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K-12 Dealmaking: GoGuardian Receives Infusion of $200 Million; Lightspeed Ventures Funds Gaming Startup

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Classroom management and ed-tech product provider GoGuardian recently raised $200 million from Tiger Global Management, putting GoGuardian’s value at over $1 billion, according to an announcement.

“We are excited to partner with GoGuardian, with its industry-leading product offering and best-in-class growth at scale, margins and retention characteristics, as the company cements its position as a true end-to-end SaaS platform for K-12 schools,” Tiger Global partner John Curtis said in a statement.

Based in Los Angeles, GoGuardian provides a product suite that seeks to allow districts to unify their filtering, classroom management, device management, and school mental health tools into a single point of contact.

Over the past year, GoGuardian says its customer base grew by 60 percent to include more than 10,000 schools, including 23 of the top 25 largest U.S. districts.

The Tiger Global investment is intended to support GoGuardian’s growing suite of products, as the company plans to use the money for product innovation, hiring, and business development, according to the announcement.

Class Technologies Scores $100 Million Investment from SoftBank. Washington, D.C.-based Class Technologies, which develops digital teaching and learning tools that integrate with Zoom, has received a $100 million investment from SoftBank to help the company’s global expansion efforts, co-founder Michael Chasen wrote in a July 28 blog post.

The company, which made headlines earlier this year with high-profile investments from famous NFL quarterback Tom Brady among other contributors, is “committed to delivering Class to some of the most disadvantaged and hard to reach populations in the world,” Chasen wrote.

Class has already expanded to several countries outside the U.S., and has been fielding inquiries from schools, universities and companies “all over the world” who want to add educational tools to Zoom, Chasen said.

Past investors include Salesforce Ventures, Sound Ventures, and veteran talent executive Guy Oseary.

Class has raised over $160 million since it launched in September, according to an announcement.

Children’s Gaming Startup Raises Pre-Seed Funding from Lightspeed and Y Combinator. Wilmington, Del.-based live game streaming platform Kalam Labs on Aug. 13 announced a pre-seed funding round from Lightspeed and Y Combinator.

Kalam Labs plans to use the money to develop fun and immersive virtual missions for kids ages 6-14 to learn STEM topics, according to an announcement.

“The 2020s kids have been born directly into the age of iPhones, Netflix and Google. It is impractical to make them sit in front of a blackboard or a Zoom Class expecting them to remember irrelevant information,” Kalam Labs co-founder Ahmad Faraaz said in a statement. “Education is undergoing a generational change and we plan to be at the forefront of building products that will accelerate this shift.”

Kalam Labs launched in June, has drawn thousands of paying students, and is growing its user base 50 percent weekly, the company claims.

The firm said its games’ live video and chat functions make them games suitable for the education sphere. A typical Kalam Labs session involves a live instructor taking a group of students through a virtual world while explaining STEM topics via game-based exercises and providing the “right nudges” along the way, the announcement says.

“Having seen hundreds of pitches in education over the years, we thought the approach Kalam Labs had for K-12 was one of the most interesting and fresh,” Lightspeed partner Hemand Mohapatra said in a statement. “We are excited to back the Kalam team as they take on this ambitious challenge.”

Higher-Ed Accessibility Platform Raises $650 Million. Singapore-based Emeritus recently received $650 million in Series E funding.

U.S. venture capital firm Accel and SoftBank Vision Fund 2 led the investment, which brings Emeritus’ valuation to $3.2 billion, four times higher than the company’s Series D valuation reached in August 2020, according to an announcement.

Emeritus collaborates with over 50 universities across the U.S., Europe, Latin America, Southeast Asia, India, and China, to make higher education accessible to consumers, companies, and governments. The company offers short courses, degree programs, professional certificates, and senior executive programs, and claims to have educated over 250,000 people across 80 countries.

The latest investment round follows Emeritus’ recent $200 million acquisition of global K-12 STEM education company iD Tech, which expanded Emeritus into the K-12 space.

“The unbundling of higher education and continued learning has only just started,” Accel partner Anand Daniel said in a statement. “We believe that the platform and deep partnerships with the world’s best universities puts Emeritus and its partner universities at the forefront of this revolution in higher education.”

Emeritus will channel the investment into working with university partners to develop new courses, create new products and industry education content, expand its offerings for governments and companies, and close more acquisitions, the announcement says.

The investment also saw participation from the Chan-Zuckerberg Initiative, Leeds Illuminate, Prosus, Sequoia Capital India, and Bertelsmann.

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Broad Congressional Proposal Would Raise Data Privacy Bar for Ed-Tech Companies

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Broad Congressional Proposal Would Raise Data Privacy Bar for Ed-Tech Companies

A recently released congressional proposal would trigger a swath of new requirements for how ed-tech companies handle K-12 student data they collect, and establish an independent auditing process for their data protection practices.

The drafter of the proposed measure, Rep. Lori Trahan, D-Mass., is seeking input from ed-tech companies and other members of the K-12 community on what language should ultimately be included in final legislation she plans to introduce later this year.

The proposal suggests limiting usage of student data collected by education businesses in several ways, including prohibiting targeted advertising involving students’ personal information, and banning the sale of student data except in cases of company acquisitions and sales of test-score reports for college recruitment.

Trahan presented the proposed language to allow commercial transactions for test score data as one of several points of discussion for parents, educators, students, and industry, as her office works to craft a final bill sometime around early winter, she told EdWeek Market Brief in an interview.

Sale of test score data can be a contentious issue.

Privacy advocates often argue that assessment companies don’t thoroughly inform students and parents when selling data to colleges and scholarship providers. On the flip side, some civil rights advocates  assert that colleges’ purchases of test score data are useful for enrolling students from low-income school districts who may get overlooked by traditional recruitment efforts, Trahan noted.

“I believe that we can strike a thoughtful balance, and making this a point of discussion as we work on an updated draft of the legislation is key to achieving that,” she said.

Commenters have until Oct. 31 to provide input for final legislation to be introduced later this year.

In addition to prohibiting certain uses of student data, the draft legislation also outlines several allowable cases of student data disclosure for companies, including to ensure legal and regulatory compliance, participation in the judicial process, and research purposes allowed by federal or state law.

Trahan wants companies to share their views on the issue of allowable disclosure, including their experiences navigating state laws that trigger disclosure of student information, she said.

Small and midsize companies should also comment on the draft’s provision to establish “technology impact assessments” that examine the student-data collection practices of ed-tech companies, Trahan said.

The draft would task the Federal Trade Commission with organizing a process for technology impact assessments to be conducted by independent auditors of any education company deemed to host “high-risk” platforms for student data protection purposes.

Defining “High-Risk”

The draft bill defines several criteria for what would constitute “high-risk.”

Those  criteria include software platforms that pose a significant risk to privacy or security of students; store personal student information regarding race, national origin, political opinions, religion, sexual orientation, and criminal convictions; and, platforms that present the possibility of an inaccurate, unfair, biased, or discriminatory decision that impacts a student.

The independent technology impact assessments would be required to describe the data that companies collect, provide a risk analysis considering harms to students, discrimination, and accessibility; and, explain companies’ risk mitigation processes.

The draft bill identifies the provision for independent auditors to conduct technology impact assessments as a point of discussion for K-12 stakeholders to have in the leadup to a final bill.

Ed tech, including artificial intelligence-influenced ed tech, is not subject to the same certification requirements as other critical industries, such as the legal and accounting professions, which require many practitioners to undergo continuing education and outside auditing processes, Trahan said.

“Ideally, legislation like ours could provide the incentive to scholars and standards-making bodies to create a certified [ed tech] industry,” she said. “But you don’t arrive there until you hear from small and midsized companies so that we can understand the burden that may come with them hiring potentially expensive, and currently uncertified auditors.”

Though the draft bill  has not been formally introduced in Congress yet, Trahan hopes to work across party lines, as well as with lawmakers interested in relevant tech topics like AI, as her office draws up final legislation. Twenty-seven House lawmakers compose the bipartisan Congressional AI Caucus.

The draft measure is “extremely comprehensive,” and the public participation process will allow the K-12 community to address any potential gaps they might see in the legislation, said Ariel Fox, senior counsel for global policy at Common Sense Media.

Fox lauded the proposal for  establishing a formal process for external audits of companies’ data protection practices. In recent years, such provisions have generally been left out of ed-tech legislation proposed within the U.S.

The impact assessment provisions draw from language embedded in the EU’s General Data Protection Regulation, or GDPR, and the UK’s Age Appropriate Design Code. Both of those regulations direct companies covered by the regulations to deeply vet how their software impacts users’ privacy.

“A concept that we see a lot in international laws is this notion that companies should really take a hard look at what they’re doing with data, what they’re collecting, why they’re collecting it,” Fox said. “It’s exciting to see that in her proposal as well.”

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Spending on Tech-Based Curriculum Jumps During the Pandemic, New Survey of IT Leaders Finds

spending on tech based curriculum jumps during the pandemic new survey of it leaders finds
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K-12 curriculum software and subscription spending grew at a higher rate than any other technology budget area for school districts last school year, as their IT budgets mostly increased from the previous school year.

In a survey of 170 district technology leaders by the Consortium for School Networking, 62 percent of participants reported their schools’ funding for curricular software/subscriptions rose between the 2019-2020 and 2020-2021 school years, with 56 percent also noting a spike in cybersecurity investment.

Another 56 percent of respondents said their district’s overall IT budget expanded, with 12 percent citing a “major” increase, according to a summary of the report.CoSNGraph

District technology leaders ranked cybersecurity as the top unmet technology need, followed by home access connectivity and interoperability.

“In a situation where even well-funded corporations in the private sector struggle to address cybersecurity issues, poorly funded districts are at a disadvantage,” CoSN said. “One respondent called the need for more cybersecurity funding as ‘desperate.’”

Cybersecurity has been a focus area for CoSN, which is one of several organizations that endorsed the Enhancing K-12 Cybersecurity Act. That bill would set a path for the federal government to guide best practices for K-12 cybersecurity and provide cybersecurity grants to schools that could benefit certain education companies.

Congressional lawmakers have not acted to advance the bill.

Big Investments in Hybrid Learning

In addition to greater curricular software and cybersecurity spending, the majority of those surveyed also noted new technology initiatives, with 64 percent saying that they added classroom technology to support simultaneous hybrid learning, such as rotating cameras, microphones and speakers; and 60 percent reporting that they now offer a remote-only instruction option.

Further, 37 percent of tech chiefs said they added “district-wide student-facing Cloud-based applications,” such as learning management systems, to their digital ecosystems, and 23 percent of districts gave devices or extra monitors to educators for home use.

Only 2 percent of participants reported not supporting new IT initiatives or existing IT efforts that weren’t already supported pre-pandemic.

Almost all district leaders are looking to the federal government for technology funding help.

About three-quarters of those questioned plan to request support from the Federal Communications Commission’s Emergency Connectivity Fund for Wi-Fi hot spots, while 90 percent of respondents said infusions provided through three stimulus bills enacted over the last 17 months significantly helped remote-learning or related IT initiatives in their districts during the pandemic. (See EdWeek Market Brief’s recent, nationwide survey showing how district officials plan to spend the new, $7 billion connectivity fund overseen by the FCC.)

The three COVID stimulus packages heaped an overall $189.5 billion financial windfall on U.S. K-12 schools. Districts have until Sept. 30, 2024, to commit the last bit of that money.

Compared with the CoSN review, a recent EdWeek Market Brief survey found a slightly lower percentage – 62 percent – of 280 district administrators interviewed, planned to seek ECF reimbursement for Wi-Fi hot spots for home use. However, the CoSN survey did not specify that the hot spots sought for reimbursement pertained only to home use.

“There is a marked shift in how school district IT leaders are preparing for this fall, compared to the back-to-school survey results from last year,” CoSN CEO Keith Krueger said in a statement. “While the federal government delivered critical funding when school districts needed it most, we must now invest in cybersecurity and ensure sustainable, secure and equitable home broadband access for students and educators into the future.”

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Graph provided with permission from the Consortium for School Networking


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Pace of Mergers and Acquisitions in Education Market Jumps, New Analysis Finds

pace of mergers and acquisitions in education market jumps new analysis finds
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The total value of mergers and acquisitions in the education industry grew by more than 50 percent from the second half of 2020 to the first half of this year, as companies across the market rushed to add to their portfolios, according to a report by investment banking firm Berkery Noyes.

The overall number of individual M&A transactions also rebounded to pre-pandemic levels.

Education companies closed 240 acquisitions in the first six months of 2021, up from 222 deals in the second half of 2020, and 210 mergers in the first half of last year. There were 238 acquisitions in the education industry in the second half of 2019.M&AGraph

The total value of education acquisitions from January through June was $19.4 billion, largely driven by Platinum Equity’s $6.4-billion acquisition of McGraw Hill, the report noted.

Deals made during this period had nearly as much value as mergers and acquisitions for the full year of 2020, when they totaled $21.4 billion.

The investment group, which provides advice and financial consulting to middle-market companies in the technology and information sectors, tracked 1,152 education deals between 2019 and June 2021.

Private equity financed 40 percent of acquisitions during the first half of this year, 8 percent higher than the 2019-2021 overall average.

According to Berkery Noyes, 97 of the 240 deals during this time frame were financed by private equity, venture capital, or some other investment firm, the most in at least three years and a 131 percent increase over the first half of 2020.

Twelve deals in the first half of this year carried values of more than $100 million, and at least seven of those involved the K-12 sector. About one-third of the total transactions had values between $4.5 million and $54.6 million.

K-12 media and tech surpassed professional training services as the education industry’s most active market segment year-to-date.

There were about 50 acquisitions that involved professional training services and roughly 40 deals that involved K-12 media and tech in the second half of last year, while nearly 60 deals touched K-12 media and tech and about 45 deals covered professional training services in the first half of 2021.

The report showed a mixed picture for market activity in various segments for the first six months of this year compared with the second half of 2020.

The rate of deals in the childcare services and higher-ed media and tech spaces increased during this span, but the number of deals in professional training technology, higher-ed institutions, and K-20 services fell. Deals involving K-12 institutions remained stable.

In addition to the McGraw Hill acquisition, notable K-12 deals in the first half of 2021 included a Byju’s purchase of Indian tutoring provider Aakash Educational Services for $900 million, Renaissance’s $650 million acquisition of Nearpod, and Kahoot’s $435 billion addition of K-12 single-sign-on provider Clever.

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Congressional Bill Aims to Incentivize Education Companies, Schools to Sharpen Cybersecurity

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A bill recently introduced in the House would help define best cybersecurity practices for K-12 vendors and outline new spending that could benefit certain education companies focused on online safety.

The Enhancing K-12 Cybersecurity Act, introduced June 17 by Rep. Doris Matsui, D-Calif., would task the Department of Homeland Security with establishing a program to circulate K-12 cybersecurity best practices, training, and lessons learned, and with recommending online safety tools for purchase by state education agencies and school districts.

The bill calls on DHS to consult with school IT vendors and cybersecurity companies in putting together the list of best practices.

Doug Levin, the national director for the K12 Security Information Exchange is lobbying for the Matsui bill, expects significant regulatory action at the federal and state levels around K-12 cybersecurity, though it’s difficult to say exactly when that will happen. The K-12 Security Information Exchange operates the K-12 Cybersecurity Resource Center, an online database that tracks K-12 cybersecurity incidents.

The House bill could face a steep climb to become law, as the House Education and Labor Committee currently has no plans to consider the measure, and companion legislation has yet to be introduced in the Senate.

Lawmakers failed to vote on a similar bill introduced in 2020, before the previous congressional term ended in December.

Schools are relying more on technology for remote learning, and policymakers are seeing the need to start imposing baseline internet safety expectations for school districts and vendors, he said.

With cybersecurity policies likely to tighten, school districts and government agencies will increasingly look toward education companies that have already crafted and adhere to a set of best practices for cybersecurity, Levin said.

If passed, the federal bill charts the creation of a DHS-run database that would recommend security tools and services for schools to purchase, and allow schools and states to find and apply for funding opportunities to improve cybersecurity.

H.R. 4005 doesn’t spell out how the money would be dispersed, so the federal government would likely issue further guidance on expenses that might qualify for any cybersecurity grants issued, if the legislation is enacted, Levin said.

In addition to defining best practices and outlining new channels for K-12 cybersecurity funding, the legislation proposes the development of a voluntary registry of K-12 cyberattack incidents, and would require yearly DHS reports analyzing cyber incidents across all levels of K-12.

Information to be collected into the registry may include descriptions of the incidents’ size, and whether each incident was the result of a breach, malware, distributed denial of service attack, or other method designed to cause a vulnerability.

“The bill certainly is responsive to the needs that members of Congress have been hearing from the field,” Levin said. “School districts are feeling under assault from ransomware.”

Levin has compiled data showing that many cyberattacks have targeted teacher and student data stored by education companies, not just within schools.

According to the K12 Cybersecurity Resource Center’s most recent annual report on the state of K-12 cybersecurity, at least 75 percent of all data breach incidents affecting public K-12 school districts resulted from occurrences involving school vendors and other partners.

The Federal Trade Commission has ratcheted up its focus on data breaches in K-12 recently, signaling a stricter enforcement posture toward companies that collect data on K-12 students and teachers.

Organizations endorsing the Enhancing K-12 Cybersecurity Act include the National Association of Secondary School Principals, the National Association of Elementary School Principals, the Council of Chief State School Officers, the National Association of State Chief Information Officers, the State Educational Technology Directors Association, and the Consortium for School Networking.

“As cyber criminals grow more sophisticated and aggressive, we must provide the resources and information necessary to protect our schools,” Matsui said in a statement. “The Enhancing K-12 Cybersecurity Act provides a roadmap and prepares our cyberinfrastructure for the threats of tomorrow.”

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In Their Own Words: What Students Want From Ed-Tech Products

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EdWeek Market Brief talked with two tech-savvy students about where digital products meet their needs, and fall short.

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How One Company Adapted Its PD for COVID and Beyond: A Case Study

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Achieve3000’s efforts during the pandemic offer a window into how education businesses have sought to overhaul support for teachers to suit virtual environments.

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A Changed K-12 Market: What Education CEOs See on the Horizon

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As students in many states return in person to classrooms, executives of education technology companies say they are dealing with a market that has been altered in a number of key ways.

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Why Do Ed-Tech Products Soar in Some Districts, But Flop in Others?

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The EdTech Genome Project aims to give districts more accurate, granular comparisons of what ed-tech products work in what kinds of schools.

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How School Districts Will Spend Money From the New Federal Stimulus

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How will K-12 districts spend federal stimulus funding?

School systems are expected to have broad latitude to spend money from the American Rescue Plan on classroom and non-academic needs.

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