IBL News

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  • Amazon Starts Selling COVID Test Kits for $39.99 on Its Website

    Amazon Starts Selling COVID Test Kits for $39.99 on Its Website

    IBL News | New York

    Amazon.com started today to sell its own COVID-19 at-home test PCR kit, authorized by the FDA. The test retails for $39.99 on the Amazon website and is available only in the U.S., and without a prescription.

    Amazon Covid’s Kit, shipped via Amazon Prime, offers a package needed to perform a nasal swab. It provides results in 24 hours on AmazonDx.com after shoppers send nasal samples to an Amazon lab for processing.

    During the pandemic, Amazon created in-house labs for testing its frontline 750,000 U.S. and U.K. workers. Now the e-commerce giant is offering it to shoppers.

    The Seattle-based company says it uses the most accurate PCR method and it meets requirements for testing when traveling within the US (except Hawaii), and when traveling from the US to many international locations. 

     

  • Class Central Says that 2U Might Use edX’s Leads to Push Learners Into Debt

    Class Central Says that 2U Might Use edX’s Leads to Push Learners Into Debt

    IBL News | New York

    2U’s purchase of the educational site edX.org will make Coursera.org stronger since edX is surrendering the ideological advantage of its nonprofit status. In addition, 2U is relegating edX to the level of “marketplace” with millions of leads; 2U might use those leads to push thousands of learners into debt, following conversion practices through its “marketing engine.”

    This is the view of Dhawal Shah, an expert in online education and founder and CEO of course aggregator site, Class Central.

    Dhawal Shah’s perspective, expressed in his latest article, “2U + edX Analysis: Win for 2U, Risk for edX, Opportunity for Coursera”, contradicts the dominant narrative of win-win, developed by 2U and edX and amplified by MIT and Harvard University top management.

    Shah’s research doesn’t include the Open edX software, which legally will be owned and controlled by a new nonprofit flooded with $800 million and governed by MIT and Harvard. This open-source platform emerges as one of the winners of the transaction, according to analysts.

    These are the main ideas of the CEO of Class Central:

    • “As someone who’s followed edX and the MOOC space since day 1, this just looks like capitulation.”
    • “For years, edX presented itself as a morally superior alternative to Coursera due to its nonprofit status. But now, they’re relegated to the status of a “marketplace” that might push thousands of learners into debt.”
    • “Some argue this acquisition threatens Coursera. I suspect the opposite: it could make Coursera even stronger since edX is surrendering its biggest, and possibly only, defense against Coursera.”
    • “edX losing its nonprofit status could make some universities rethink their partnerships, creating an opportunity for Coursera to convince some of them to offer courses on their platform or even switch platforms entirely.”
    • “For edX to grow and be able to compete with Coursera, 2U would need to invest hundreds of millions of dollars over the next few years. But is 2U willing to do that? Scratch that. Can 2U even afford to do that?”
    • “edX FY2020’s expenses were about $100M. Will 2U be able to invest another $50–$100 million per year to grow edX?”
    • “Maybe if 2U’s stock price keeps going up, they’ll be able to secure another loan. But this puts edX at the whims of the “market”.”
    • “MIT has already announced it’ll launch a new platform called MITx Online based on Open edX, specifying that “MIT faculty may choose to continue to offer their courses through the new edX after the transaction is completed or move them to MITx Online. This provision signals that some faculty might not be comfortable offering their courses on a for-profit platform, so they’ve been provided a way out. Basically, ~10% of edX’s learners are enrolled in MIT courses. And some of these courses might now move to MITx Online. So this acquisition already cost edX their exclusive access to the offerings of one of the world’s most famous universities.”
    • “2U CEO said the company has long believed that “universities are in control, 2U is not” when it comes to any partnerships with the company. “We have to do right by the stakeholders every single day,” he added. Basically a non-answer from a seasoned executive.”
    • “This is how edX marketplace might work:

    – Combined listings: 2U products will be listed in edX’s catalog. When you visit edX and search for a course, you’ll see programs from edX and 2U combined, with 2U products potentially given priority.

    – Email marketing: registered users might start receiving targeted emails regarding 2U programs based on their activity on the website. For instance, if you enrolled in a data science course, they will send you promotional emails for data science degrees or GetSmarter courses.

    – Landing pages: 2U might also take advantage of edX’s strong presence on Google to create specific landing pages for their online degrees or boot camps.”

    • “2U estimates that 38% of 2U’s 2019 revenue was derived from Title IV loans. But it failed to disclose how many students were getting loans from private lenders.2U’s admissions team tries to convert a “lead” into an actual enrollment through email marketing or direct calls. Companies tend to be really secretive about this and go out of their way to pretend it doesn’t happen.”
    • “I wouldn’t be surprised if there are hundreds of employees at 2U each making dozens of calls daily to prospective students. The now-defunct HotChalk, an OPM like 2U, boasted about making 14k calls daily on its website.”

  • Instructure Acquires Its Partner “EesySoft” as It Prepares to Go Public… Again!

    Instructure Acquires Its Partner “EesySoft” as It Prepares to Go Public… Again!

    IBL News | New York

    Instructure, which owns Canvas LMS, announced last week the acquisition of its long-time partner EesySoft, for an undisclosed amount. The purchase took place in the same week that Instructure quietly announced that it is preparing to go public again, just 15 months after equity firm Thoma Bravo made the company private.

    This June 28, 2021, Instructure Holdings Inc. filed for an IPO (Initial Public Offering) in the SEC. The S-1 filing came after a year-and-a-half-long restructuring of the company discretely, without the watch of regulators and common stockholders in the market.

    In this timeframe, Instructure sold Bridge corporate LMS in February 2021, executed an undisclosed number of layoffs on sales and marketing, and move part of its software development to Budapest, Hungary, where operating costs are notoriously lower.

    Significantly, Instructure didn’t post the announcement of the IPO on its usual PR channels, nor on its Twitter account. The EdTech community’s attention on the 2U-edX transaction helped Instructure’s IPO request to go unnoticed last week.

    Instructure described in its S-1 the restructuring in these terms:

    “We implemented a strategic expense reduction plan that enabled us to focus on delivering customer value sustained by recurring revenue, durable growth, and improved retention, with fewer resources than we had at the time of the Take-Private Transaction. We simplified our organizational design, moved a portion of our development efforts to Budapest, closed and consolidated facilities internationally and within the U.S., and aligned the organization with our sole focus on serving education.”

    The number of shares to be offered and the price range have not yet been determined.

    Instructure will be listed on The New York Stock Exchange (NYSE) under the ticker symbol “INST”, exactly the same it had.

    During the first three months of 2021, Instructure had revenue of $94.0 million and a net loss of $33.1 million, according to the filing. The company’s long-term debt is $778 million.

    Impact by Instructure

    The acquired company EesySoft will be rebranded as “Impact by Instructure”, with solutions to help institutions adopt new tools and evaluate their impact on student engagement and outcomes.

    Steve Daly, CEO of Instructure, explained that “hybrid learning is here to stay” and “districts and schools are under increased pressure to measure the ROI.”

    EesySoft is a 40-person company based in Amsterdam, founded in 2010 by CEO Michel Visser and CTO Jan Henrick Ejme [in the picture above].

    The start-up provides a guided user experience for education technology platforms like Canvas LMS, thereby improving teaching and enhancing the student’s online learning experience. It also offers help for institutions to either add their own or integrate 3rd party assets.

  • Trading App Robinhood Files Its IPO, Targeting a Valuation of $40B

    Trading App Robinhood Files Its IPO, Targeting a Valuation of $40B

    IBL News | New York

    The popular stock trading app for consumers, Robinhood, with 17.7 million active users in its platform, officially filed to go public yesterday, posting its S-1 filing. It will be listed under the symbol “HOOD” in the NASDAQ. According to experts, Robinhood is targeting a valuation of $40 billion.

    The public listing comes after a period of steep growth in crypto trading and a heavy reliance on order-flow payment — a controversial practice of selling trade orders to market makers. Payment for order flow accounted for 81% of Robinhood’s revenue in the first quarter. Options trading brought $198 million. Cryptocurrencies’ revenue rocketed to 17%. More than a third of that cryptocurrency revenue came from joke currency Dogecoin trading.

    Robinhood saw its revenues soar from $277.5 million in 2019 to $985.8 million in 2020. During the first quarter of 2021, it generated revenues of $522.2 million and operating expenses of $463.8 million.

    Notably, Robinhood was profitable in 2020, generating a net income of around $7.4 million during the one-year period.

    However, in the first quarter of 2021, the company lost an epic $1.49 billion. The large loss was due to a fair-value adjustment to convertible notes and warrants that were used to raise emergency funding during the GameStop saga.

    Robinhood is reserving 20% to 35% of its IPO shares for users.

    The filing for IPO came two days after of a landmark fine of $70 million from FINRA, as a result of misleading information.

    To help guide it through its stock market debut, Robinhood has picked Goldman Sachs and JP Morgan as joint lead book-running managers.

    Robinhood raised $3.5 billion this year alone.

  • Wall Street Receives 2U’s Purchase of edX with Gains

    Wall Street Receives 2U’s Purchase of edX with Gains

    IBL News | New York

    While MIT’s and Harvard’s nonprofit edX and publicity traded 2U Inc (NASDAQ: TWOU) continue promoting the advantages of its $800 million deal, the capital markets remain moderately optimistic.

    Since the announcement of the purchase of edX’s brand and nearly all of its assets (on June 29th), the stock is up around 4%, to $42.22 — as it closed this Friday, July 2.

    The market capitalization is $3.14 billion, still far beyond competitor Coursera, with $5.72 billion.

    Edward J. Maloney and Joshua Kim academic experts wrote that “the No. 1 reason as to why this deal is happening, it would be Coursera.”

    “A well-capitalized online platform company like Coursera represents a potentially existential threat to the traditional online program management model, at least in the medium to long term.”

    In addition, 2U and similar OPMs (Online Program Manager) companies spend around 20% of their revenue on client acquisition (paying students), while Coursera’s 80 million global learners allow them to spend considerably less. edX claims to host 39 million registered learners.

    Driving down student acquisition costs, by turning free or low-cost students into paying customers, would allow 2U to scale more rapidly and at a lower cost.

    Coursera can be a strategic threat to existing OPMs, by offering bundled (OPM-like) services, such as instructional design, project management, media, and marketing.

    Regarding edX, MIT and Harvard’s executives implicitly admitted that Coursera’s successful IPO and its well-capitalized strategy made it difficult for a nonprofit to fully compete in the platform space.

    After paying $800 million in cash, education technology provider 2U plans to offer more than 3,500 programs to some 50 million customers globally. The transaction is expected to close in the fall, following regulatory and governmental approval.

    2U did warn that the acquisition could lower its EBIDTA (earnings before interest, taxes, depreciation, and amortization) by a low single-digit percentage on an adjusted basis in 2022. It expects the edX assets will add to earnings in the following year.

    edX will continue to be a public-benefit entity under the umbrella of 2U, allowing ongoing free class auditing and credentials for those seeking lower-cost degrees.

    Analysts said that rising higher education costs make offerings, like edX attractive to students seeking alternative, lower-cost degrees, and certification.

    The shift to remote learning, due to the COVID-19 pandemic, has been a boon to Chegg and 2U, two publicly traded education technology companies that provide everything from tutoring services to online curriculums.

     

     

    [Disclosure: IBL Education, the parent company of the IBL News service, uses Open edX software on its platform, and provides custom ecosystems to organizations mentioned in this report and others firms.]

  • Flooded With Cash and the Open edX Software, MIT and Harvard Start to Shape their New Non-Profit Venture

    Flooded With Cash and the Open edX Software, MIT and Harvard Start to Shape their New Non-Profit Venture

    IBL News | New York

    The new, yet-unnamed, educational nonprofit that MIT and Harvard will govern together and will continue to own, advance, and enhance Open edX, MIT said yesterday. It’s expected to be a very different venture from the existing edX Inc, which will be owned by purchaser 2U, becoming a subsidiary registered as a public benefit company.

    It will start with a whopping amount of $800 million in cash paid by 2U and the property of the Open edX software. “It will explore new ways to make online learning more effective, engaging, and personalized,” said MIT.

    Once the transaction is completed, within the next four months, “the nonprofit will aim to do what edX could not: invest at the necessary scale to sustain Open edX as a fresh, vital, open-source learning platform for the world, and tackle the next great research challenges in online learning.”

    “It could, for example, invest in the potential of artificial intelligence to make online learning more responsive and personalized to the individual learner.”

    According to MIT’s President, L. Rafael Reif, the nonprofit mission, focus, agenda, aspirations, and research program will be developed following consultation with faculty of both MIT and Harvard.

    A non-disclosed part of those $800 million in proceeds that 2U paid for the edX brand, course catalog, business, and partners, will be used “to repay a recent line of credit from MIT and Harvard.”

    MIT and Harvard revealed that over the years they contributed $80 million total ($40 million each) to edX. The two institutions said that “they will not recoup those funds from the sale.”

    However, the influx of hundreds of millions of dollars will go to the new non-profit venture. The new venture will keep a non-defined number of employees of the existing edX. Others will work for 2U. The role of CEO Anant Agarwal is not clear yet.

    “He will have many options and opportunities to consider, including potentially with the public benefit company edX or the nonprofit MIT and Harvard will govern,” MIT said.

    MITx Online Will Use the Open edX Software

    On the other hand, MIT Open Learning will develop a new world-facing platform called MITx Online, which will host only the institute’s MOOCs. It will not aggregate content generated by other universities. MITx Online will use the Open edX software. OpenCourseWare and the Open Learning Library will continue working.

    2U’s “Marketing Advantages”

    In the meantime, publicly-traded 2U elaborated on the marketing advantages that it will achieve.

    Through a set of slides [PDF download], 2U executives told investors and reporters that the deal will harness the  “marketing engine” of their company with the well-known brand and course marketplace of edX, especially in terms of client acquisition’s cost.

    2U predicts it could convert 0.03% of edX’s users into paying customers. This would lower its marketing costs by $4,000 per enrollment and save 2U $40 to $60 million annually.

     

    [Disclosure: IBL Education, the parent company of the IBL News service, uses Open edX software on its platform, and provides custom ecosystems to organizations mentioned in this report and other firms.]

     

    • IBL News, June 29, 2021: 2U Buys MIT’s and Harvard’s edX Platform for $800M; Open edX Software Kept as Non-Profit

  • 2U Buys MIT’s and Harvard’s edX Platform for $800M; Open edX Software Kept as Non-Profit

    2U Buys MIT’s and Harvard’s edX Platform for $800M; Open edX Software Kept as Non-Profit

    IBL News | New York

    In a surprising deal, 2U Inc. (Nasdaq: TWOU) announced yesterday that it will purchase edX Inc. — a nonprofit founded by MIT and Harvard University — for $800 million in cash.

    With the transaction, Online Program Manager (OPM) 2U will acquire all edX assets, including the brand, the website with 50 million learners, a marketplace with 230 university and corporate partners, and 3,500 digital programs.

    The $800 million proceeds will flow to a new, still unnamed nonprofit led by Harvard and MIT that “will collaborate with educational institutions, governments, and other organizations to develop and evaluate new approaches to learning and pedagogy.”  This non-profit will maintain the open-source platform Open edX, according to the press statement.

    2U stated that it plans to operate edX under its umbrella “as a public benefit entity, a class of purpose-driven organizations that balances the interests of shareholders with other stakeholders.” It means that the new edX will operate as a for-profit company, as MIT confirmed.

    The Lanham, Maryland – based company said that “it has also committed to continuing to fulfill the edX mission by, among other things, guaranteeing affordability through the continuation of a free track to audit courses.”

    In addition, 2U ensured that it will contribute “to the ongoing development of the fully open-source and independent platform Open edX.”

    2U and edX described the deal as “an industry-redefining combination that will help power the digital transformation of higher education, expand access and affordability, and usher in a new era of online learning.”

    A themed, PR website called Transformingdigitaleducation.com was specifically created to announce the transaction.

    With over 80 top universities as customers, 2U said was expecting “to approach $1 billion in yearly revenue by the end of 2021.”

    In 2020, edX revenues were 84.6 million, and its operating loss $17.4 million, according to public records.

    “By combining 2U and edX’s global reach and offerings from free to degree, together we believe we can fully realize our shared vision, meet the growing worldwide demand for online education, and deliver growth and long-term value to shareholders and other stakeholders,” said 2U Co-Founder & CEO, Christopher “Chip” Paucek.

    “As edX looks to its next phase of growth and impact, joining forces with 2U marks a major milestone in our evolution,” said Anant Agarwal, Founder, and CEO of edX and MIT Professor.

    “Today’s announcement will carry forward this mission on a whole new scale, connecting many more learners with a wider range of high-quality options for content, credentials and degrees. With online education rapidly changing, it’s the right moment for this leap of evolution for edX,” said Harvard president Larry Bacow and MIT president Rafael Reif in a joint statement. “At the same time, the nonprofit that emerges from this transaction will enable us and our partners to support innovation that enhances learning for all and, we hope, play a catalytic role in closing the learning gap that exists for far too many.”

    2U said that it will contribute to supporting the Open edX platform, despite it will belong to MIT and Harvard’s new non-profit company. “Following the closing, 2U expects to be a significant contributor of code to the Open edX platform, and the transaction is expected to increase the impact that Open edX can have in supporting learning outcomes around the world. Open edX currently powers approximately 2,400 learning sites worldwide.”

    • MIT’s view: MIT and Harvard agree to transfer edX to ed-tech firm 2U

    • Harvard’s view: Harvard and MIT-led nonprofit to tackle longstanding inequities in education

    • MIT News: FAQs on agreement to sell edX to 2U, Inc. and fund nonprofit to reimagine digital learning

  • Chromebooks See a Surge of Demand of 43.4 Million Units Due to the Pandemic

    Chromebooks See a Surge of Demand of 43.4 Million Units Due to the Pandemic

    IBL News | New York

    Google’s Chromebooks will grow 33.5% this year, while tablets — which compete at similar price points — will increase only 1.8%, according to a forecast from IDC. In total, there will be 43.4 million Chromebooks shipped, while tablets will reach 166.5 million units.

    This surge is due to the increased demand for lower-cost remote learning devices after the COVID-19 pandemic.

    “Beyond 2021 both categories will continue to struggle as consumer and education demand is expected to slow,” said Anuroopa Nataraj, Research Analyst with IDC’s Mobility and Consumer Device Trackers, in a statement.

    “With the relaxation of lockdown restrictions, consumers will begin to increase spend on travel and other modes of entertainment, which in turn will impact growth in these devices,” she added.

    After the 2021 drop, IDC predicts that Chromebooks will see a comeback in 2025.

    According to the research firm, Chromebooks work well when high performance and legacy support are not a priority, but they don’t supplant Windows and Macs.

  • AI Technology in Education Will Grow 40% Annually Until 2027

    AI Technology in Education Will Grow 40% Annually Until 2027

    IBL News | New York

    Artificial Intelligence (AI) in the education market will cross $20 billion by 2027, according to market research and consulting provider Global Market Insights. It is expected to grow at a Compound annual growth rate (CAGR) of 40% between 2021 and 2027. K-12 will account for over 30% of the revenue share.

    The rising demand for online learning platforms after the COVID outbreak has prompted the development of innovative AI machine learning-based solutions.

    AI is helping to improve student’s learning styles by offering personalized tutoring, immediate feedback, and gauging pre-existing knowledge.

    “With AI, students feel comfortable making the errors necessary for learning, which they would otherwise be hesitant to make in front of their human tutors and peers,” says the report.

    Experts say that machine learning will allow us to understand educational patterns and suggest variations for teaching methods while enabling unbiased grading systems for both students and teachers.

    According to the author of the report, one of the participants in the AI education market will be IBM, AWS, Microsoft, Google, Nuance, Century Tech, Blackboard, Pearson, Cognii, Volley.com, Blippar, Knewton, Jenzabar, Content Technologies, PLEIQ, Luilishuo, Pixatel System, Cerevrum Inc., CheckiO, and Quantum Adaptive Learning.

    Europe is expected to hold a significant market share with supportive government initiatives.

     

  • NVIDIA AI-Based App Turns Rough Sketches into Realistic Landscapes Scenes

    NVIDIA AI-Based App Turns Rough Sketches into Realistic Landscapes Scenes

    IBL News | New York

    NVIDIA’s Research team announced this week, as a free beta, its Canvas AI app, which instantly turns simple brushstrokes into realistic landscapes images.

    The app displays the photographic result as people paint, allowing creating backgrounds quickly and speeding up concept exploration.

    NVIDIA Canvas is part of NVIDIA Studio, a program that provides creators with hardware and software tools to assist in realizing their creative visions. It is a much more user-friendly version of the prototype GauGAN, deployed in 2019. It runs on a Windows 10 equipped computer with a decent Nvidia graphics card.

    The software uses a form of AI called generative adversarial networks (GAN). To deliver realistic portraits, it has been trained on an NVIDIA DGX system using over 5 million images.

    “The tool isn’t just stitching together pieces of other images, or cutting and pasting textures, but creating brand new images, just like an artist would,” explained Stanley Tack, from NVIDIA.

    The created image can be imported into Photoshop, to continue refining it or combining with other artwork.