NEW YORK – It’s a tough time for tech companies.
The stock market has taken a hit over the past few months, and the technology sector has been hit particularly hard. Meanwhile, colleges are experiencing declining enrollment at the same time as their coronavirus aid funds are drying up, potentially limiting how much they can spend with suppliers.
However, ed tech CEOs and investors remained bullish about the future of their own sector during a conference in New York on Thursday, held by market analysis company HolonIQ. Here are three trends they say are on the rise.
Ed tech will overcome tough market conditions
Stocks have been down for most of the year, reaching a new low Friday after the Federal Reserve raised interest rates again in an attempt to combat soaring inflation.
Ed Tech shares were under pressure. Shares of 2U, which owns MOOC platform edX, closed at $5.78 on Friday, down from about $35 a year ago. Shares of Coursera, a well-known MOOC platform, were also trading around $35 last September. They closed at $10.25 on Friday.
These market trends have important implications for electronics companies, especially those that have been considering initial public offerings, according to investors who spoke at a HolonIQ panel Thursday.
“We see an IPO window that has been closed for quite some time,” said Shoshana Wernick, managing director of Avathon Capital. “If you’re a company that needs money and you have to raise money right now, it’s very difficult.”
Nevertheless, the speakers gave reasons to expect positive long-term trends. Just over 10 years ago, only about $500 million in venture capital and growth capital was flowing into the electronics market, said Michael Cohn, a partner at GSV Ventures.
Here compared to over $20 billion in 2021. Despite the uncertainty of the future, Kohn predicts an “upward trajectory.”
Chip Paucheck, CEO and co-founder of 2U, acknowledged the tough market conditions.
“I show up at cocktail parties now and people ask, ‘How are you?'” he said. “Because lately, apparently, it’s not pleasant. And we take it very seriously. Our shareholders are an important community for the company.”
However, Paucek said 2U’s latest moves include acquisition of edX last year to become a company with a consumer-focused platform — setting it up for the long term.
“This company is much, much stronger than it was when we were at the peak of prices,” Paucek said.
Microcredits are the future of higher education
Executives from two major technology companies touted the new micro-credentials available on their platforms, stressing that these small offerings will be a key part of the future of higher education.
In May Coursera launched the Career Academy, a skills training academy where users can earn entry-level certifications from companies like IBM and Meta, Facebook’s parent company. Coursera sells the platform to colleges, which can make it available to their students.
Jeff Maggioncaldo, CEO of Coursera, compared Career Academy to Shopify, an e-commerce platform that allows merchants to quickly build online stores. Colleges can use Career Academy to launch their own branded skills academy.
“When they graduate, they get a college degree and a professional certificate from Google,” Maggioncaldo said. “That graduate will be better than someone who just has a college degree or someone who never went to college and just got a professional certificate.”
2U also doubles the micro data. The company announced this on Thursday he calls the two new powers Microbachelorwhich are multi-class programs that can lead to college credit from edX partner institutions.
Two new mini-BAs, both focusing on statistics, will be offered at the London School of Economics and Political Science, which is part of the University of London. The school has also launched an introductory maths course on the platform, which can be tested for free.
Students who have completed one of the undergraduate degrees and have been accepted onto certain programs at the University of London will be eligible for credit for two half-years. According to the edX website, these programs are pending credit recognition by Thomas Edison State University of New Jersey.
“It’s the perfect stack path,” said Paucek, CEO of 2U. “It’s a lot harder to do than most people outside of higher education might imagine.”
Pawcek described the proposals as “brilliant for business”, saying they would improve the marketing funnel for London University’s online bachelor’s degrees offered on the edX platform.
Companies will continue to offer educational benefits
Technology companies and investors expect learning and work to become more intertwined in the future.
Coursera, for example, sells access to its content libraries to companies, governments, and other organizations interested in training their employees. In the second quarter of 2022, this segment of Coursera’s business brought in $43.7 million, increased by 55% compared to last year.
Those efforts can help the company reach students it might not otherwise be able to attract, Maggioncaldo said.
“There are a lot of people who don’t know about Coursera. They’re not going to come to Coursera,” he said. “But they can participate in a state workforce development program, where the institution can refer them to places for employment and can direct them to use Coursera in a certain way.”
GSV Ventures’ Cohn echoed those comments, saying he expects companies to continue to offer some educational benefits. GSV Ventures has invested in Guild Education, a tuition benefits platform that connects employers with its online college platform.
“If it’s, ‘Oh, here’s $100 for a MasterClass,’ that’s probably going to go away — you know, superficial, pompous learning as a benefit.” said Cohn. “But if preparing an organization for the future is training—upgrading, upskilling people in a way that can be measured, demonstrated against business goals—we think that’s going to be a long-term trend.”