Banning, Doresa (2102) Online education start-up Udacity Raises $15 million in funding, CityTownInfo.com, October 26
According to the National Venture Capital Association, a staggering $463 million has already been invested this year by venture capitalists into educational technology companies in the USA.
This year some of the online start-ups that have received venture capital funding are:
- Udacity: $15 million this week; total: $21 million
- Coursera: $16 million in April
- 2U (formerly 2tor): $26 million in April
- Codeacademy: $10 million in June.
- Desire2Learn: $80 million in September (not a start-up, of course, but still a significant online education company. For more information on the investment click here)
At the same time, the California two year college system has undergone nearly $1 billion of cuts since 2008, resulting in a waiting list of 470,000 students who cannot get into classes.
The California State University system meanwhile is outsourcing most of the services for CalState Online to Pearson.
In the forthcoming November elections in California, in order for the governor to increase some state taxes, proposition 30 attempts to get round the infamous proposition 13 in 1978 that outlawed any property tax increases for ever in California, resulting in the state going into effective bankruptcy last year.
Clearly the USA is in the process of undermining their public state system of education (at all levels) and in effect privatizing education. Frankly, what American’s do in their own bedrooms is none of my business.
My concern though is that in the urge to get a return on their investment, these privatized, American online companies will start to gnaw away at the funding behind public education systems in countries outside the United States. And as an aside, where the hell are the Canadian venture capitalists? (Still waiting for the Northern Gateway Pipeline, no doubt – so last century).
It is clearly the goal of the xMOOC companies such as Coursera and Udacity to go global with their offerings. This will be necessary to get a return on the capital invested. But where will these revenues come from? In the USA, it is clearly being diverted from the public education system. Will the same begin to happen in Canada or Europe or Africa as U.S. MOOCs spread?
The least we should know are the business models for getting their money back. Whose money will it be?