Tag: covid-10

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Edtech exits are increasing, but by how much?

Before the coronavirus made edtech more relevant, companies in the sector were historically likely to see slow, low exits. Despite successful IPOs by 2U, Chegg and Instructure in the United States, public markets are not crowded with edtech companies.

Some of the largest exits in the space include LinkedIn’s scoop of Lynda for a $1.5 billion in cash and stock and TPG’s purchase of Ellucian for $3.5 billion.

But both of those deals happened in 2015. Five years later, edtech is cooler and surging — but is it seeing exits? Are Lynda and Ellucian one-off success stories?

2U’s co-founder and CEO, Chip Paucek, said he is optimistic.

“We are a rare edtech IPO,” he told TechCrunch last week. “For a long time in edtech it was either ‘sell to Pearson or not.’”

Despite the sector’s slow past, Paucek said now is a good time to start an edtech company because the sector “is finally starting to hit its stride” with more back-end infrastructure and demand for online education.

This morning, let’s use some data to paint a picture of the landscape of edtech exits and bring some balance to this stodgy stereotype.

Boot the growth

There have been approximately 225 acquisitions in edtech between 2003 and 2018, according to Crunchbase data. RS Components sent me a graph in March to contextualize this timeframe a bit more:

Edtech deals over time. Graph credit: RS Components.

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In spite of an uncertain economy, US video game sales remain strong

May marked another extremely strong month for gaming sales, according to the latest figures from NPD. Between software, hardware, accessories and game cards, Americans spent around $977 million. That’s a 57-percent jump since the year prior and the highest it’s been for the month since 2008, when the county was feeling the strain of the Great Recession.

All of this is made more remarkably by the fact that the United States has been struggling with COVID-19-related pains for months now. This week, another 1.5 million Americans filed for unemployment, bringing the total number to 44.2 million since the beginning of shutdowns. But as countless other venues for non-essential spending have suffered, gaming has thrived.

US video game sales have record quarter as consumers stay at home

It’s clear that games are how Americans are choosing to spend whatever sort of disposal income they might have, as they’re stuck at home, away from other humans. And that spending has continued for a few months now, even after Microsoft and Sony have begun hyping their next generation consoles — both due at at the end of the year.

That, perhaps, is part of why Nintendo continued to dominate console sales with the Switch, in spite of hardware shortages. Animal Crossing: New Horizons remained the top selling title for the console (and third over all), owing to the online cult its amassed through social-first gameplay. Call of Duty: Modern Warfare and Grand Theft Auto V took the number one and two spots respectively on both the PlayStation 4 and Xbox One.