How Edtech is Re-Teaching Us to “Fish”
By Jackie Carmel and Sophie Kronk
They say if you give a man a fish, you feed him for a day, but if you teach a man to fish, you feed him for a lifetime. While this maxim generally holds true, it has proven inaccurate in the context of education for workforce readiness and development. If we were to rewrite this ancient proverb for the modern-day, it would go something like this: Give a man a fish, feed him for a day. Teach a man to fish, and he’ll be fed for a period of time until the rules of fishing fundamentally change, at which point he’ll probably need to get a new rod and figure things out all over again.
Many people’s proverbial rods have stopped working in the rapidly changing employment environment. The rods that worked even five years ago are no longer proving effective. For those just now entering the workforce, vocational training and ongoing education — even in the form of micro certifications — is proving increasingly important and desirable to employers, and critical for employees. And, companies providing this training are getting funded like never before.
According to HolonIQ, global edtech started the last decade with $500M of venture capital invested in 2010 and finished 32x higher at $16.1B in 2020, nearly 2x the previous investment record in 2018. And, almost half of the transactions were focused on workforce (vocational, corporate training, and professional upskilling), illustrating the widespread and fundamental shifts the workplace is undergoing.
One of these transactions was Crehana’s $17.5M Series A led by Mountain Nazca, with participation from Salesforce Ventures and Endeavor Catalyst, which closed in December 2020. Crehana, co-founded by Diego Olcese and Rodolfo Dañino, is an on-demand learning platform for creative and digital professionals out of Peru. Anyone in Latin America with a smartphone can get quickly trained in micro certifications spanning everything from entrepreneurship to 3D animation on the platform. The company has benefited from significant tailwinds throughout the pandemic, with revenue growing by 300% as more people have turned to online learning.
As we entered the new year, we predicted that edtech would be one of the fastest-growing segments in many venture firms’ portfolios in 2021 — including our own. We expected to see the continued rise of workforce development and adjacent sub-sectors, fueled by meaningful changes in consumer attitudes and behaviors towards existing technologies, including a newfound willingness to integrate edtech components into curriculums and students’ learning journeys.
And, while we are only in March, we’re already seeing some innovative companies getting funded this year. Ironhack, a company based in Miami and Spain offering intensive tech bootcamps across Europe and North and South America, raised $20M in its latest round of funding from Lumos Capital, Creas Capital, Brighteye, and Endeavor Catalyst. Ironhack offers classes in subjects ranging from web development to UX/UI design, and data analytics to cybersecurity. Since its launch in 2013, the company has graduated more than 8,000 students, with a job placement rate of 89%, according to data collected as of July 2020. Among its many success stories, Ironhack helped Enrique, a deliveryman, or rappitendero, acquire new technological capabilities to accelerate his career as a data analyst on the Rappi team.
According to Ironhack co-founder Ariel Quiñones, 13 million jobs will be added to the tech industry in the US over the next five years. “We believe that practical skills training, a supportive global community, and career development programs can give everyone — regardless of their education or employment history — the ability to write their stories through technology,” Quiñones has said. Talk about equipping people with new fishing rods.
In a similar space, Wyncode, a Miami-based provider of bootcamps in data science, digital marketing, UX design, and web development, was acquired by Brainstation in January. Co-founders Johanna and Juha Mikkola will stay on to lead Brainstation’s operations in Miami as they continue to bet on the ecosystem’s tech talent. Brainstation will offer Wyncode’s signature bootcamps, in addition to cutting-edge certificate courses in the most in-demand fields, including data analytics, machine learning, Python programming, cybersecurity, digital leadership and innovation, and social media marketing.
Another company that secured new funding this year is ELSA, an app that helps people learn English by using speech recognition technology to correct pronunciation. Founded by Vu Van, ELSA raised a $15M Series B led by Vietnam Investments Group and SIG, with participation from Gradient Ventures, Endeavor Catalyst, and others. ELSA allows professionals previously limited from working at an international company due to pronunciation barriers to quickly upskill and unlock new career opportunities.
It is clear that one-size-fits-all learning trajectories are long gone, and this diverse range of accessible platforms allows learners to take matters into their own hands. Just as workforce training is changing, so is the landscape for K-12 learning, which made up a third of all edtech transactions last year. Notable transactions in this space so far this year include the acquisition of Nearpod by Renaissance Learning for $650M. In 2012, Emiliano Abramzon, Felipe Sommer and Guido Kovalskys were determined to reverse the student engagement crisis with Nearpod, an industry leader in the K-12 software and learning analytics space which gives teachers the tools to become creators of interactive lessons. In 2020, Nearpod experienced a 6x increase in lessons taught on the platform, with 1.2 million teachers engaged globally, and a presence in 75% of US school districts.
Descomplica’s $84.5M Series E co-led by Invus Opportunities and Softbank, with participation from the Chan Zuckerberg Initiative, made headlines this year as the largest edtech round in Latin America to date. Founded in 2011, Descomplica initially focused on helping students prepare for standardized tests to enter university and civil service in Brazil. The company has since grown and expanded, and in 2020, Descomplica launched the first online university in Brazil at an accessible tuition of ~$40/month. Originally a physics teacher in his own right, Descomplica Founder Marco Fisbhen has bold plans to democratize education in Brazil, stating, “We’re moving fast to build the largest college in Latin America, reaching one million students with a 100% digital model.” The company is leading the charge in developing engaging learning methodologies to drive real pedagogical outcomes, paving a clear path for learners into the labor market.
And, of course, we all know that education can be expensive. Founded in 2009 by Francisco Cordero, Laudex is an impact-driven fintech company based in Mexico that provides education loans to students with low- and middle-income backgrounds. These students are often unable to attend public universities due to an insufficient supply of public sector resources and are unable to afford private universities, leaving them in a precarious future employment position. Laudex’s reasonably-priced education loans allow students to pursue higher education programs (undergraduate, graduate, or technical degrees), setting them up for greater success in the workforce. According to the OECD, only 22% of 25–64 years olds in Mexico have a higher education degree, and Laudex is looking to close the gap. Just last week, Laudex announced a $5M investment from PG Impact to continue its social mission and focus on growing profitability amidst this volatile environment.
One thing is for sure — education is changing, largely in response to exponential advancements in technology, and it must continue to evolve to meet learners’ needs and the workforce demands of tomorrow. To see just how education is evolving — look no further than to entrepreneurs in the private sector, who are rapidly innovating to keep pace. Now more than ever, we must teach students to be lifelong learners — complacency is not an option in the face of a dynamic, global economy. Let’s go fish.
Endeavor-supported companies are noted in bold.
Jackie Carmel is the Managing Director of Endeavor Catalyst, an innovative, rules-based co-investment fund through which Endeavor invests into its portfolio companies in emerging and underserved markets. Launched in 2012, Endeavor Catalyst has $250M in Assets Under Management (AUM) across three funds and has made 160+ investments across 30 markets to date. You can reach Jackie on LinkedIn here.
Sophie Kronk leads Endeavor’s worldwide Education & Talent portfolio on the Entrepreneur Selection & Growth team. Endeavor is the world’s leading community of high-impact entrepreneurs, aiming to unlock the transformational power of entrepreneurship by selecting, supporting, and investing in the world’s top founders and providing them a platform to pay it forward. You can reach Sophie on LinkedIn here.