K12, Blackboard Among Rush of M&A Activity in Ed Tech

There has been a new push for mergers and acquisitions in ed tech companies, especially in the elementary and secondary sectors. Among those, Herndon, Virginia-based K12, helmed by Ron Packard. They recently bought KC Distance Learning and earlier this week, we pointed to a purchase of American Education Corporation.
Here’s a small list of recent transactions:

Washington-based Blackboard Inc., a learning-management-system company that operates in higher education and K-12 and was one of the most aggressive players this year, has purchased several smaller ed-tech companies.
• Promethean World, a Blackburn, England-based education technology company that makes interactive whiteboards, bought SynapticMash, a learning-management-system and data-collection company based in Seattle.
• Scantron, an Eagan, Minn.-based company that makes assessment and data-collection products, scooped up Spectrum K12, a Towson, Md.-based company that provides software for response-to-intervention programs.
• And K12 Inc., a Herndon, Va.-based online-learning and e-course company, recently bought KC Distance Learning, a Portland, Ore.-based online-learning company.

Interestingly, that has end-users like CTOs worried about lack of support for new equipment or software.

“[Chief technology officers] are looking for a single supportive solution,” said Mike Lawrence, the executive director of Computer-Using Educators Inc., a Walnut Creek, Calif.-based ed-tech advocacy group that runs leadership and training programs across California. “But they also value choice and competition.”
The problem, he said, is that once the companies merge, the new entities usually cut staff. “Instead of two systems, we’ll have one,” he said. “So CTOs end up with less support. I’ve seen that in district after district.”

And the one thing that I will disagree with in this article, the thought that with mergers, there is less of an appetite for working with smaller upstarts.

And some school leaders pointed out that with tight technology budgets, there’s less appetite for using innovative but relatively untested smaller companies. “Buying anything is one of my biggest challenges,” said Steven Keller, the superintendent of the 8,300-student Redondo Beach Unified School District in California. “We just don’t have the money.”

I disagree with the letter, not the law, here, and I may question the overall picture. In terms of sentiment, I think the reason maybe school leaders won’t work with smaller companies is because they are less inclined to do so anyway. it’s been my impression that school leaders stick to what is known. Even if there were a host of new education companies — and there are (more on that later) — it’s my bet that school leaders would continue to stick with the big dogs. That’s probably why I don’t understand the CTOs sentiment in that earlier quote either. Sure, he’s probably going to have less staff to deal with in the enlarged company, but that staff is usually pretty good to begin with, and it’s something of a trend with innovation to do more with less.
Back to what I said about upstarts in education. I talked with someone in Chile, who helps out at an entrepreneur incubator there, funded by the Chilean government. That person told me that there has been a rush of education startup companies headed to Chile to take part in the program, and that all but one of those companies comes from the United States. The one exception is a company from China. The person could not tell me the names of the companies. If you know, please tell us.