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IBL News | New York

Howard University in Washington, DC, partially reopened Wednesday after a ransomware cyberattack forced the institution to cancel classes for two days.

“The situation is still being investigated,” said the university in a statement. “To date, there has been no evidence of personal information being accessed or exfiltrated.”

Online and hybrid undergraduate courses remained suspended, while all in-person undergraduate, graduate, professional, and clinical experiential courses resumed yesterday.

The university deployed alternative Wi-Fi hot spots on campus as a way to provide access to course lecture content, academic modules, and apps requiring Internet access. However, only some apps were accessible and extended courses deadlines.

The ransomware attack was detected on Friday.

Howard University — one of the leading historically Black colleges and universities, with over 11,000 students — is working with FBI and city officials and installing additional safety measures to protect data.

In recent months, the U.S. has seen a surge in the number of ransomware attacks in the U.S.

These attacks have become a growing concern for educational institutions and school districts, as they hold troves of private data.

Researchers recently estimated that 3,880 schools and universities have experienced ransomware attacks since 2018, costing billions in downtime and ransom payments.

Cybercriminals have hit not only educational institutions but hospitals, pipelines, private companies, and local governments.

IBL News | New York

The Palo Alto-based learning platform Workera.ai announced it raised $16 million in Series A. The funding was led by New Enterprise Associates and included existing investors Owl Ventures and AI Fund, as well as luminaries in the AI field such as Richard Socher, Pieter Abbeel, Lake Dai, and Mehran Sahami.

To date, the Californian start-up has secured a total of $21 million, including a seed round of $5 million last October.

Since the last quarter of 2020, the company claims that it has acquired over 30 customers, including Siemens, across industries like professional services, medical devices, and energy.

Founded in 2020, Workera.ai offers personalized learning plans through targeted resources based on the current level of a person’s proficiency to close the skills gap.

It tests and maps out with AI and machine learning the skill sets within a company, so the client knows what they have.

The start-up says that its library has more than 3,000 micro-skills and personalized learning plans.

The founders of Workera, Kian Katanforoosh, and James Lee, COO, previously worked with Andrew Ng, Coursera co-founder and creator of education start-up deeplearning.ai, and now Workera’s chairman. Now, Workera features itself as a deeplearning.ai company.

Kian Katanforoosh, CEO at Workera, says that he will use the new funding to invest in more talent and build out new products. He explained on TechCrunch that he wants the company to better understand natural language processes at a granular level to assess people more precisely.

The spending on AI skills is expected to surpass $79 billion by 2022.

Mikel Amigot, IBL News | New York

“When colleges turn to OPMs, rather than building their own digital capacity, they forfeit their future by neglecting to strengthen their virtual infrastructure,” analyzes online learning expert Robert Ubell in his latest book “Staying Online. How to Navigate Digital Higher Education,” published by Routledge and scheduled to be released this upcoming September 7.

“Staying Online” is one of the first books to analyze the dramatic changes in higher education since the pandemic started in March 2020. Across 180 pages, the book covers the rise of MOOCs, OPMs, and the massive digital immersion of higher education due to the COVID-19 outbreak.

In an interview at IBL News this week, Robert Ubell, Vice Dean Emeritus of Online Learning at NYU’s Tandon School of Engineering, columnist, and author of the essay Going Online: Perspectives on Digital Learning, pointed out “the vast differences in the digital academic economy today, with online and on-campus enrolling different sorts of students, with relatively different faculty, different infrastructure, and far more expensive recruitment strategies.”

“Despite strong opposition, digital education has triumphed,” he states.

 

IBL News: Would you summarize the main findings of your book?

Robert Ubell: Staying Online is among the first books to recognize the dramatically changed higher ed landscape since the pandemic altered secondary education in the US and around the world.

It covers the rise of MOOCs, OPMs, and the almost total immersion of every higher ed classroom in digital education at the height of the COVID-19 invasion.

It traces the vast differences in the digital academic economy today, with online and on-campus enrolling different sorts of students, with relatively different faculty, different infrastructure, and far more expensive recruitment strategies.

Despite strong opposition, digital education has triumphed.

 

IBL News: Where will online education be within one, five, ten years?

Robert Ubell: As residential enrollment continues its steep decline–owing to falling high-school graduation rates in the US especially–online has stepped in to fill missing on-campus students with virtual ones.

Today, about a third of college students are online, in 5 to 10 years, following the digitization of nearly every industry, it may represent nearly half, a totally unexpected climb from nowhere in just two decades.

 

IBL News: What are the most important disruptive initiatives?

Robert Ubell: Surely, MOOCs have played a decisive role in expanding the breadth of higher education. Today, with more than 180 million learners worldwide. Last year, MOOC providers launched more than 2,800 new online courses and 19 digital degrees.

OPMs, too, have witnessed a dramatic expansion. Last year, 300 new OPM partnerships were signed, and in the first quarter of this year, 109 new ones were launched.

 

IBL News: Would you share your view on the 2U-edX transaction? What does the deal mean for the industry and the learner?

Robert Ubell: Harvard and MIT saw an exit strategy when 2U came calling, with hard cash to take the money-losing pit–edX–away.

2U’s acquisition of edX doesn’t represent a change in the online economy, so much as a recognition of 2U’s financial power and Coursera’s continued to climb above all other MOOC providers.

It leaves two edtech giants at the top, exactly where they’ve been for years.

 

IBL News: What do you think about OPMs, and in particular, 2U?

Robert Ubell: OPMs succeed in often generating far more enrollments than colleges on their own, but the payback is serious, handing over half of each school’s online revenue secured by their OPM partners.

When colleges turn to OPMs, rather than building their own digital capacity, they forfeit their future by neglecting to strengthen their virtual infrastructure, a competency they will surely require as online becomes the name of the game, not just for one or two master’s degrees, but for hundreds of courses.

 

IBL News: What’s best for low-income students in higher ed?

Robert Ubell: Because online degrees allow low-income students to continue working while earning their degrees, digital education stands out as a key path for them to join the new economy.

But they shouldn’t be misled by for-profits that do not provide the skills they need to succeed in the post-industrial economy.

 

IBL News | New York

With unprecedented measures against the COVID Delta variant — reflected in the request of double vaccination and PCR test for attendees — the leading EdTech conference in the world, the ASU+GSV Summit begun yesterday.

Around 3,000 attendees flocked to San Diego’s Manchester Grand Hyatt Hotel, where the three-day event is taking place this week (9-11 August). A mix of wealthy investors looking for opportunities, rising start-ups, successful and aspiring entrepreneurs, academic presidents, and managers paid $3,500 for the entrance — nonprofit organizations paid one-third of it.

Organizers managed the event smoothly, without the need to enforce the mandatory rule of wearing masks. The exception happened during lunchtime in the large ballroom of the hotel where hundred of attendees stayed maskless.

The atmosphere among participants was relaxed. ASU+GSV insisted on the message, advertised on large screens, “We’re family”, in an attempt to calm the anxiety due to COVID / Delta. However, some speakers canceled at the last minute, afraid of the Delta variant spread. Moderators of the panels avoid mentioning it, and those speakers were simply removed.

The 12th edition of the ASU+GSV adopted a hybrid format, with many talks broadcasted through the app. Virtual registration was free. The video stream worked fine.

The event features 600+ speakers on a variety of subjects tackling higher-ed, K-12, workforce, and global education concerns. The summit includes the GSV Cup pitch competition for pre-seed and seed-stage education technology startups for $1 million in prizes. More than 700 startups have been judged by over 150 venture capitalists across the globe. The top 10 will compete at the summit, and the audience will vote for the winners.

Arizona State University (ASU) President, Michael Crow, was once again the involuntary star due to his permanent focus on innovation. He participated in the first three panels in the morning, developed all in a tiny room packed with attendees. “We are at the beginning of innovation. Everything has been transformed except education,” he said.

During the panel titled “Hollywood and Higher Ed Meet Up”, Michael Crow presented, along with film producer Walter Parkes, the Dreamscape Learn project, “a learning breakthrough initiative”, in his words.

A staff of 125 people works on this exploration project based on creating immersive, Hollywood-quality virtual environments where students interact with an avatar.

Crow criticized the fact that there is almost no national investment in education. “The U.S. laboratories are dedicated to everything but education.”

Another initiative presented yesterday was the “Cintana Alliance,” a partnership between ASU and consultant and investor Doug Becker’s company, intended to introduce a new model for global universities.

.@asugsvsummit discussion around #DreamScapeLearn with Michael Crow and Walter Parkes. Starting with Artificial Intelligence in biology classes @ASU Reversing the trend of low student engagement at the University level. #asugsvsummit #ASUGSV pic.twitter.com/5msTRCTu9n

— Matt Miller (@LakotaSuper) August 9, 2021

Day 1 of @asugsvsummit has been truly delightful, especially spending time with so many fantastic colleagues I have missed so much. #asugsv2021 #asugsvsummit
(Vaxxed+ negative test+masking indoors)
❤️☺️ pic.twitter.com/SWyEVjIHRk

— Dr. Bridget Burns (@BBurnsEDU) August 10, 2021

Congrats to our very own President and CXO @kat_thegeek for winning this year’s #PowerOfWomen award from @gsvventures at @asugsvsummit. Kat’s put nine years into making Degreed a pioneering company, and we wouldn’t be where we are today without her. pic.twitter.com/ZHnPYEo1FO

— Degreed (@degreed) August 9, 2021

IBL News | New York

The free-commission trading app Robinhood (NASDAQ: HOOD) closed a wild week trading up with a gain of 56.5%, after another jump of 7.9% this Friday. The stock ranked among the most actively traded companies valued at more than $500 million. The surge added $30.2 billion of market value to the controversial start-up.

This wild ride contrasted with the lackluster debut on the Nasdaq last week.

Analysts agree to feature Robinhood — whose app helped fuel the memeification of the market — as a meme-stock. The presence of amateur investors fueling rallies is truly confusing fundamental analysts.

“It has officially become a meme stock, and this week’s wild ride could be just the beginning if legions of amateur investors pull money from their old favorites to buy more shares while insiders are dumping them,” wrote Bailey Lipschultz for Bloomberg.

This meme status resembled the stock rallies of AMC and GameStop earlier this year.

Insisting on this volatility, Eric Schiffer, chairman of Patriarch Organization, a Los Angeles-based private equity firm, said, “investors need to recognize that this is going to trade like a crypto or other meme-related stocks in the short run and they could see significant positional changes.”  

Skeptics note on Thursday’s 27% drop after the news that existing stockholders would sell up to 97.9 million shares over time. On Friday, Robinhood reiterated that it was not selling any stock for now.

“Robinhood is not itself selling any additional securities but filed the Resale S-1 on behalf of certain of its shareholders pursuant to a pre-existing contractual obligation,” Robinhood said.

Anyway, the SEC would need to approve any transaction after Robinhood’s second-quarter earnings on August 18.

The three-day rally of the stock began on Tuesday and it was triggered by news that Cathie Wood’s exchange-traded funds were snapping up shares. It was refueled when options started trading Wednesday.

The market consensus is that when meme traders strike, the volatility will be unprecedented like it’s happening with crypto stocks.

IBL News, Mikel Amigot | New York

While striving for a valuation of up to $35 billion, Robinhood Markets Inc, the Menlo Park, California-based online brokerage has started the allocation of shares for its app traders.

At a range of $32 to $42 per share, the firm said that it is seeking to raise about $2.2 billion.

Since its inception, Robinhood raised $5.60 billion in 24 investing rounds with 56 investors involved. The company’s impressive growth is mostly due to the intuitive interface, zero commission, and cryptocurrency trading.

With 18 million active retail traders, predominantly Gen Z and Millennials, with an overall client asset amount of $80 billion, Robinhood is trying to reshape how small-time traders invest in companies becoming public.

As it advances toward its IPO and defying conventions, last Saturday, the startup hosted a live-stream roadshow presentation — with telepromptered answers. All of Robinhood’s app customers received an email invitation to attend. Typically, this type of event is limited to institutional investors and hedge funds.

The Silicon Valley startup that popularized commission-free trading is reserving 20% to 35% of its shares for traders of the app, an unusual move for a high-profile offering.

The company is expected to start trading on the Nasdaq Stock Market on July 29, under the ticker HOOD.

For users, the max share is at $50.40, which results after adding a 20% buffer on the highest price in the range. Users’ orders remain valid if the final price of the IPO is within this 20% range. If the price moves outside the 20% buffer or is above the max share price, the trader will need to reconfirm its request – all of it through the app.

CEO and Co-Founder, Vlad Tenev said during the live-streaming event, “We anticipate this will be one of the largest retail allocations ever.” 

“At Robinhood, the rich don’t get a better deal” is one of the company’s mottos.

Regarding its controversial revenue-making practice of “payment for order flow” (PFOF)— under which Robinhood receives fees from market makers like Citadel Securities for routing orders to them —, CFO Jason Warnick, said, “If a ban or other limitations on it were to be imposed, we believe Robinhood and the industry would adapt and explore other revenue sources.”

Beyond the fees by routing its users’ orders — about 81% of its revenue; Robinhood receives an average of 2.5 cents for every $100 traded —, another source is Robinhood Gold membership, which gives clients access to investment tools and margin loans for $5 per month. There is also stock and cash interest.

The business model of PFOF is being scrutinized by the SEC amid concerns that it creates a conflict of interest because retail traders aren’t getting the best trading execution available.

Another announcement during the webcast is that Robinhood Markets Inc is considering launching U.S. retirement accounts, like IRAs and Roth IRAs, which would allow Robinhood to tap a gigantic market. Currently, there are $12.6 trillion in IRAs.

Investment Retirement Accounts attract long-term investment, setting tax penalties when withdrawing money.

“We are interested in building more account types, including IRAs and Roth IRAs, we’ve been hearing that a lot from our customers. We want to make first-time investors into long-term investors,” Tenev said.

Robinhood was founded in 2013 by Vlad Tenev and Baiju Bhatt, at that time roommates at Stanford University. They will hold two-thirds of the voting power after the IPO, as the prospectus showed.

Some experts have warned about Robinhood’s revenue models, regulatory practices, and exaggerated valuation based on a price/sales ratio of 26.

Today, Robinhood is the third-largest brokerage firm based on the number of funded accounts, right behind Fidelity and Charles Schwab (which purchased TD Ameritrade in 2020).

However, its CEO is not licensed by FINRA as a registered investment advisor.

This is the Q&A at the roadshow virtual session.

 

• IBL News, July 3: Trading App Robinhood Files Its IPO, Targeting a Valuation of $40B

IBL News | New York

Thoma Bravo-controlled Instructure Holdings Inc., the owner of the leading Canvas LMS, announced yesterday the terms of its initial public offering (IPO) in an amended prospectus filed to the SEC.

Private equity firm Thoma Bravo is offering 12.5 million shares of its common stock. The IPO price will be between $19.00 and $21.00 per share.

This would allow the company to raise net proceeds of about $228.1 million at a $20 midpoint. That funding would help cut its debt: $778 million in the long term. Educational consultant Phil Hill wrote that “this is a move by Bravo to manage the debt the company took on as part of the purchase.”

After the offering, Thoma Bravo will own around 87% of the stock. “As a result, we expect to be a “controlled company” within the meaning of the corporate governance standards of NYSE,” said the company in the prospectus.

Utah-based Instructure’s (NYSE: INST) expects to be valued at up to $2.91 billion, according to MarketWatch. In March 2020, private equity firm Thoma Bravo took Instructure private in a deal valued at about $2 billion.

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.

Thoma Bravo acquired Instructure in March 2020 and it had -36% operating margins. Taking public a year later with +31% operating margins. Why is there no mechanism to have this value creation occur in the public markets? Seems like a ripe area for activism

— Viggy Krishnan (@viggy_krishnan) July 13, 2021

IBL News | New York

MIT and Harvard’s sale of edX.org to 2U for $800 million continues to dominate the conversation on higher education. New views in favor and against are expressed through articles and forums.

Paul LeBlanc, President of Southern New Hampshire University (SNHU), one of the largest universities in the U.S., wrote a column on Forbes titled “What 2U’s $800 Million Deal to Acquire edX Means for Higher Ed”.