Educational publishing giant, Pearson, has lately been making a push to snatch up (and incubate) promising young EdTech startups and concepts to help it compete in an increasingly tech-influenced educational landscape. Last May, Pearson acquired Certiport, the maker and marketer of IT and digital literacy products, for $140 million, followed by the acquisition of online learning services provider EmbaNetCompass for $650 million, its taking a stake in Nook Media and TutorVista, along with launching its very own EdTech incubator program.
Today, Pearson continued this march with the acquisition of Learning Catalytics, a cloud-based learning analytics and assessment system developed by Harvard University professors Eric Mazur and Gary King, along with software engineer and current post-doctoral fellow at Harvard, Brian Lukoff.
Founded in late 2011, Learning Catalytics is a platform that allows teachers to ask their students open-ended critical thinking questions and receive feedback in realtime. But beyond simply being a student response system and allowing teachers to get a better sense of what areas students are struggling with, the startup’s platform allows teachers to split their class into groups of similar ability.
The idea is that peer-to-peer engagement can help improve student understanding of core concepts, so the startup’s platform aims to make it easy for teachers to break class down into groups for based on their response patterns. This allows teachers to let students with a more advanced understanding of the topics at hand help get their peers up to speed, while allowing the teacher to supervise and curate those groups more effectively.
As students proceed through the class, they can respond to questions in class or for homework via text, numerical, algebraic or graphical responses. Meanwhile, faculty can get a better understanding of student performance through advanced analytics, which allow them to drill down into individual student data, as well as get a better understanding of student comprehension within the particular course and as compared to the class.
Fundamentally, by allowing faculty to ask questions and view feedback in realtime in a graphical representation of their students’ comprehension of the material, Pearson is adding an important new service layer for in-class feedback and communication. Pearson’s mission at this point is to become a service provider of customized tools and learning packages for teachers and for the changing profile of today’s student in higher education. That means an increased focus on flexible, blended learning services — at both ends of the classroom.
Pearson already has an LMS system, language learning, customizable online courses, and a host of other educational services, including the content-based services that its strong foothold in textbooks allow it to offer. Furthermore, the company knows that flipped classrooms and digital learning analytics aren’t going anywhere, and that’s why it’s made an effort to adjust: For example, today, over half of its revenue is now coming from digital products and services.
Traditionally, of course, Pearson hasn’t exactly been known as a pioneer in digital technology, so like its competitors McGraw Hill and Macmillan et al, it’s had to “go digital or go home,” so to speak. And with McGraw and Cengage both selling to private equity firms in the last month, well, it’s not exactly high-times for educational publishers.
As Pearson digitizes, like every other large company, it has to decide whether to try to build products internally or become an acquirer. In Pearson’s case, acquisitions make sense in a number of scenarios, but money is tight. I suspect that’s why the company issued its “efficacy framework” — to make sure its acquisitions and investments were meeting educational standards and, well, worth the investment.
This is relevant because, in Learning Catalytics, Pearson is essentially acquiring a student response system. And there are a number of more developed, well-established SRS players on the market, including the likes of the well-funded Top Hat, Turning Technologies and i>Clickr — to name a few. But these companies would have cost Pearson a pretty penny, and although neither company is revealing the terms of the deal, we hear it’s a cash deal with “well north” of $10 million. [Update: The acquisition price estimate has been changed as we've learned more. Initially sources said "under $5 million."]
Pearson has already partnered with Top Hat to offer as part of their bundled textbook, content and software services they provide to professors, which could ostensibly make for an awkward overlap. But we’ve heard from sources that Learning Catalytics was looking for exit opportunities and had been in talks with Pearson for several months.
In part this was due to the fact that the startup hadn’t quite gotten the traction it had hoped for, but also because taking the next step to grow the business would require raising money or finding a solid strategic partner to help them expand more quickly than it would have been able to otherwise.
On the other hand, in the 20 months from launch to sale, Learning Catalytics built a solid product without raising venture capital, hiring any full-time employees or investing in physical assets (like office space). So, it looks to be a positive outcome for the three founders, especially considering that we’ve now learned that that the deal involved no earn-outs, required employee contracts or lock-ins — it was an all cash deal.
Furthermore, co-founder Brian Lukoff accepted a new position at Pearson, while Gary King and Eric Mazur (both currently professors at Harvard), were offered consulting agreements. In turn, for Pearson, the acquisition enables them to integrate a solid student response layer into their interactive learning and teaching products, without having to pay handsomely for it. And they get to keep Mazur, one of their top authors, happy in the process. A win-win.
Learning Catalytics itself has been working with about 50 institutions in K12 and higher ed, and offers free accounts to instructors, with student accounts running $12/semester and $20/year.
For more, find the Learning Catalytics founders’ letter to its users copied below:
We are thrilled to announce that Learning Catalytics has been acquired by Pearson. The new educational tools and novel data analytics in Learning Catalytics can now grow bigger, spread faster, and integrate better with other products and content, including Pearson’s widely used educational products. Learning Catalytics will continue to be available for current and new customers, and it will also have the ability to innovate further by leveraging Pearson’s considerable learning resources. Expect very big things to come.
We developed the technology behind Learning Catalytics in our research groups and classrooms at Harvard University but soon outgrew what fit there. To continue to innovate for our students and others around the world, we formed Learning Catalytics in July 2011. We could never have imagined how rapidly this technology would take off. More recently, it became clear to us that Learning Catalytics innovations have outgrown what can be accomplished in a startup, and so joining Pearson will help implement our ideas further and faster.
For help leading to this spectacular outcome, we are grateful to Pearson’s terrific team, Harvard’s Office of Technology Development, and especially our students — and other instructors and their students all over the world — who learned from Learning Catalytics and helped us learn from them.
Gary King, Brian Lukoff, Eric Mazur
Co-founders, Learning Catalytics
Pearson press release here.