Not rendering correctly? View this email as a web page here.
Lessons from the past

As we go back to school, we look at who let the Gini out of the bottle, the rise of New Collar roles as well as comparing Q3 performance in the sector. The report aims to provide you with a bite-sized summary of what is happening in the world of learning and training. 

Now & Next
Global All Stars
market roundup
Valuation Benchmarks
M&A highlights




The key trends impacting education and training today

Who let the Gini out of the bottle?

Income inequality has been on the rise in developed economies since the 1970s, whilst in Latin America and Sub-Saharan Africa it has been decreasing albeit from much greater heights.  Relative measures of prosperity mask a range of underlying issues but the distribution of the productive capacity of a nation is a fundamental factor. Education and training ease the distribution, but slowly, as yesterday’s education is today’s human capital.

So in the US, full-time workers with at least a bachelor’s degree earn on average twice as much as those with only a high school diploma. Not unsurprisingly there is good evidence that education and training make people better off.  But the question is does it make the right people better off?

In Daniel Markovits’ latest book the “Meritocracy Trap”, the Yale law professor argues that meritocracy is a false god, where hard work is not the panacea for inequality.  Meritocracy is the cause of vast inequality that has appeared in the work place, education and society at large. The rich have got richer and have preserved their position by ensuring that that they are super educated and can smooth the passage through the system for their offspring. Just look at the current US college scandal as an example.  The victims are the broad middle class, who in the US have got stuck. They are unable to improve their education and skills and are working less hard (by about 20%) than their predecessors.

The spread of wealth depends, in large part, on the spread of skills to the right people in the right place.  This is not happening.  There is a massive mismatch between the supply of skills and what is demanded in the marketplace.  The estimated cost of this mismatch to the global economy is $13 trillion of lost GDP, far worse than any oil shock. The ugly truth is that we are not providing the systemic solutions to deliver the rights skills for the 21st Century.

With the rise of automation, the distribution and ownership of workplace skills is likely to change again and if we are not careful, for the worse. Concentrating robot ownership and its resulting productivity amongst the already wealthy will exacerbate the Gini co-efficient even more. A lesson from the past is that the industrial revolution widened the gaps between countries and within them.  The great industrialists reaped the rewards of building railways, steel mills and other transformative technologies.

In our own age, we need to ensure that we learn from the history of technology revolutions and ensure that humans adapt their skills at an equivalent rate of change. Technology is harnessed to enhance the productive capability of workers; cobots not robots.  If we fail, then then the Gini will never get back in the bottle, and we will sow the seeds of discontent for generations to come.

Accenture quote



 Learn how innovators of today are shaping the edtech of tomorrow.

Are New Collar roles the answer to the skills crisis?

New Collar, a term coined by IBM’s CEO Ginny Rometty in 2018, is now being widely used to suggest a possible solution to the skills crisis. It is carrying a particular focus on STEM, and becoming increasingly applicable to roles within the manufacturing and healthcare sector. With new technologies being adopted to optimise production and work, in demand digital skills and becoming tailored towards managing the software. However, with technology evolving at a staggering rate, the approaches to skills training methods cannot keep up. Furthermore, the impending skills crisis is already here, with a predicted shortfall of two million workers in the US by 2020. 

Due to the increasing pace of change in the workplace, we can be certain that the typical 4 year degree approach will not survive. IBM may have recognised this back in 2011 when it launched the first P-TECH school in New York City. This was through a partnership with City Tech and The New York City Department for Education. It is now one of the fastest growing networks of schools, with 220 institutions open by the end of 2019. P-TECH (Pathways in Technology Early High School) has a unique grade 9-14 model with various apprenticeships and internships, meaning that high schools, community colleges and industry all work together to harness the right skills for future roles.

The entire programme is cost-free, has open enrolment, and focuses on disadvantaged youth. Graduates are also first in line for job interviews at partner companies. IBM has already hired 30 of the 240 graduates from affiliated schools so far, with a starting salary of at least $50,000.  In comparison, the average college graduate will have a starting salary close to $48,000.

We could begin to see a future where work and education no longer work in silo and instead build creative training programmes that foster future specific skills to the company. By creating supported and differentiated pathways for young people, it can ensure the right skills are created and developed to fill the right roles, in a process that can keep up with the changing landscape of work.





A global snapshot of the edtech market

Market Roundup Logos
Pre K12 & K12 header3
k12 four v5
Google app K12
The way we teach coding
higher education v3
Vocation education gets a 21st C Reboot
He one v3
New Mexico announces free college
Corporate Training v2
CP three v2
Changing career landscape
IBM Quote
blue x divider



Global trends and innovation across the sector

graph only

The third quarter of the year is typically a quieter period as Europe and North America enjoy the summer months. 2019 was no exception with Q3 deal volumes falling below both Q1 and Q2.

Despite the low deal volume, we saw interesting deals taking place across the regions, with CATS Colleges (UK) and Jinan Shuangsheng Education Consulting (China) fetching values of c.$190m and c.$220m respectively. While only 42% of the quarter’s deals involved EdTech companies, including EdTech giant Chegg which announced the acquisition of Thinkful (US) for $100m ($80m cash and $20m contingent on performance) - its largest deal to date.

Over 60% of the quarter’s deals were considered “small” (<$30m) – this is a larger portion than previous quarters and offers an explanation of the quarter’s low total deal value. There were no notable changes to either geographic spread or buyer type split. However an interesting movement occurred in the sector split as K12 gained 10% and vocational training lost over 15%.

There may be a flurry of activity in Q4 as companies look to close deals before Christmas – our Q4 analysis will dissect how 2019 stacks up against previous years and what it might mean for the future.

Sector Spend GraphM&A graph

Geographical Spend deal size graph






Summary on mergers, acquisitions and fundraising

human capital group

1 Deals sourced from Capital IQ and Mergermarket

2 $80m cash and $20 contingent on performance

Significant Fundraising Activity
white hat jr sig fundVIP think sig fund

amira learning sig fund

save the date EdTechX 2020