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.
As every week, we’ve got three shots for you. Peer lending and student loan related services continue to make the news, vertical deal sites for university students in the US and Africa attract investors and buyers alike, and the text messaging war is heating up.
Lending Club Acquires Springstone, Tuition.io Raises new Funding
Over the past couple of weeks we covered a lot of news items in the peer-to-peer lending and student loan space. Lending Club, which is expected to announce its IPO this year, acquired Springstone Financial for $140 million, raising $115 million in debt and venture capital to finance the deal. Springstone is a financer of private education and elective medical procedures.
Tuition.io now manages over $1 billion in student loans and raised an undisclosed amount from investor Raj Date. He states that the student loan market is profoundly broken and that student need help to better manage their debt, which is of course the reason why he invested in Tutition.io.
While services like Lending Club, SoFi or CommonBond aim to become the banks of the future based on communities and trust, services like Tuition.io, SimpleTuition and Credible aim to educate loan takers to take better decisions, to keep track of their commitments and to help them to find the best deals.
All of them plan to or already extended their services into related verticals, from mortgages to personal and business loans.
Vertical Deal Sites for College and University Students
After the Groupon hype has settled, new players that focus on vertical markets and demographics seem to gain traction. Chegg which currently still is in transformation to become the go-to place for students has acquired Campus Special, a deal site that offers college students coupons and specials for food. It’s a pretty interesting business with an innovative internship program that drives the growth. The startup will be rebranded to Chegg Campus Deals. Chegg already entered the daily deal space in 2011 through a partnership with white label provider Group Commerce.
In Nigeria UniSmart is offering deals to university students, either on the Internet or from local merchants. Other than Campus Special, UniSmart covers everything a student might be interested in, from clothing over food to travel and leisure time. The startup just entered Savannah Fund’s accelerator program which goes along with $25k in seed funding.
West Corporation acquires SchoolMessenger
SchoolMessenger has been offering mass communication services for the K-12 space since 1999. Whereas up and coming competitors like remind101 and ClassDojo target the end user, namely teachers, directly through offering their service for free, SchoolMessenger sells its more complex infrastructure to schools or entire districts.
We see these two approaches not only in the communication space but also in the MOOC world. 2U which recently had its IPO follows the classic model of taking over entire campuses, investing a lot of money but in return it gets long term, and hopefully lucrative, contracts.
While smaller startups that don’t rely on heavy infrastructure can move faster and pick up trends more quickly, they tend to have problems when it comes to loyalty of users or, more importantly, generating revenue. There is a chance that remind101, ClassDojo and other popular apps will end up in an acquisition by established players with deep pockets. I am sure Pearson already has a list in a drawer somewhere and through Learn Capital they are already investors in ClassDojo.
Picture by Jonno Sea via Flickr