Expect a swathe of consolidation in the European e-learning sector in the coming months. Edxus Group, a new London-based corporate operating edtech company, is planning to plough in €50-60 million ($64-$77 million) over the next 18 months to develop and acquire European e-learning businesses and build out a single regional player with the scale to compete against U.S. edtech giants, it said today.
Edxus plans to execute the first phase of its “buy and build” strategy over the next three to four months, deploying an initial €15-20 million to “consolidate a handful of European e-learning companies”. Asked whether it’s looking to acquire startups or not, Edxus said its interest is in “companies with €2m to €10m turnover and with an established presence in the market” — so early stage e-learning startups are not on its radar, at least. It added that target companies will also have “a top line revenue growth of 25% year on year”.
It did not specify which companies specifically it is looking at but the general target is those serving the K-12/primary and secondary school market. Northern Europe and the U.K. are the initial markets for the first wave of investment, with other European regions “under assessment for future plans”. The aim is to bring together “complementary expertise and products in curricula, data and instructional systems”, it added.
Edxus said its overarching aim is to rival similar U.S.-backed moves. In the U.S. edtech giants such as Pearson, Blackboard, Macmillan, Kaplan and McGraw-Hill top the list of acquisitive e-learning companies. The European market is more fragmented and ripe for consolidation, according to Edxus — meaning a local scale player is needed to ensure U.S. companies don’t end up dominating the region too.
“The US e-Learning market is already a few years ahead of Europe,” commented Edxus Group co-founder and CEO Benjamin Vedrenne-Cloquet in a statement. “Unless we can create scale and a fertile ecosystem, the European e-learning space will be dominated by American content and software. This buy and build strategy is designed to help foster the consolidation, scale and operational efficiencies required in Europe to help e-Learning companies to thrive.”
Edxus’ initial investment funds come from its partner and backer: specialist media investment and advisory firm IBIS Capital. Edxus confirmed IBIS will be funding the full program of consolidation, not just the first wave.
“The European e-Learning industry currently displays both disruptive innovation and rapid growth but it is highly fragmented and lacks a dominant player. These are all characteristics of an attractive pre-consolidation phase industry so we expect our strategy to help the marketplace as a whole meet its enormous potential,” said IBIS Capital’s co-founder and CEO, Charles McIntyre, in a statement.
Rushmore.fm, a new London-based startup founded by Fictive Kin and Betaworks, is de-cloaking somewhat today with what sounds like the rather lofty but noble mission to fix the music industry. Described as a “music ecosystem”, the (currently) invite-only site initially consists of a Wikipedia-like music resource where you’re encouraged to contribute and follow content, although the site’s broader aim is to connect music fans “directly and effortlessly with the artists and labels they love”, and in doing so make it easier to make a living from music.
In fact, it’s what Rushmore sees as a disconnect between fans and artists that it’s trying to solve. Bring these two groups closer together and the company thinks there’s money to be made, which in turn can be reinvested in music. Of course, if it’s successful, that’s also how the startup plans to generate revenue via related services. “We need to get these folks connected with the fans that love them, and subsequently enable some sweet, sweet commerce,” reads the site’s mission statement.
With that in mind, along with its public (partial) unveiling, Rushmore is announcing the appointment of Alex Hunter, the former Global Head of Online for Richard Branson’s Virgin Group, as its CEO. While it may seem odd to hire an “outside” CEO so early, it’s a reflection of the incubation model that New York-based Betaworks, Rushmore’s backer, is employing. It’s teamed up with neighbouring design collective Fictive Kin who are charged with researching and coming up with a startup’s concept, before handing it over to take forward and scale — a methodology we’ve compared to the studio model employed by Hollywood.
Once Rushmore.fm was green-lighted at the end of 2012, Hunter was approached and after agreeing to come onboard it was decided the company should operate out of London, which has a decent track record for music-oriented startups. Last.fm, for example, famously exited to CBS, while more recently the likes of Songkick are making decent headway.
(As aside, for those familiar with the London tech scene, Alex Hunter is the brother of Andrew Hunter, co-founder and CEO of jobs search engine Adzuna.)
As Rushmore stands today, the site uses a “follow” model to provide a way for music fans to stay up to date with news, live events, and new releases from their favourite artists. The clincher is that, collectively, they’re also the ones doing most of the work in the sense that content is at least partially based on user contributions (pages have a Wiki-esque “edit” button, though I’m told that contributors will always be invite-only), while Rushmore is rewarding fans who add content via virtual and unspecified real world rewards. There’s a sprinkling of gamification, too. Each week fans compete for the top spots on “The 300″, described as a “highly competitive chart of Rushmore’s top users”.
To that end, Rushmore says that its private beta users have made 200,000 music news, live event, and discography contributions already, which isn’t bad going, though we won’t declare the music industry fixed just yet.
Hearsay Social, a Sequoia- and NEA-backed company that helps large organizations manage their social media presence across local branches and sales teams, is announcing that it has opened an office in London. Co-founder and Chief Technology Officer Steve Garrity said it is the first step in the company’s European expansion.
The new office will be led by Peter Caryotis, who previously managed IBM’s Northern Europe Platform Computing business. The company says it has also updated its products to support German, French and Spanish.
One of Hearsay’s big selling points is the fact that it enables salespeople to post to Facebook, Twitter, LinkedIn, and elsewhere in a way that’s compliant with regulations. That’s presumably one of the reasons why Hearsay customers include a number of financial and insurance firms, including Zurich Insurance, Allstate, AXA Equitable, and Northwestern Mutual. So does expanding into countries with different regulatory requirements present a big challenge?
“Although regulations are different worldwide, they are generally focused on the same key issues, such as privacy and consumer protection,” Garrity said, adding that the team wants “to enable social selling in diverse regulatory environments.”
In the press release, Caryotis made a related point: “Social media usage continues to grow in the UK, but many organisations, especially those in highly regulated markets such as financial services, are still trying to figure out how to leverage the social networks to generate revenue.”
Garrity added that Europe isn’t an entirely new market for Hearsay, since it already works with some U.S. companies that have a European presence.