2021: A SPAC Odyssey 🚀 Transcend Newsletter #38

The education market is welcoming SPACs in 2021 + the latest Transcend Fellowship!

Hey, Alberto here! Welcome to the Transcend Newsletter.

The Transcend Newsletter explores the intersection of the future of education and the future work, and the founders building it around the world.

Before we start, I want to share a very exciting announcement.

🚨We are opening up applications for the latest Transcend Fellowship! This fellowship cohort (Winter 2021/W21) will be our fourth one to date, having supported 60 founders from over 20 countries last year.

We will accept 20 early-stage founders building startups in education/future of work, to help them find product-market fit and give them access to our awesome founder community.

If this sounds like you, learn more and apply here before February 5th! You can also support us by sharing with your networks on Twitter, LinkedIn, or sharing this newsletter below to help us reach founders all over the world! 🙌

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Now on to the good stuff!


2021: A SPAC Odyssey 🚀

We are going to cover one of the hottest topics in the financial markets these days, and how it impacts our industry – the world of education and work.

We will look at: 

  1. What SPACs are

  2. The gap between public vs private education companies

  3. Why and how SPACs will impact education

  4. SPAC candidates for 2021

Enjoy! 🙌

What on earth are SPACs?

A SPAC (Special Purpose Acquisition Company) is essentially a "blank check" company. The goal is to raise money from investors to acquire a private company and take it public.

When SPACs are launched, they have no “product”. They only have a team of investors and a set of target companies they are interested in acquiring. They raise money in the public markets, and offer the acquired company an alternative to going public independently.

It's a simple proposition. SPACs have been around for decades, but gained popularity in 2020 with the rise of tech IPOs. Many startup CEOs consider SPACs as a founder-friendly path to going public because it requires a shorter filing process and is less regulated by financial institutions.

Why should you care about SPACs? 

For the last decade, private unicorns delayed their IPOs longer and longer. SPACs are helping many of these companies go public in more favorable terms. They are a new reality in the financial markets, and represented 55% of all US IPOs in 2020 (up from 28% in 2019). This inevitably impacts how companies scale globally.

SPACs are about to make a splash in the education sector in 2021. To understand why, we need to look at the gap in the education industry between what publicly-traded companies and what large, private startups do, and how 2020 has changed the market. 

Part I. The public vs private gap in education

There is a massive gap between publicly-traded companies and private startups in education.

It’s not so much a funding gap as much as it is a “focus” gap – most publicly-traded companies provide more traditional services and technology, as well as offline services in education. 

Most of these publicly-traded companies are either operators of private universities (Grand Canyon, Adtalem, Laureate, Strategic Education), publishers (Pearson, Wiley, Scholastic), tutoring/teaching services providers (Chegg, TAL, New Oriental, GSX) or corporate training providers (Instructure, Pluralsight, Franklin Covey), with a few exceptions like OPMs (2U) or education management companies (K-12 Inc). 

Many of those markets will shrink over the coming decade, as more education moves online, university students explore shorter learning experiences, and new skills are needed by companies. 

Now compare those categories with those of education unicorns: these companies operate in markets with higher technology adoption and faster market growth, such as tech-enabled tutoring (Yuanfudao, BYJU's, Zuoyebang), skilling platforms (Udemy, Coursera, Udacity, Guild Education), language learning (VIPKid, Duolingo) or study support tools (Quizlet, CourseHero).

Categories like skilling platforms or direct-to-student tools simply didn’t exist a decade ago, and to date, very few publicly-traded companies even provide those services. 

How people learn and work has changed massively in the last decade, and publicly-traded companies are not covering all those trends. I fully expect these startup unicorns to put many of the incumbents out of business in the next five years.

Part II. The Edtech funding boom in 2020

Startup unicorns are not only capturing a new approach towards learning - they are also growing faster than ever, and raised record-breaking amounts of capital during 2020.

This pandemic sent edtech funding through the roof (over $10B invested in 2020, twice what it was in 2019). Contrary to popular belief, the overwhelming majority of that funding has gone to the later stage unicorns in this list, and not the early-stage startups.

These startups will likely use the momentum (more funding to fuel growth, plus a differentiated business model from incumbents) to go public in 2021, before growth could slow down in the coming years. SPACs are already lining up to join the party.

SPACs in Education

I expect many of the fast-growing unicorns education companies to consider SPACs when the time comes for them to go public.

SPACs are very new to education. In fact, the only case prior to 2020 was the Meten acquisition by EdTechX SPAC, which hasn’t performed very well to date. In the last 2 months, however, 5 SPACs exclusively focused on education have filed to go public.

These SPACs are targeting acquisitions of companies valued between $500M and $3B, which opens up a lot of potential targets, most of these being in the US.

Some of the targets that could go public in 2021, and may do so through a SPAC:

  • The MOOC platforms, which in recent years have specialized in different offerings and managed to bounce back, such as Udemy ($3.3B Valuation), Coursera ($2.5B Valuation), or Udacity ($1.1B Valuation). 

  • The edtech veterans like Course Hero (Study support tools, $1.1B Valuation) or Age of Learning (K-12 Education Content, $1B Valuation), which have been around for fourteen years. 

  • New additions to the unicorn club, like Duolingo (Language learning, $2.4B Valuation), Quizlet (Study Notes, $1.0B Valuation) and Guild Education ($1B Valuation), or even Masterclass (Educational entertainment, $800M Valuation). 

What this means for education companies

The rise of SPACs will have an impact on these late-stage startups’ ambitions to go public and grow. I hope this movement will pave the way for more founder-friendly financial structures for the startups to come in the next decade. I would expect at least 5 education companies to go public through SPACs in 2021. 

More funding and attention to edtech will hopefully increase the funding available for early-stage startups, which have only seen a fraction of that 2020 funding boom.

This will be crucial to bring more education and work innovations to the mainstream, and hopefully this 2021 SPAC boom moves the education space in that direction.

If you liked reading the newsletter this year, make sure to hit the ❤️ button so others can find us too!

news roundup around the future of learning and work

💡 EdTechX launched an exciting challenge for students to submit their ideas for the future of education. Three winning teams will receive prize packages worth $25,000 (including mentoring, opportunities and credits), so submit your ideas before March 2021!

📈 2020 was a crazy year for education technology startups, and Brighteye reported these statitistics as well as predictions for 2021 in their Edtech Funding Report.

🎒This article by John Tan (Founder of Doyobi and F20 Fellow) follows his son Camper’s journey into homeschooling. Join the Re:Imagine Learning community for more insights!

🎓 Our fellows Aditya and Raj were featured in the press for their work building Stoa School a 12-week MBA using their unique community-based learning format.


exciting job opportunities we want to share with you!
  1. Learning Experience Design Associate - Stoa School

  2. Technical Lead - Framework

  3. Tech Lead- ScholarSite

  4. Customer Experience Lead; Chief of Staff – Otter

  5. Software Engineer– Bansho

  6. Growth Specialist - TigerTalk

  7. Co-founder (Marketing, Operations, Sales)- Outscal

For more job opportunities,  check out our full Job Board!.

Many thanks to Kyla Scanlon, Abu Amin, Dan Hunt, Gian Segato, Nick Drage from Compound Writing for the feedback!

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