EDUKWEST Monday Ristretto

Monday Ristretto: Independence, Consolidation and Brick and Mortar

To get you up to speed for the week ahead, we serve you a Monday Ristretto here on EDUKWEST by picking the most important reads from the past week, putting them in a grinder and extracting the essential information for a short and punchy brew.

Today we’ve got three shots for you. Quora trying to stay independent by raising another $80 million, legacy players in the programming space consolidating the market and brick and mortar classrooms having a comeback.

Quora raises $80 million Series C in its quest to stay independent

Quora, the popular question-and-answer site, is on a mission to become the library of Alexandria of the digital age. Already the second biggest platform of crowdsourced information on the Internet, Quora does not want to end up as a juicy acquisition target, especially in times when a Mark Zuckerberg is on shopping tour. And a Q&A platform would actually fit in the Facebook ecosystem pretty nicely.

To prevent this from becoming a reality, Quora added another $80 million to its bank account even though, according to the team, they did not burn through the last $50 million yet. With the valuation being around $400 million in the previous round and now being estimated at $800 million by Forbes it would still be in the range of a Facebook acquisition.

Zuckerberg paid $1 billion for Instagram, $2 billion for Oculus VR and $19 billion for Whatsapp. So if he really wants to add Quora to the portfolio he could offer something in the range of $2 billion to $3 billion and none of the investors would think twice. Maybe this is not about staying independent at all but to get a big payday for a service that is popular, however farfrom generating noteworthy revenue.

lynda.com and Pluralsight Acquisitions

Pando calls them MOOC’s older siblings that rise to take the online education throne. You could also call them real businesses as both lynda.com and Pluralsight have managed to generate significant revenue from online course offerings in a time when their smaller competitors from the startup world struggle to do the same.

Shortly before lynda.com raised its massive $100 million round it had generated $70 million in yearly revenues and Pluralsight doubled its revenue from $16 million in 2012 to $32 million in 2013. Therefore, lynda.com’s $20 million acquisition of Compilr and Pluralsight’s $45 million acquisition of Digital-Tutors don’t make a big dent in their bank accounts but add very valuable assets to both companies. Assets that startup competitors now either need to create from scratch in order to stay competitive or try to find even smaller providers with those features to acquire.

Brick and Mortar Classrooms: Don’t call it a Comeback

Though companies like lynda.com and Pluralsight show that there is significant money to be made with courses that are entirely delivered online, we also see the opposite trend of location based courses attracting more and more interest.

In emerging markets, like India, there is still a strong perception that classroom based learning is superior to online learning, and therefore startups like EduPristine or SkyFi Labs can raise sizeable amounts of money for brick and mortar based courses.

In North America and Europe we don’t seem to be sure. On the one hand you have a ton of edtech startups that offer their courses entirely online. Then you have hybrids like General Assembly which just raised $35 million, startups like Skillshare raising $6 million and flipping its approach from mainly offline to dominantly online, and startups like the Flatiron School which raised $5.5 million for its brick and mortar coding bootcamp. Here it does not seem to be about quality issues anymore but the conscious decision to leave the house, get among people and learn together which in the end is a far stronger motivator than the perceived quality of the course content.


Picture by Jonno Sea via Flickr

Kay Alexander is the co-founder and creative director of EDUKWEST. You can follow him on Twitter, Facebook or Google+

  • Reddy

    Nice consolidation of the Lynda/PluralSight and SkillShare/Flatiron , Thanks for the nice summary