ED Tech: The House of Cards

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In the last week, I learned that the founders of the EdTech company I worked for finally left. I have mixed emotions about this. I poured my heart into that company for five years, and I was left with empty promises, so on one hand, I am glad they are gone. On the other hand, I do feel a bit sorry for them.
The trash bag promises that were made to me failed because of two factors. The first is the complete arrogance of my former company’s co-founders, which you can read about HERE. The second reason was out of their control, and it boils down to the scam of the parent company that acquired my former company. In the end, my former cofounders became enamored with size and valuation, and it has come back to bite them in the butt. The parent company has now completely failed, and it can be used as a lesson on the dangers of private equity funding.
This parent company got its start in India. It was founded by two former teachers (although now part of me doubts that story) and around tutoring. India has significant high-stakes testing, and these two teachers have made their name known by tutoring massive groups of Indian students in stadiums. This success made private equity take notice, and the funding started to pour in. 
I first heard of them before COVID-19, when they started expanding internationally. Their first US acquisition was a company that built apps for the iPad and used the iPad’s camera to mirror what students were doing with tangible pieces in front of the camera. I had been connected to the company through the EdTech world and was happy about their acquisition (I had friends who worked there), but the fact that the acquiring company was internationally based did give me pause.
By 2020, this company hit what they thought to be the jackpot for their business. The COVID pandemic struck, and schooling became web-based. COVID became an opportunity for a company that prides itself on online tutoring.  More funding poured in (even though revenue wasn’t close), and the company went on a spending spree, acquiring 10 Ed-Tech startups, including my former company.
Through all this, the private equity money was pouring in (even from well-known groups like Mark Zuckerberg’s foundation). Still, corporate governance might have been one of the worst situations in business history. Private Equity firms had seats on the board of directors, but they could not pull the founders with them. The founders had no interest in putting in place governing measures; their decisions were incredibly flawed, and at this point, the only conclusion is that either they are arrogant fools or it was all set up for them to get rich quickly, and it was a scam.
A multitude of insane decisions led to where we are now. There was spending 1 million + on ISTE. There was the hardware device that they bet on and then shelved. Somebody decided to keep all companies separate with separate leadership. There were what felt like the 100’s of Vice President titles that stepped over each other. There was the 60 million + in hardware inventory that one of the US companies was stuck with, but above all, there was the 1.2 billion loan the company took out to fund everything. They never thought the money spigot would turn off, and it showed. 
The story of this company shows the dangers of private equity in EdTech. It’s all a bet on potential, and those firms are never in it for students. They are there to make money, and students be damned. 
Many EdTech companies in the US are funded by private equity. While some have the resources to survive, where will others be when the check comes due? Will they make the right decisions to conserve funding? Will they spend the money to innovate when the market changes? There might be more collapses coming. Will your favorite tool be ready?