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4 March 2013

Macmillan’s wind of change

"With Veduca we have already invested in one of the leading MOOCs in Brazil."

Author: James Mawson

Publisher Macmillan’s corporate venturing unit’s investment in two Brazil-based education technology companies, Veduca and Easyaula bring to mind UK prime minister Harold Macmillan speech to South Africa’s parliament in 1960, when he said: “The wind of change is blowing through this continent [Africa]. Whether we like it or not, this growth of national consciousness is a political fact.”

The speech heralded the independence of the British colonies and dependencies and Dominions in Africa and elsewhere round the world that decade but in a different context, Macmillan’s words could be applied to the explosion of national consciousness about innovation and regional diversity that is forming. It is also illustrative of the changes affecting higher eduction, through massive open online courses (MOOCs).

Veduca, a Brazil-based online video platform for educational content, raised $740,000 in its seed round from a consortium including Macmillan Digital Education, which has been active in the country since 1994.

Macmillan has invested in three technology-led corporate venturing and incubation businesses over the past two years:  Macmillan Digital Education, which invests into and builds consumer-focused educational services, such as Tutoria; Digital Science, which specialises in providing software solutions for scientists since its launch in 2010 and has also made corporate venturing investments in BioData, SureChem, Labtiva, 1DegreeBio, Bioraft and Symplectic; and Macmillan New Ventures, which discovers and develops technologies for educational development, such as I>clicker, Educational Benchmarking and PrepU,and was launched in June.

Matthias Ick, managing director of Macmillan Digital Education (pictured), which was founded in 2012 as a UK-based subsidiary of Germany-based publisher Holtzbrinck, said: “This is a major step in our intention to provide a catalyst for the next phase of our ambitious plans in Brazil and the wider region. Together with Veduca and Easyaula, we will support and enhance the development of technology driven-education in Brazil. Both brands will play an important role in helping us reach our goal to support people in their life-long learning journey.” (See below for the Global Corporate Venturing Q&A with him.)

Veduca shows videos in their original English language format, subtitled in Portuguese, while Easyaula is an online educational marketplace that makes it easy for people to learn anything from anyone.

Macmillan said it could help the companies internationalise. This is part of the wave ot local-to-global entrepreneurs that develop in one region but through the internet can apply their models more globally, either as reverse innovation into richer countries or as part of an emerging-to-emerging markets business model, perhaps best exemplified by South Africa-based media group Naspers’ corporate venturing unit, MIH.

This topic of regional innovation and globalization as well as research to commercialisation from academia through corporate partners will be key strands of discussion at the next Symposium in May in London when Naspers’ Charles Searle will give a keynote and we welcome a host of industry leaders from around the world – to which readers of this analysis are most welcome to join – agenda here. Gregg Bayes-Brown, news editor of Global University Venturing, will be writing about MOOCs in the forthcoming magazine - please email him for more details.

Q&A with Matthias Ick, managing director of Macmillan Digital Education, via a spokeswoman:

Q: Do you connect to university venturing funds [Global University Venturing] in this area and MOOCs and higher ed seems a great area for disruption)?

A: The MOOCs currently raise a lot of attention, mainly driven by impressive usage statistics. So it is being demonstrated that people are interested and actually see the benefits in accessing even the highest quality university courses online.  The potential to reach worldwide learners with a single course is fascinating. We are following the market and with Veduca we have already invested in one of the leading MOOCs in Brazil. For the Universities the MOOCs offer a great opportunity to increase their reach and it will be interesting to see what models prove to be mutually beneficial and sustainable.

Q: Has Macmillan published in Portuguese or are these deals an entry into that market?

A: Macmillan has a long and rich history of commitment to the teaching of English at all levels and has been active in Brazil since 1994. Through Macmillan Education, it has been giving special attention to producing teaching materials that reflect the cultural conditions and country specific curriculum, providing teachers, students and educational institutions a wide range of high-quality tailor-made materials in print and electronic format for almost twenty years.  These two investments constitute the entry of Macmillan Digital Education into Brazil and we will focus on further opportunities in new technology and service-driven areas of the education market.

Q: Or is it more about seeing great ed-tech entrepreneurs in any space and backing the ideas and maybe taking them more international through your network?

A: Obviously having a great team is an important investment criteria for us. Both Diego Alvares [sic – Álvarez, CEO and founder] of Easyaula, and Carlos Souza, [co-founder of Veduca in partnership with Andre Tachian,] are among the great new wave of Brazilian ed-tech entrepreneurs developing new platforms to make learning better accessible and more effective for Brazilians. Beyond funding we strive to facilitate the growth of our portfolio companies by leveraging our network and expertise. Macmillan's global footprint can be of great help to internationalise successful services quicker.  Both companies are currently laser focused on the Brazilian market, but once they internationalise we will fully support them.

Q: Holtzbrinck seems to have multiple venturing units - Digital Science, New Ventures and yet spun off Holtzbrinck Ventures at the headquarters - how do they fit together or what is the bigger picture on this? 

A:   Macmillan Digital Education’s investments are part of a broader initiative to investment in start-up businesses within Macmillan’s Science & Education division. Under its CEO Annette Thomas’s direction, the division has invested in three technology-led start-up businesses over the past two years:  Macmillan Digital Education, which invests into and builds consumer-focused educational services, Digital Science, which specializes in providing software solutions for scientists and Macmillan New Ventures, which discovers and develops innovative and proven technologies for educational development.    We have a long and rich heritage in providing content for science, education and scholarly businesses. These more established businesses have all built strong brands and an enviable track record for editorial excellence by taking a content-led, technology enabled approach.   With our new digital businesses, we have started to play on the strengths we have in those markets to extend the brands we have into technological products and services. We’ve been investing heavily in digital counterparts for each of these areas with a brief to optimise, innovate and transform the markets.    It is the fusion of the disruptive technology start-up businesses with the editorially rich established players that enables Macmillan to evolve its overall business and fuel quicker access to new markets and new opportunities.     

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