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Nonobvious acquisitions are on my 2021 bingo board

Published April 3, 2021

At the end of 2020, I argued that edtech needs to think bigger in order to stay relevant after the pandemic. I urged founders to think less about how to bundle and unbundle lecture experience, and more about how to replace outdated systems and methods with new, tech-powered solutions. In other words, don’t simply put engaging content on a screen, but innovate on what that screen looks like, tracks and offers.

A few months into 2021, the exit environment in edtech…feels like it’s doing exactly that. The same startups that hit billion and multi-billion valuations during the pandemic are scooping up new talent to broaden their service offerings.

Ruben Harris, the founder of Career Karma, a platform that matches aspiring coding professionals to bootcamps, put together a massive report recently with his team to talk about the pandemic’s impact on the bootcamp market.

James Gallagher, the author of the report, tells me:

It is important to note that the full potential of bootcamps has not yet been realised. We are now seeing more exploration of niches like technology sales which provide gateways into new careers in tech for people who otherwise may not have been able to acquire training. To scale such models, new businesses will need venture capital.

He went on to explain how a notable acquisition from 2020 was K12 scooping up Galvanize, “which would give K12 exposure into corporate training and the coding bootcamp space, a market outside of K12’s focus at the moment.”

To me this report signal two things: the financial interest in boot camps isn’t simply stemming from other bootcamps (although that is happening), but it’s surprising partnerships. Leaving this subsector, we see creative acquisitions such as a Roblox for edtech buying a language learning tool, and a startup known for flashcards scooping up a tech tutoring service.

Readers should know by this point that I love a nonobvious acquisition (except when this almost happened), so if you have any more tips on coming deals in edtech, please Signal me or direct message me on Twitter.

I’ll end with this: Successful startup founders are innately ambitious, finding opportunity in moonshots and convincing others that the odds are in their favor. However, the ceiling for what defines ambition heightens almost everyday. What used to be a win is now a nonnegotiable, and a feat is only a feat until your competitor hits the exact same milestone.

To win post-pandemic, edtech needs to start thinking big

Acquisitions are one way to scoop up competition and synergistic talent, but it’s what happens next that matters the most.

In the rest of this newsletter, we will talk about Clubhouse competitors, how a homegrown experiment became one of the fastest growing companies in fitness tech and a cool-down in public markets (?!). As always, you can get this newsletter in your inbox each Saturday morning, so subscribe here to join the cool kids.

Clubhouse might create billions in value, but could capture none of it

Remember when everyone was buzzing around about building Stories? That’s so pre-pandemic. A number of companies recently announced plans to build their own versions of Clubhouse, after the buzzy app unearthed the consumer love for audio.

Here’s what to know: It might be easier to start guessing who isn’t building a Clubhouse clone at this point. Our predictions are already starting, but jokes aside, the rise in clones could mean that Clubhouse might have to make a run for its pre-monetized money (cough, cough, Twitter spaces). It doesn’t matter if a startup is first in unlocking a key insight, all that matters is who executes that key insight the best.

Image Credits: Getty Images

A strong unicorn, literally

Tonal, a fitness tech startup, became a unicorn this week after raising a new tranche of capital.

Here’s what to know: The new status underscores market growth for at-home fitness solutions. And while we don’t have a Tonal S-1 yet, we do have a Tonal EC-1. EC-1’s are TechCrunch’s riff on an S-1, and are essentially a deep dive into a company.

The Tonal EC-1

Reporter JP Mangalindan wrote thousands and thousands of words about Tonal, from its origin story to business model, its focus on communities and its biggest hurdles ahead.

Image Credits: Nigel Sussman

Initial public o….no

You’ve probably had a better week than Compass, Deliveroo and Kaltura. The three companies all had different events that illustrate a potential damper on the part that has been the public markets.

Here’s what to know: Compass cut its shares and lowered pricing of said shares, Deliveroo had a rough debut as a delivery company on the public markets, and Kaltura postponed its IPO after valuation demand didn’t hit expectations.

In other news, though:

Photo Taken In Arizona, United States. Image Credits: Jure Batagelj / 500px / Getty Images

Around TechCrunch

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Swell launches its app for asynchronous voice conversations

Published March 15, 2021

You might think that Clubhouse is the final word on audio-centric social networks, but a San Francisco startup called Swell is launching its own iOS and Android app focused on voice conversations.

The big difference: While conversations on Clubhouse all happen in real time — meaning that you’ve got to listen live or miss it all (at least for now) — Swell is focused on asynchronous comments. In other words, users post a standalone audio clip that can be up to five minutes in length (with an accompanying image and links), then other users can browse, listen and leave their own audio responses in their own time.

Swell supports audio-only group chats and private conversations, as well as public “Swellcasts” — think of a bite-sized podcast, or a Clubhouse-style conversation that’s structured more like a comment thread than a free-for-all. Users can also promote their public posts through their own pages on the Swellcast website.

Swell is led by husband-and-wife team Sudha Varadarajan and Arish Ali, who previously founded e-commerce company Skava and sold it to Infosys.

Varadarajan (the startup’s CEO) described the app as an attempt to “democratize” audio content creation, with no special equipment or serious production required, and allowing users to talk about anything. (In one example, the Swellcaster was outside talking about their front lawn.)

At the same time, she suggested that the app was created less as a response to Clubhouse and more as a general antidote to social media, where the pair saw increasing polarization and fewer genuine conversations.

Audio is hardly immune to ranting and anger — just look at talk radio. But Varadarajan suggested that making the posts asynchronous doesn’t just make it easier for listeners to catch up; it also improves the quality of the conversation: “People really think about what they’re going to say.”

She added that the company is determined to avoid any ad-based business models and instead make money by charging for premium tools and Swellcasts.

Until now, Swell has only been open to a small group of users. Today it’s launching more broadly, in advance of its session tomorrow at the virtual SXSW, “Voice is transforming our online presence. Why?”

Will audio livestreaming take off in America?

Clubhouse voice chat leads a wave of spontaneous social apps

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