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- The End of the Road for Edmodo: Egypt, via China
The End of the Road for Edmodo: Egypt, via China
Edmodo, once valued at $236 million and currently boasting more than 100 million registered learners, will shut down the LMS in just over a month, as notified in Twitter.
The online FAQ post provided a partial explanation:
This shut down will have no extended transition period, as the site will be unavailable five weeks from tomorrow, with all data permanently deleted.
North American LMS View
In North America, Edmodo was used as a primary LMS by roughly 5% of K-12 districts based on our most recent market analysis, with those school districts representing 4% of total enrollments. Only Canvas, PowerSchool / Schoology, Google Classroom, Moodle, and D2L Brightspace were more widely used in K-12. 1
This still leaves us with the question of how we got here.
Enter the NetDragon
Edmodo was founded in 2007, positioned as the Facebook of education, and by 2012 the company announced key milestones as shared by TechCrunch.
Two years later Pitchbook estimated the company’s value at $236 million. The problem was that Edmodo had very little revenue – just $1 million for 2017. Edmodo’s basic platform was free, although it offered a paid “Pro” version. By 2018 the investment had dried up (after previous rounds totaling nearly $100 million), and China-based gaming company NetDragon acquired Edmodo for $137.5 million. At the time, NetDragon believed the acquisition would help it become “the world’s largest learning community.”
NetDragon is publicly traded, and its most recent financials showed that the Education segment was growing 31% year-over-year, with revenues of ~$512 million 2, but with core losses of $65 million. NetDragon’s Gaming segment was carrying the company in terms of profit.
The vast majority of the Education segment is for Promethean interactive display boards, but NetDragon has been under pressure to cut costs in Education.
Recent Plans for Edmodo
As of the year-end 2021 earnings report, Edmodo was important to NetDragon in two ways. One is a new business line based on the Metaverse.
Back in the real world, the more concrete usage of Edmodo was for NetDragon’s Ministry of Education (MOE) business that is based on country-wide rollouts of technology. The big win was in Egypt, with 22 million students, which signed up in early 2020 to deploy Edmodo to all students as part of their pandemic mitigation strategy.
In 2022, NetDragon had plans to make this LMS adoption more permanent.
I have not found any information confirming my hypothesis, but I believe that the Edmodo side of the deal in Egypt fell apart. It would make no sense to completely shut down Edmodo if it were still a key part of a paid country-wide deployment to 22 million students; rather, the company could have saved expenses but kept the platform alive by removing the free option.
Why the hasty move with just over a month’s notice? I suspect because NetDragon is a publicly-traded company, and their fiscal 3rd quarter ends September 30th. If my hypothesis about Egypt is correct, then the company will want to also show how they are cutting costs.
The only other explanation that makes sense to me is if Edmodo the platform will be used only as a white labeled back end solution for Egypt. Either way, it looks like the end of the road for Edmodo as a platform was in Egypt.
Meanwhile, millions of K-12 students and teachers globally will likely be migrating to a new LMS with little warning.
1 Data provided by our partners at LISTedTECH.
2 Converting from Chinese Yuan to dollars as of the March 2022 earnings release.