic.

But in Course Hero’s case, the new capital comes as a stark contrast to how the business functioned before 2020. After launching, the startup waited eight years to raise a $15 million Series A. Now, after going another nearly six years without raising venture capital, Course Hero has closed two rounds in this year alone.

Grauer tells TechCrunch that the capital will be used for operations, product innovation and feature development. It also plans to use the capital for future acquisitions (in 2012, Course Hero bought an in-person tutoring business).

Course Hero’s change of heart with venture capital boils down to the company meeting new scale demands. Last year, it passed 1 million subscribers on the platform. Now, it is eyeing “many millions” of students, the co-founder says.

Paraphrasing Bill Gates, Grauer said, “We do overestimate what we can do in just three years. And we dramatically underestimate what we can do closer to 10 years.”

Any edtech company that raises money off of current momentum in remote education will have to face the reality of what it is like to grow when remote learning is no longer a necessity. In other words, when the coronavirus pandemic ends, will these same platforms still find surges in usage?

“That’s the risk and reward of raising capital,” Grauer said. He added that “if you raise too much money early on, you can get misaligned expectations based on different time horizons set up by different terms of incoming shareholders or investors.”

Course Hero sees tailwinds in a dynamic that has been brewing since before the pandemic and will likely grow during and after: the growth of “nontraditional students” enrolling in and participating in higher education. Grauer noted that more than 40% of students work 30 hours or more per week. Over a quarter of students are parents, and of that quarter, over 70% are single moms.

“Because that’s the reality, and because we can make an affordable subscription and the economics can work, Course Hero is aligned to serving the majority, the real majority, and that’s the beauty of opportunity,” he said. There is a freemium model, but on an annual plan, a subscription costs $9.95 per month. On a monthly plan, a subscription costs $39.99 per month.

It’s not an opportunity the company hopes to expand into, it’s a reality of its diverse customer base. An internal data analytics survey of Course Hero shows that 58% of students that subscribe work at least part time. Over 25% of subscribers are 35 years old or older, and 22% of subscribers are parents.

Looking ahead, Course Hero hopes to continue to broaden its multisided marketplace.

In July, the business announced it is launching Educator Exchange, which allows college faculty to make money by uploading study materials for fellow teachers or students.

The “direct-to-faculty” relationship could pacify earlier tensions between the platform and teachers by giving the latter a way to monetize on how Course Hero “open sources” creative content on the point of copyright infringement.

Grauer compares Course Hero’s long-term vision to that of Google Maps, in that the platform can make recommendations of content based on other people’s usage.

But we’re not talking recommendations for the closest gas station. Based on how a user learns, Course Hero can recommend a specific professor who has a specific syllabus on a topic in which the user is interested.

“We’ve seen that specificity level differentiates us from others,” he said. “It helps students when they’re doing their real work, that one homework, that studying for one test. And I think that’s where the magic is for us.”

Read More