15 Nanotechnology Companies Getting Funding In 2018

So far, there have been fewer home-run funding deals than last year. But for the U.S. edtech industry, that’s no big deal: In the first six months of 2018, 62 companies raised $739 million in venture capital.

This year’s first-half funding total marks a lull from the same period in 2017, which totaled $887 million spread across 58 deals. That number was fueled largely by three gargantuan deals—EverFi ($190 million), Hero K12 ($150 million) and Grammarly ($110 million)—that accounted for more than half of that total. (The full-year tally for 2017 reached $1.2 billion.)

U.S. edtech funding, 2011 - 1H 2018

By contrast, just one U.S. edtech company has hit the nine-figure mark in 2018: a $110 million round for Connexeo, a provider of administrative payment software for schools and community institutions. The next biggest fundraise is a $55 million round for CampusLogic, a college financial aid platform. That’s followed by a trio of companies: tutoring marketplace Varsity Tutors, student loan service Commonbond and bootcamp provider Trilogy Education, which each raised $50 million.

Top U.S. edtech funding deals, 2018 1H

Rounding out the list are a mix of K-12 and higher-ed tools, along with consumer-facing and employment-oriented services. There are newly-funded curriculum and courseware services, games, adaptive learning platforms and study tools. As investment opportunities go, “we’re seeing a pretty even distribution between K-12 and higher-ed” deals, says Michelle Dervan, a principal at Rethink Education.

But the more lucrative deals have focused on higher-ed and workforce training. “We’re seeing a lot more activity and innovation in the workforce training space, especially the nexus between higher-ed and employment,” Dervan adds. In particular, these companies are “tapping into the big stress points in society,” particularly around student debt, automation and the fear of losing jobs to automation.

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Learning is no longer viewed as an afterthought in the workforce.
Deborah Quazzo, managing partner at GSV AcceleraTE

That’s an observation shared by Deborah Quazzo, managing partner at GSV AcceleraTE: “Learning is no longer viewed as an afterthought in the workforce.” Company leaders want to find, retain and nurture talent. Front-line workers are increasingly wary of job obsolescence. These two factors have spurred investment in workforce-learning efforts, she observes. “For CEOs, learning has moved up in the hierarchy of company priorities.”

Greater Expectations

Across all technology sectors, the amount of funding raised in seed rounds are growing, in part because the bar for raising Series A rounds are higher. “For fundraising, seed is no longer a round, it’s a phase,” wrote Hunter Walk, a partner at Homebrew, a San Francisco-based investment firm. “Seed A investors are increasingly looking for de-risked companies and willing to pay for more momentum.”

U.S. edtech funding, average by round, 2011 - 2018 H1

Over the past five years, seed rounds for edtech startups have been growing in size. In 2014, the average seed round was less than $1 million. So far this year, that figure has grown to $2.4 million.

Investors are looking for earlier signs of a viable revenue model, and recognize that it may take startups longer to find one. Sometimes, 18 months—the typical timeframe (or “runway”) in which a seed-stage company is expected to hit performance targets for raising a Series A—is not enough. The past few years have seen more companies raising “bridge” and “seed extension” funding before trying for a Series A.

With revenue a focus for early-stage funders, some have become wary of the freemium business model, which prioritizes getting as many users as possible in lieu of generating money. “There are more investors who’ve become jaded with freemium plays that have not come into fruition over the last couple of years,” according to Dervan. (But it’s worth noting that the door hasn’t completely closed, as evidenced by Kiddom’s $15 million Series A fundraise.)

High-Profile Exits

There have been at least 30 U.S. edtech acquisitions so far in 2018. To investors like Quazzo, that’s a sign that education is no longer a “stepchild” of the technology industry. Coupled with Pluralsight’s IPO (the first for a U.S. edtech company since Instructure went public in 2015), “exit activities have been incredibly robust,” she says.

Among the biggest acquisitions is that of General Assembly, the New York-based provider of short-term training programs, which was sold for $412.5 million to Adecco, a Swiss human resources firm.

Private equity continues to be on the hunt for education assets. Last year saw several private equity firms make splashy entrances in the education industry, including BV Investment Partner putting $150 million in Hero K12 to acquire other education companies, and The Rise Fund’s $190 million investment in EverFi.

This year, Francisco Partners emerged as a player through acquiring two big names in K-12 education. In February, it agreed to fork out $120 million for Discovery Education, a provider of print and digital textbooks and curriculum (and formerly owned by its parent, Discovery Communications, best known for its television programs). Then in May, Francisco bought Renaissance Learning, an assessment developer, from its previous private-equity owner Hellman & Friedman (which paid $1.1 billion for Renaissance in 2014).

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Some of these companies are more of a product than a company, so it makes sense for them to find a parent and become part of a bigger platform.
Michelle Dervan, principal at Rethink Education

In Dervan’s eyes, private equity’s interest in K-12 will lead to a long-awaited consolidation of the industry, which over the years has become littered with piecemeal products and services. “This space is very fragmented,” notes Dervan. “Some of these companies are more of a product than a company, so it makes sense for them to find a parent and become part of a bigger platform.”

“K-12 has always been viewed as a weaker part of the market” in terms of companies that can deliver on revenue, says Quazzo. Now that’s no longer the impression. The interest from private-equity acquirers (who really focus on the bottom line) suggests “there are real companies being built with real returns and results,” she claims.

Yet even those with questionable financials (but big user bases) have managed to find an out. Case in point: Edmodo, the social-learning platform developer, was sold to NetDragon, a Chinese company, for $15 million in cash and roughly $122 million in stock. That’s a generous sum for a company that had raised close to $100 million in funding but generated just $1 million in revenue in 2017.

Here Comes China

Chinese education companies continue to flex their financial muscles in this industry. Earlier this year, NetDragon also purchased math tool Sokikom. And in recent years, it also acquired JumpStart (makers of Math Blaster) and Promethean (best known for its interactive whiteboards).

These deals reflect a voracious appetite for edtech among Chinese companies, as evidenced through gargantuan fundraises and their increasing presence in edtech conferences across the globe. According to JMDedu, which covers the Chinese education industry, Chinese edtech firms raised $2.2 billion across 270 deals in the first half of 2018.

Chinese deal sizes are staggering—particularly for K-12 and tutoring services. (A running joke is to add a zero to the end of the dollar amount that a comparable U.S. edtech company would raise.) VIPKID, a Chinese company that connects English learners with native-speaking tutors, raised $500 million in its Series D round. (Recall that Varsity Tutors raised $50 million this year.)

Don’t be surprised to see them continue to eye U.S. assets. (Already they’re snapping up cash-strapped U.S. universities.) Last year, New Oriental, a firm publicly listed in the U.S., reportedly set aside $1.8 billion to acquire education acquisitions across the world. ATA Inc., another company also listed on the U.S. stock market, has similar ambitions. And so does TAL Education, which has invested in U.S. edtech companies and venture capital funds as a limited partner. (The company’s financial performance, however, has been questioned.)

“With those kinds of funding and the speed with which they have scaled,” notes Dervan, “China is set to dominate the consumer-facing edtech space for years to come.”

Source : https://www.edsurge.com/news/2018-07-16-2018-halftime-ka-ching-report-u-s-edtech-raises-739m-in-venture-funding

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15 Nanotechnology Companies Getting Funding In 2018

Source:EdSurge

15 Nanotechnology Companies Getting Funding In 2018

15 Nanotechnology Companies Getting Funding In 2018

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15 Nanotechnology Companies Getting Funding In 2018

15 Nanotechnology Companies Getting Funding In 2018

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15 Nanotechnology Companies Getting Funding In 2018