Last week BMO held its 16th Annual Back to School Conference. This education-focused forum for executives and investors alike reached its largest program to date, with over 80 presenting companies and dozens of industry panels and company presentations. Key highlights from the conference include:
- TLAs (Three-Letter Acronyms) Abound – When it comes to K-12 education there is no shortage of acronyms: SIS, LMS, CMS, ISD, LEA, IEP, etc. While keeping everything straight can sometimes be a challenge, the bigger issue is integrating the disorganized and dysfunctional array of student/teacher data and educational content in order to enhance outcomes. With the average teacher touching 10+ systems and the average district administrator touching 30+ systems, improvements in interoperability and efficiency are a primary focus. Various platforms are emerging in the market to address this need, with advancements coming from providers in each of the student information, learning management, and content management verticals, among others. That said, a single solution remains unlikely, thus providing numerous opportunities to address this ongoing trend in K-12 education.
- The Infamous Skills Gap – Affecting both higher education and corporate training, the focus on competency- or skills-based (rather than degree-based) education and recruitment continues to sharpen. Much debate remains as to whether there truly exists a skills gap in the market or if the issue is instead a data or information gap. While the answer is likely a combination of both, the challenge becomes identifying and addressing the origin of the gap: is it higher education, employer demand, student preferences, or other drivers? Many companies are working to close the gap in house by upscaling their existing talent pools through training, while others are investing in tools to improve hiring. Colleges and universities are also evolving with blended learning models and skills-based offerings. Numerous point solutions serving each of the corporate and higher education sectors have also emerged. While reports of the degree’s death remain greatly exaggerated, opportunities to support new competency-based delivery modalities and to help companies or schools address the skills gap challenge will continue to materialize.
- Policy Matters – No education conference would be complete without discussions on public policy. Add in an election year and the spotlight on policy brightens. In K-12 education, No Child Left Behind (NCLB) is out and Every Student Succeeds (ESSA) is in. While states and districts are optimistic regarding the new legislation, the impact will become clearer over the next year with full implementation scheduled for the 2017-2018 school year. In higher education, the focus continues to be on reducing the burden of student loans and enhancing student outcomes and job placements. While new models of credentialing and competency-based offerings are emerging, a policy lag will need to be bridged to support innovation. As the election season continues to evolve, more will be learned regarding policies for pre-K, charter schools, student loans and more.
The overall takeaway from Back to School 2016 is that education continues to be a dynamic sector, with numerous opportunities for growth and investment through successful navigation of the evolving ecosystem of providers and ever changing policy landscape.
New Harbor Capital continues to actively focus on the education sector for investment opportunities. Most recently, in February, we invested in Certica Solutions, a software and services company serving the testing, measurement and data quality needs of K-12 school districts. We believe that Certica is ideally positioned to address the systems and data interoperability challenges discussed at the conference with its Certica Connect platform as a service offering. New Harbor continues to seek opportunities to partner with founders and management teams of growth-oriented, education services businesses with $3MM – $15MM of EBITDA. Please contact Tom Formolo or Jocelyn Stanley with any opportunities you’d like to discuss in greater detail.