This week dives into the contrasting worlds of edtech IPOs, spotlighting Duolingo’s impressive rise and PowerSchool’s more cautious debut. The conversation emphasizes China's regulatory crackdown, forcing tutoring companies to go nonprofit and shaking investor confidence. Meanwhile, a spotlight is cast on the booming interest in Indian edtech ventures, while U.S. companies thrive. Additionally, there's an exploration of innovative coding education apps, reflecting the growing demand for tech skills. It's a fascinating look at how these shifts redefine the landscape!
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question_answer ANECDOTE
Duolingo's Tech Identity
Luis von Ahn, Duolingo co-founder, shared that investors view Duolingo as a tech company, not purely edtech.
They compare it to Spotify or Tinder, focusing on engagement metrics, not just educational outcomes.
insights INSIGHT
Shifting Investor Perceptions
Duolingo's IPO pricing reveals a higher multiple than expected for a consumer edtech company.
This suggests a shift in investor perspectives, as consumer edtech was previously considered less investable.
volunteer_activism ADVICE
Focus on Core Value
Edtech companies need to focus on improving learning and comprehension to solidify their positions.
While Duolingo mentions M&A, its co-founder stated it's not a current priority.
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Last week, Natasha and Alex jumped on Twitter Spaces to discuss the tale of two edtech IPOs: Duolingo, the consumer language learning company, and Powerschool, the enterprise K-12 software platform. It was a rare moment in the sun for the recently-revitalized sector, which saw two companies list on the NASDAQ on the same dang day.
Special shout out to our producer Chris Gates for handling this impromptu live chat, tech difficulties and all, and bringing it to your ears on this lovely Monday. Don't forget that Equity is largely on break this week!
Here's what we got into, featuring some edtech entrepreneurs nice enough to drop on by:
As Lightspeed Ventures investor Mercedes Bent so aptly put it, the news is somewhat ironic: "[T]he US edtech IPO market is on fire (after being dormant for so long) and the China edtech market is crumbling (after being on fire for so long)."
Powerschool was a bit different. It priced at $18 per share, the low-end of its $18 to $20 range. The company is up from its IPO price, albeit a much more modest two, or three percent in today's early trading.
In the second half of the show, we brought on the following host of edtech founders to share their hot takes about the current state of edtech:
Taylor Nieman, the founder & CEO of Toucan spoke language learning -- and how she's using Duolingo's S-1 as a competitive advantage.
Anada Lakra, the founder & CEO of BoldVoice, a startup that wants to help non-native English speakers hone their accents. TechCrunch covered the company here.
Before we go, Equity is on a "break" this week, as we do some soul searching and refresh before our next run of shows. Obviously we still had to shaare this episode, and um, are recording another episode this week too, but you, my dear friend, will hear from us again next Monday.
Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.
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