Back in May, I wrote about the tough times the education market is going through.
But education investor Atin Batra sees the market differently. He is the founder of his 27V, an early stage investment firm focused on edtech and the future of work. Batra is bullish about the future of education investments and markets, and believes we may all be reading the dynamics wrong.
Batra’s portfolio has a combined enterprise valuation of $300 million and has seen great success with companies such as Aktiv Learning, an in-class engagement and homework platform built specifically for chemistry courses. Batra said Aktiv has generated millions of dollars in revenue and is used by more than 600 universities. His investment basket includes Fiveable (raised $16M, product growing at 80%), New Campus (on track to reach 7-figure revenue in 2022), Fluent (16,000 users, 30-day retention rate of 40%), Edlyft (expected 7-figure revenue in 2022) and DayOne (300+ fellows founded 150 companies).
The downward trend in education outlined in May was misleading, Mr Batra said.
“For one thing, March 2021 was arguably near a peak for the public market, especially education companies. , and all of these companies have market caps that are orders of magnitude larger than EdTech companies,” he said. He added that “most of the pandemic’s beloved industries are back to average.”
Of the educational companies I have specifically outlined, Batra said: An LMS is a dime and there is only so much technology on the market for homework solutions. ”
And the long-term effects of the pandemic in education are likely to be different than in other sectors, he says. “Very few students or teachers have participated in online learning activities before they were forced to stay at home. he said.
I asked Batra if there were certain types of education companies he thought had near-high-end potential. ‘ he said.
Batra also said he is “watching” two trends in the education market. One said, “Employers are now very much aware of the need to retain top talent, especially after the pandemic and the layoffs. The best way to do that is to give them opportunities to learn and grow.” Where companies invest their time and resources, so do VC investors.”
Another trend is “the predicted collapse of traditional institutions of higher education. I believe this is a completely disproportionate thought experiment,” he said. “But what I’m hoping is that proof of work might become a more valuable qualification than the paper you have. It will be a better indicator of whether we can make a meaningful contribution.”
I asked Battra what he looks for when investing.
He said it had a “compelling origin story,” adding that “true customer feedback should never be taken lightly,” adding that he was looking for “unit economics that make sense.”
“This sounds more prescient today, but I have always argued that we are in the business of business. If not, it makes me wonder where their priorities lie. and then how to make money,” he added.
For education companies in particular, Batra said, “I wonder if the founders understand and are aware of the challenges of selling to educational institutions, if the team is measuring true learning outcomes, or if it’s just vanity. It’s also important to evaluate whether you’re measuring metrics.”
Batra isn’t the only education investor, and he’s not the only one speaking out about educational opportunities.at the same time his voice why Investing in education is worth listening to.
“It always gets my goats,” he said. Realize your maximum potential.
“When did financial engineering and social engineering become more important than teaching engineering and world-building concepts to the next generation? Who can believe that buying for school is a better use of resources than buying a year’s worth of school resources and equipment for an entire class of children?” he asks. rice field.
This is an investment question worth asking. And if those are the returns that are being calculated, in that context the education market is always a smart investment.