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IBL News | New York

2U, Inc. (Nasdaq: TWOU) announced yesterday it completed its acquisition of edX Inc, the MIT and Harvard-created non-profit educational platform, sold last June by $800 million in cash. Now, edX will operate as a public benefit company property of 2U.

Along with the closing of the business, 2U decided to eliminate all membership and annual fees for current and future edX Consortium members — 230 in total, including 19 top universities — as a measure to keep them on board.

• Anant Agarwal, CEO at edX and professor at MIT, decided to join 2U after being named for a new executive position: Chief Open Education Officer. He will report to 2U’s CEO, Chip Paucek, and “will continue to steward the edX mission as part of 2U’s executive team.”  [Both in the picture, above]

Moreover, the announcement indicated: “Anant Agarwal will serve as one of 2U’s representatives on Open edX’s new Technical Oversight Committee, responsible for guiding the technical direction and vision of the open-source platform and community to support learning outcomes around the world.”

• edX Chief Technology Officer JP Beaudry was appointed Chief Technology Officer at 2U, succeeding former CTO James Kenigsberg.

• edX VP of Product Lauren Holliday was appointed Managing Director of Open Courses & Marketplace at 2U.

As part of the closing, 2U and edX also announced, without further detail, “a marketing campaign this week to expand the reach of edX partner organizations”, as well as “a million dollars in funding to support the production of 10 new free courses in Essential Human Skills for the Virtual Age to be developed by the edX partner community.”

In addition, “edX partner Boston University has committed to launching a new disruptively priced Master of Public Health degree.”

2U reported that “more than 25 2U partners are joining the edX Consortium and committing to contribute affordable, high-quality learning to edX.org, including Howard University, London School of Economics and Political Science, Morehouse College, Syracuse University, UC Davis, the University of North Carolina at Chapel Hill, Vanderbilt University and others.”

The Lanham, Maryland – based company reinforced its commitment to “contribute to the ongoing development of the open-source platform Open edX.”

As part of the PR campaign, Chip Paucek and Anant Agarwal wrote a shared blog post titled “Potential, Unlocked.”

IBL News | Madrid, Spain

A private university in Spain opened this month campus in a skyscraper in Madrid, as shown in the picture. The inauguration took place last week.

IE University’s new campus will host 3,800 undergraduate students in the IE Tower, a modern, high-tech, sustainable building that resembles, only in shape, the United Nations headquarters in New York.

The building looms large amid four other corporate skyscrapers populated by executives from PwC, KPMG, and other global corporations.

For IE University, a school that teaches in English and has been operating as a business school for over four decades, the 180-meter tall tower is a landmark achievement. Spain’s national and Madrid’s regional governments shared this view.

This building, visible all over Madrid, Spain, occupies 35 floors filled with 64 classrooms, 50,000 square meters, and 7,000 square meters of green space.

It includes exhibition halls, a creativity center, a sports zone with swimming pools, and even a meditation room. The classrooms are equipped with technology to simultaneously deliver face-to-face and online sessions.

The IE Tower expects to house 6,000 students within five years.

The owner of the IE University [in the picture below] is a prominent, well-connected to the Monarchy, Spaniard entrepreneur and art collector Diego del Alcázar, 71. He privately funded the school 48 years ago. Today his 37-year-old son, Diego de Alcázar Benjumea, operates as a Vice President.

 

 

 

 

 

 

 

IBL News | New York

Harvard University’s mythical endowment — the largest endowment in the world — grew even beyond the most favorable expectations this year, despite the pandemic.

Harvard’s annual financial report for the fiscal year ended June 30, 2021, showed that its endowment increased from $11.3 billion to a breathtaking $53.2 billion, a 27% growth.

In addition, in the same fiscal year, the university operations yield a $283 million surplus. In 2020, the institution’s budget showed a $10 million operating deficit.

The fact that the university — an institution with around $5.5 billion in revenues — was forced to send students home in March 2020, beginning more than a year of remote instruction didn’t damage its financial health.

In their annual report letter summarizing the year, Thomas J. Hollister, Vice President for Finance and CFO, and Paul J. Finnegan, Treasurer, observed that “Harvard’s finances ended the year in a dramatically improved position compared to initial budget assumptions.”

The net decrease in revenue, 5 percent during the two-year period, was half what University administrators feared. Total student income decreased nearly $200 million in fiscal 2021 (17 percent) to $888 million.

Overall, Harvard emerged stronger from the pandemic, better positioned to educate and conduct research in the future, Harvard Magazine writes.

To make things better, Harvard Management Company (HMC) recorded a 33.6% investment return on endowment assets during fiscal 2021, up from 7.3% in the prior year. That was the highest return recorded since the 43.6 percent achieved in fiscal 1983 (during a period of declining interest rates and recovery from a recession) and 32.2 percent in fiscal 2000 (during the dot.com boom).

Endowment investment returns for the year totaled a staggering $12.8 billion. That sum eclipsed the traumatic $11-billion loss recorded in fiscal 2009, during the financial crisis and Great Recession, and handily outpaced the $9.6 billion realized from all sources and for all uses by Harvard Campaign, which concluded in June 2018.

“The true heroes for Harvard in fiscal 2021 were supportive donors, past and present,” said the report. The endowment distribution for operations increased about 2 percent, to just over $2 billion. And gifts for current use surged $63 million (13%) to $541 million, although some of this reflects a swing in payments to Harvard from its affiliated hospitals.

•

The Harvard Management Company (HMC) recognized that the endowment’s robust return took place in a context of economic recovery, which led to 40-plus percentage-point gains in U.S. stock indexes during the fiscal year of 2021. “Those conditions also prompted a deluge of initial public offerings by new companies at eye-popping valuations (rewarding the venture-capital and private-equity funds that had underwritten them: investment managers to whom large endowments often allocate sizable shares of their assets).”

The Wilshire Trust Universe Comparison Service, a standard analysis of institutional investments, reported the best overall results in 35 years, with median returns of more than 33 percent for large foundations and endowments. That was nearly ten times the median return of 3.4 percent for fiscal 2020.

Extraordinary performance in equity investments drove the results of the endowment. HMC’s managers achieved 50 percent returns on public equities (14% of HMC’s assets). Even better were the 77 percent returns on private equity (34 percent of assets, the largest single allocation).

The large shift toward private equity reflects, to some extent, N.P. Narvekar’s — CEO at Harvard Management Company — focused move in that direction since fiscal 2018 (with a related sharp reduction in the real-estate and natural-resources portfolios).

Other changes in allocation—such as the sharp decrease in public equity, where HMC’s external managers continued a multiyear record of significantly outperforming market benchmarks—were implemented following Harvard’s risk parameters, as well.

 

• Harvard University financial report
• Harvard Gazette Q&A on Harvard’s finances and operations with executive vice president Katie Lapp and Tom Hollister.

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IBL News | New York

Veritas Capital, the private equity firm that will own Blackboard after its acquisition from another investment company, Providence Equity Partners, avoided providing any details about the deal yesterday. The New York-based firm didn’t even mention the purchase on its website.

The move, performed in a context when EdTech companies are largely increasing their valuation and capital raising, wasn’t a surprise.

Providence Partners has been trying to sell Blackboard since 2015, after noticing the Blackboard was increasingly losing ground in the market in favor of Instructure’s CanvasLMS.

Precisely, yesterday the Cal Poly Pomona’s student newspaper posted an eloquent article titled “Canvas adoption erases Blackboard from campus.”

Consultant Phil Hill wrote that it was “the end of Blackboard as standalone EdTech.”

The Washington, DC – headquartered company that invented the LMS and overwhelmingly dominated the market for years was absorbed by a firm half of the size, Anthology, which was engineered mostly for financial purposes.

Roughly speaking, and without further confirmation, the dominant speculation is that Blackboard was valued at below two billion dollars, given its struggle with the accumulating debt. Providence Equity Partners paid $1.64 billion to buy Blackboard in 2011. Exiting the company has taken them ten years.

Meanwhile, Veritas Capital-backed Anthology, valued at $925 million last year, according to data provider PitchBook, seems to be the winner. Its CEO will run the merger company, while Blackboard’s Chief won’t play any managerial role, according to several sources.

The deal is pending official approval, and it’s soon to tell how and when the venture capitalists —who run the EdTech market show — will convince retail investors to back this new venture.

 

IBL News | New York

The private equity firms that currently own Anthology, Veritas Capital, and Leeds Equity Partners, will acquire the majority of shares of Blackboard Inc. from Providence Equity Partners LLC investment company for an undisclosed amount.

With that equity stock, Veritas Capital and Leeds Equity Partners will create a merged company, which will be lead by Jim Milton, current Chairman and Chief Executive Officer of Anthology.

The combined company (as yet unnamed), valued at about $3 billion dollars including debt, will be majority-owned by Veritas Capital.

Providence Equity Partners — which bought Blackboard in 2011 for $1.64 billion — will hold a minority stake in the combined company. The transaction is expected to be closed by the end of 2021, subject to customary closing conditions and regulatory approvals.

“Once the deal closes, Blackboard will no longer exist as a standalone EdTech company,” wrote expert Phil Hill on its blog.

The merge of Anthology and Blackboard will result in one of the industry’s largest LMS management firms, with a workforce of 4,000 employees and over 4,000 colleges and universities as clients.

Anthology — which is the recent gathering of Campus Management, Campus Labs, and iModules — accounts for 2,000 higher ed institutions in 30 countries.

Blackboard claims it currently serves 150 million users in 80 countries.  For years, Blackboard was the dominant provider of learning management systems (LMSs) until Canvas LMS surpassed it.

“Upon the completion of this merger, we will have a data-driven product portfolio that seeks to touch every constituent at the institution and will aim to transform the way education uses technology to engage, connect, teach, learn and drive efficiencies across the institution,” Milton said. “We are fully aligned around a deep focus on learner success.”

“Together, Blackboard and Anthology will lead the next wave of EdTech innovation,” said Bill Ballhaus, Chairman, Chief Executive Officer, and President of Blackboard.

According to Bloomberg, the resulting company will be valued at several billion dollars. A Bloomberg reporter was told that Blackboard was valued at $2 billion and Anthology at $1 billion.

and it all comes full circle for me. Although I’m told BB was valued close to $2 bln time around with Anthology closer to $1 bln https://t.co/CZzbqHXwoj

— Liana B. Baker (@LianaBaker) September 13, 2021

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.