Tuesday Follow Up

Updated EdTech market valuations, UArizona assumptions, Minnesota's hold my whiskey moment, and LMS milestones

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Aloha from the On EdTech mid pacific office this week. I had an excellent interview published last week with Alex Usher on his podcast, partially exploring a quick history of online education in the past two decades. Morgan published her conference notes on ASU+GSV, and we published our podcast episode along with Neil Mosley on the new Times Higher Education online rankings. On to the follow up, or really follow up to follow ups.

EdTech Market Valuations

As you well know, this is not a financial analysis newsletter. However, the size and scope of the market downturn for EdTech is relevant for vendor strategy and for the financial health of publicly-traded companies. This means that it is a good time to update our summary of market valuations.

The approach I’ve taken is to compare the market valuations to the date of Coursera’s Initial Public Offering (IPO) in late March 2021, as that date best captures the previous peak of exuberance. This is not the same as the peak valuation for all companies, as 2U’s maximum occurred in May 2018, but it does capture an overall market moment of comparison.

Keypath, Instructure, and D2L had their IPOs after Coursera, in June, July, and November 2021 respectively. I used the IPO valuation as the comparison point for those three.

What we see today is that four companies have actually increased their stock prices since March 2021: Pearson (+36%), Grand Canyon Ed (+21%), PowerSchool (+13%), and Instructure (+3%). Nine others that we track have lost value, ranging from Wiley (-30%) and D2L (-37%) to 2U/edX (-99%) and Zovio (-100%, out of business).

To help with readability, I have shifted to a moving six-week average since we are looking at big picture trends and not financial market details. In addition, I show the date marking the end of “free money”, or effectively zero interest rates.

You can see that the bifurcation of gainers and losers began in earnest one year ago.

A couple of other trends jump out (at least to me).

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