But some critics  worry that there are too few of those winners, and they point to the tiny revenue streams so far produced by many ed-tech companies — especially those making MOOCs — as cause for concern.

They also point to the initial public offering of the ed-tech company Chegg.

Expectations were high when the textbook rental service (and so-called “student hub”) announced it was going public in December. The price was set at $12.50 per share, but it dropped nearly 23 percent in one day. The reaction by journalists and insiders was harsh. Chegg didn’t just stumble; it fell flat, slumped, and was “the IPO disappointment of the week.”

Deborah Quazzo, founder of Global Silicon Valley Advisors, says the reaction to Chegg’s debut has been “much ado about nothing.”

“Obviously at Chegg, everyone would prefer it to go up, but the reality is that trading has very little to do with what a company does,” Quazzo says. “It becomes more of an art than a science.”

Chegg did manage to raise nearly $200-million in its debut. That’s more than the $150-million it said it was seeking in its original S-1 filing. IPOs are just the start of a longer process, she says, pointing to Facebook’s debut in 2012, which was widely seen as a disaster. The social network has since bounced back (albeit, slowly) and closed at its original IPO price.

“With IPOs, there are all kinds of psychological factors that come into play that don’t have anything to do with a company’s fundamentals,” Quazzo says. “I think you can read too much into factors outside of a company’s control.”

At the ASU-GSV summit in May, ed-tech executives Jonathan Harber, Jonathan Grayer and Chris Hoehn-Saric all agreed that there is an ed-tech bubble. At the same time, they said they weren’t sure if the bubble would burst any time soon, and the bubble can actually be a positive thing for now.

“It brings a lot of talent in,” Grayer said.

(Next page: Ed-tech’s “new normal”)


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