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Special purpose acquisition vehicles regained popularity in 2020 as an alternative way to take startups public, and now they are eyeing edtech companies.
So far, Skillsoft has gone public through Churchill Capital, and Nerdy, parent company of Varsity Tutors, did the same through a reverse merger with TPG Pace Tech Opportunities. On the investor side, Edify and Adit EdTech Acquisition are both separate, $200 million SPACs for education companies.
SPACs are not being used to prop up companies that can’t go public through traditional means.
But is there anything specific to SPACs that makes them a better route for edtech companies than a traditional IPO or direct listing? To explore the question, I reached out to Chuck Cohn, CEO of Nerdy, which is currently in the process of being SPACed by TPG, and Susan Wolford, chairperson of Edify Acquisition, a $200 million SPAC for edtech companies.
Nerdy’s business is growing, but the company doesn’t expect to be profitable until 2023 and wants to drive revenues up 31% and 43% from its 2020 and 2021 expectations, respectively. Cohn said the balance sheet looks the way it does because they are heavily investing in product and engineering, and focusing on being well-capitalized.
The SPAC, he said, is an opportunity to accelerate Nerdy’s core business: “It’s less about going into the public markets, and more about that this transaction allows us to take an offensive position and lean into the big opportunities.”
Cohn said they pursued a SPAC because it is a faster route to going public. As vaccines roll out, growth in remote learning will slow, which could hurt growth expectations — especially ones as ambitious as Nerdy’s. For that reason, it’s clear why some edtech companies want to get out to the public markets as soon as possible.
Despite some naysayers, Cohn said SPACs are not being used to prop up companies that can’t go public through traditional means.
“I think that perception was fair a year ago,” he said. “But if you look at companies that have taken this route recently, including OpenDoor, they are very high quality. There’s a fundamental perception change.” He added that “SPACs have been reaching out over the years,” but the timing felt more fortuitous due to TPG’s interest and track record.
On the other side of the table, Wolford said she is currently searching for an edtech company to bring public on behalf of Edify, a $200 million SPAC she has raised. She noted that PIPE instruments, aka private investments in public entities, have helped de-risk SPACs for the general audience. These instruments have been around for decades, but Wolford said they recently became more mainstream to use in SPACs.
Like corporate financial accounting, the power grid never draws headlines when things are going well. No journalist writes “The power remains on,” or discusses the extensive work it takes to maintain the grid. Instead, it takes a record-breaking ice wave to knock out power to one of the largest states in America for it to start garnering front-page coverage, or perhaps massive wildfires in America’s most populous state like the Camp Fire in California in 2018.
Power grids are going to be in the news more and more in the coming years as global climate change intensifies storm activity and grids come under increasingly harsh strain. As my colleague Jon Shieber wrote yesterday, “Whether it’s heavily regulated markets like California or a free market like Texas, current policy can’t stop the weather from wreaking havoc and putting people’s lives at risk.” The grid is at the center of one of the toughest challenges facing us this century.
What’s needed are better sensors and tech for identifying the source of outages — and also preventing them in the first place. With millions of power poles and hundreds of thousands of miles of transmission wires scattered across the United States, how can utilities reliably verify the quality of their systems? How can they do that in an efficient way to avoid rate increases on users?
Gridware, which is in the current batch of Y Combinator, is one company taking a shot at this critical need. Its approach is to use a small, sensor-laden box that can be installed to a power pole with just four screws. Gridware’s package contains microphones and other sensors to sense the ambient environment around a power pole, and it uses on-board AI/ML processing to listen for anomalies and report them to the relevant managers as appropriate.
It’s like “a guard standing next to the pole, listening to it, watching over it,” Tim Barat, CEO and co-founder, said, likening the box to a FitBit for a power pole. When a tree branch breaks and cuts through a line, there’s “no way to detect them unless you are right next to the fault.” With Gridware, it’s “not the right place at the right time but the right place all the time,” he said.
What makes the founding team compelling here is the backgrounds of some of the company’s founders. Barat worked as a power pole worker himself in the field, evaluating equipment and searching for problems. “Every time we go up a pole, we hit it with a hammer, which tells us whether there is termite damage, etc. [… and] that is still how inspectors investigate a pole,” he noted.
Barat eventually migrated to University of California, Berkeley, where he was mentored by Prabal Dutta, an electrical engineering professor who also joined the company early on as a co-founder. Dutta’s worked has focused on “industrial cyber-physical systems,” and he continues to research industrial control systems through digital interfaces via the iCyPhy center.
Gridware’s team clockwise from top left: Tim Barat, Abdulrahman Bin Omar, Dr. Prabal Dutta, Addison Chan, Riley Lyman, and Hall Chen. Photo via Gridware.
Barat also met Abdulrahman Bin Omar, who had worked for a number of years in the energy sector, in a class that eventually had a one-week hiatus due to California wildfires. The two began working together in 2019, joining Berkeley’s startup incubator Citrus Foundry in 2020. The trio eventually linked up with co-founders Hall Chen and Riley Lyman as well, and snagged a $150,000 state grant from the California Energy Commission via the CalSEED program.
Today, the startup has seven employees, and it’s currently in talks with utility grids of all sizes about deploying its product. Grids can be very slow to adopt new technology with very long testing and sales cycles, but there might just be an opportunity for the company to accelerate those normal timelines given the extensive and visible power outages we have witnessed the past few years. We need to “transition our grid to face the challenges of the new century,” Barat said.
Jeff Chen has a pithy pitch for his new startup Taste: “We made the Instagram of nice food.”
In other words, just as Instagram made it easy for regular smartphone users to look like talented photographers, Taste makes it easy for customers to prepare impressive meals at home.
That’s because the real preparation is being done by fine-dining restaurants — Chen told me there are 16 Michelin-starred and Michelin-rated restaurants currently on the platform — whose food doesn’t translate easily to a delivery or takeout experience. Taste offers “dinner kits,” which Chen said are neither standard takeout (where everything has been fully prepared but doesn’t necessarily travel well) or a regular meal kit (where “everything is separate and raw”).
Instead, he suggested Taste’s dinner kits are “this in-between thing” where the food is mostly, but not entirely, prepared in advance, allowing customers to “heat and assemble much faster.”
Image Credits: Taste
For example, when I tried out Taste last week, my girlfriend and I received three-course meals from Intersect by Lexus and its “restaurant in residence” The Grey. A couple of the (delicious) courses and sides had to be heated in the oven or the microwave for five, 10 or 20 minutes, but there was no real prep or cooking required — the real work was cleaning up afterward.
Even the packaging was impressive (if a little overwhelming), with a large, fancy box for each kit, and then individual packages for each course, plus a separate package for spices. There are optional wine pairings, and some restaurants will also provide plating instructions and a Spotify playlist for the meal.
Taste — which is part of the winter 2021 batch of startups at Y Combinator — is currently New York City-only, where it works with restaurants including Dirt Candy, Meadowsweet and the Musket Room. As you might expect, these kits cost more than your standard dinner delivery. Many of them are in the $60-to-$100 per person range, although there are also dinners below $40, as well as a la carte options.
Chen (who sold his last startup Joyride to Google) said that he and his co-founder Daryl Sew have been excited to help New York City chefs reinvent their offerings for delivery and weather the pandemic.
Taste founders Daryl Sew and Jeff Chen. Image Credits: Taste
“We also do a very key thing, which is pre-ordering and batching for the restaurant,” he added. “When a restaurant works with Taste, all the orders come in two days before to the restaurant, and we pick it up at designated times, which helps tremendously with capacity lift.”
And while Taste might seem particularly appealing now, when indoor fine dining options are either illegal, unsafe or transformed by social distancing and mask-wearing, Chen anticipates healthy demand even after the pandemic. After all, he suggested that before COVID-19, there were many people — busy parents, for example, or people who work long hours — who felt like they couldn’t take advantage of these restaurants as often as they wanted, or at all.
“Everything is getting moved into the home,” he said. “Movies are getting moved into the home with Netflix, workouts are getting moved into the home with Peloton and Tonal, and now we’re going to move nice dining experiences into the home.”
Google today introduced a suite of updates for its online education tools whose adoption and further development have been accelerated by the pandemic, including Google Classroom, Google Meet and the next generation of G Suite for Education, now rebranded as Google Workspace for Education. In total, Google is promising more than 50 new features across its education products, with a focus on meeting educators’ and admins’ needs, in particular, in addition to those of the students.
When Google first introduced Google Classroom, it didn’t set out to create a Learning Management System (LMS), the company says. But during the COVID-19 pandemic, Google found that many educators had begun to use Classroom as the “hub” for their online learning activities. Today, the service is used by over 150 million students, teachers and school admins, up from just 40 million last year.
As a result of the pandemic-prompted adoption and user feedback, Google is introducing a range of new features for Classroom this year, some of which will be made available sooner than others.
To better cater to those who are using Classroom as the hub for online learning, a new marketplace of Classroom “add-ons” will allow teachers later this year to select their favorite edtech tools and content and assign them directly to students, without requiring extra log-ins. Admins will also be able to install these add-ons for other teachers in their domains.
Also later this year, admins will be able to populate classes in advance with Student Information System (SIS) roster syncing and, for select SIS customers, students’ grades from Classroom will be able to be exported directly to the SIS. Additional logging, including Classroom audit logs (to see things like student removals or who archived a class), as well as Classroom activity logs (to check on adoption and engagement) will be available soon.
When students attend in-person school, teachers can easily notice when a student is falling behind. A new set of Classroom tools aims to do the same for virtual learning, as well. With the new student engagement tracking feature, teachers will be able to see relevant stats about how students are interacting with Classroom, like which students submitted assignments on a given day or commented on a post, for example.
Image Credits: Google
Other tools will tackle the realities of working from home, where internet connections aren’t always reliable, or — for some low-income students — not available at all. With an updated Classroom Android app, students will be able to start their work offline, review assignments, open Drive attachments and write in Google Docs without an internet connection. The work will sync when a connection is again available. And when students upload assignments by taking a photo, new tools will allow students to combine photos into a single document, crop and rotate images and adjust the lighting.
Classroom will also gain support for rich text formatting — like bold, italics, underline and adding bullets across web, iOS and Android.
Image Credits: Google
Originality reports, which help to detect plagiarism, will be available soon in 15 languages, including English, Spanish, Portuguese, Norwegian, Swedish, French, Italian, Indonesian, Japanese, Finnish, German, Korean, Danish, Malaysian and Hindi.
And Google’s own free, introductory computer science curriculum, CS First, is immediately available in Classroom.
Beyond Classroom itself, Google Meet is also being updated with the needs of educators in mind.
One must-have new feature, rolling out over the next few weeks, is a “mute all” button to give control of the classroom back to teachers. In April, teachers will also be able to control when a student can unmute themselves, as well.
Image Credits: Google
Other moderation controls will roll out this year, too, including controls over who can join meetings, chat or share their screen from their iOS and Android devices. Policies over who can join video calls will be able to be set by admins in April, as well, enabling rules around student-to-student connections across districts, professional development opportunities for teachers, external speakers visiting a class and more. Students will also not be able to join Meets generated from Classroom until their teacher has arrived. Teachers, meanwhile, will be made meeting hosts so multiple teachers can share the load of managing classes.
Google Meet is adding engagement and inclusivity features for students, too. Students will be able to select emoji skin tones to represent them and react in class with emoji, which teachers will be able to control.
Image Credits: Google
Finally, Google’s “G Suite for Education,” which includes Classroom, Meet, Gmail, Calendar, Drive, Docs, Sheets, Slides and more, will be rebranded as Google Workspace for Education. The tools themselves, now used by 170 million students and educators globally, won’t change. But the set will be available in four editions instead of just two to better accommodate a wider variety of needs.
The free version will be rebranded Google Workspace for Education Fundamentals, and will remain largely the same. The paid version, meanwhile, will become available in three tiers: Google Workspace for Education Standard and Google Workspace for Education Plus, as well as the Teaching and Learning Upgrade, which can be added on to Fundamentals or Standard to provide video communication in Google Meet, and other Classroom tools, like originality reports.
Standard has everything in Fundamentals, in addition to enhanced security through Security Center, audit logs and advanced mobile management. Plus has everything in the three other versions, as well as advanced security and analytics, teaching and learning capabilities, and more.
Fundamentals and Plus are available today and the others will go live April 14, 2021. Those who already have G Suite for Enterprise for Education will be upgraded to Education Plus.
Related to these changes, the storage model will be updated to a new, pooled storage option that aims to better allocate storage resources across educational institutions. The new model offers schools and universities a baseline of 100 TB of pooled storage shared by all users, which goes into effect for current customers in July 2022, and will be effective for new customers in 2022. Google says less than 1% of institutions will be impacted by the updated model, whose baseline supports over 100 million documents or 8 million presentations or 400,000 hours of video, to give an idea of size.
The company plans several updates for its Google Workspace for Education product line in the weeks to come, including saved drafts in Google Forms (in Fundamentals) Google Meet meeting transcripts (in the Teaching and Learning Upgrade) and more.
Outside of software product updates, Google is launching over 40 new Chromebooks, including a set of “Always Connected” branded devices that have an LTE connectivity option built in. Chrome’s screen reader, ChromeVox, has also been improved with new tutorials, the ability to search ChromeVox menus and voice switching that automatically changes the screen reader’s voice based on the language of the text.
Parents, who are now participating in their child’s online learning in a number of ways, will be able to add their child’s Google Workspace for Education account to their child’s personal account with Family Link — Google’s parental control software. That means kids can still log into their school apps and accounts, while parents ensure they stay focused on learning by restricting other apps and overall device usage.
Jeff Chen has a pithy pitch for his new startup Taste: “We made the Instagram of nice food.”
In other words, just as Instagram made it easy for regular smartphone users to look like talented photographers, Taste makes it easy for customers to prepare impressive meals at home.
That’s because the real preparation is being done by fine-dining restaurants — Chen told me there are 16 Michelin-starred and Michelin-rated restaurants currently on the platform — whose food doesn’t translate easily to a delivery or takeout experience. Taste offers “dinner kits,” which Chen said are neither standard takeout (where everything has been fully prepared but doesn’t necessarily travel well) or a regular meal kit (where “everything is separate and raw”).
Instead, he suggested Taste’s dinner kits are “this in-between thing” where the food is mostly, but not entirely, prepared in advance, allowing customers to “heat and assemble much faster.”
For example, when I tried out Taste last week, my girlfriend and I received three-course meals from Intersect by Lexus and its “restaurant in residence” The Grey. A couple of the (delicious) courses and sides had to be heated in the oven or the microwave for five, 10 or 20 minutes, but there was no real prep or cooking required — the real work was cleaning up afterwards.
Image Credits: Taste
Even the packaging was impressive (if a little overwhelming), with a large, fancy box for each kit, and then individual packages for each course, plus a separate package for spices. There are optional wine pairings, and some restaurants will also provide plating instructions and a Spotify playlist for the meal.
Taste — which is part of the current batch of startups at Y Combinator — is currently New York City-only, where it works with restaurants including Dirt Candy, Meadowsweet and the Musket Room. As you might expect, these kits cost more than your standard dinner delivery. Many of them are in the $60-to-$100 per person range, although there are also dinners below $40, as well as a la carte options.
Chen (who sold his last startup Joyride to Google) said that he and his co-founder Daryl Sew have been excited to help New York City chefs reinvent their offerings for delivery and weather the pandemic.
“We also do a very key thing, which is pre-ordering and batching for the restaurant,” he added. “When a restaurant works with Taste, all the orders come in two days before to the restaurant, and we pick it up at designated times, which help tremendously with capacity lift.”
Taste founders Daryl Sew and Jeff Chen
And while Taste might seem particularly appealing now, when indoor fine dining options are either illegal, unsafe or transformed by social distancing and mask-wearing, Chen anticipates healthy demand even after the pandemic. After all, he suggested that before COVID-19, there were many people — busy parents, for example, or people who work long hours — who felt like they could’t take advantage of these restaurants as often as they wanted, or at all.
“Everything is getting moved into the home,” he said. “Movies are getting moved into the home with Netflix, workouts are getting moved into the home with Peloton and Tonal, and now we’re going to move nice dining experiences into the home.”
