2U, Blackboard OpenLMS, and the Continuing Wave of EdTech Buyout Activity

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10 replies
  1. Ian Linkletter
    Ian Linkletter says:

    Phil, as I try to grapple with how much value these PE firms place on student data, it would be useful to know how many Moodlerooms/OpenLMS users there are. $31 million is dozens of times less valuable than the other acquisitions and seems to have the strongest privacy language: no *monetization* of user data. I wonder if it’s this language puts a damper on the acquisition value.

    Reply
    • Phil Hill
      Phil Hill says:

      Ian, while data ownership and usage are important, I don’t believe much of the value of LMS firms are based on these issues. I believe revenues, earnings, growth trends (or not) are much bigger drivers. Right now no LMS company has a credible business story on data – good enough to tell investors, but not good enough to drive company valuations in any significant manner (good in the monetization sense). Yet.

      Blackboard claims roughly 4 million active students on OpenLMS.

      See update above, where Bb says my revenue estimate was too high.

      Reply
      • Ian Linkletter
        Ian Linkletter says:

        Interesting, so the OpenLMS acquisition divides to about $7.65 per student. Instructure’s acquisition divides to about $66.66 per student (30 million Canvas users was the last reported figure in July 2019).

        Reply
      • InstGuy
        InstGuy says:

        Phil – Good write up. There is a crazy shake up going on in LMS and edu right now. 2U is in trouble and under pressure to sell. Their situation is even worse then Instructure. We should be looking more broadly at EdTech as well. content companies (i.e. Pluralsight), LMS companies, classroom tech companies, and others are all under pressure right now and it puts much of the support of schools at risk. I worry about the crappy leadership that is coming into place too. PE companies only care about one thing, $$$$$. They only care about generating cash, so they can take out more loans and buy other stuff. What they do is just cut and slash. This happened with BlackBoard when they were bought, it is happening with Powerchool under Vista, and Thoma Bravo is looking to cut 80 to 90 million in annual costs from Instructure. The situation with Instructure is really scary given that there is now no one driving the ship. There is no CEO. Dan is gone, Josh is not involved, and, even though Thoma Bravo does not own the company yet, they have put a guy in Instructure who is calling the shots already and making changes. His name is Charles Goodman, a guy who is an operating partner and has gone into companies in the past and just cut a bunch of people and cost. His email is [redacted]. You should talk to him. In fact, you should all email him and ask what his plans are for the company, then watch him dance. Also – they are already looking at buying Blackboard. They would then have “all of the data” to do what they wanted.

        Reply

Trackbacks & Pingbacks

  1. […] Phil Hill reviews the recent space of consolidation within EdTech (Covers Blackboard’s sale of OpenLMS, SmartSparrow selling its assets to Pearson, the merger of McGraw-Hill Education and Cengage and 2U looking for a buyer) […]

  2. […] the ed tech landscape is experiencing more consolidation, ed tech consultant Phil Hill wrote in a blog post this week discussing Blackboard’s decision. “To a large degree,” he wrote, […]

  3. […] the ed tech landscape is experiencing more consolidation, ed tech consultant Phil Hill wrote in a blog post this week discussing Blackboard’s decision. “To a large degree,” he wrote, […]

  4. […] analyst Phil Hill wrote in a blog post that $31 million is close to Moodlerooms’ revenue at the time of Blackboard and Moodle ending […]

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