TAKING STOCK: Phil Hill of e-Literate thinks the furor over edtech startups might belie the reality of the edtech business. In a recent post, he argues that, though startups may be receiving record investment, their aspirations might have a ceiling. Large education companies are floundering in the stock market.
Hill created a composite of the market capitalizations of four large education companies: Pearson, Wiley, Apollo Group, and Bridgepoint (Ashford). From 2014 to 2015, their market capitalizations—calculated by the number of shares times the price of a share—depreciated by more than half, declining from $25 billion to $11.28 billion. The fall began in earnest in April of 2015, according to Hill's analysis. There's one question on everyone's mind now: What will this mean for investment in 2016 if investors aren't seeing returns?