EdtechX Holdings Acquisition Corp. II, the edtech-focused special purpose acquisition company (SPAC), has announced that it will use a pioneering method to evaluate the ESG (environmental, social and governance) credentials of potential target businesses in the edtech space.
The edtech investment platform said the proprietary methodology, one of the first of its kind in the edtech sector, was developed by European edtech investment platform EdtechX Holdings, along with specialist education technology investment bank IBIS Capital.
It examines seven ESG metrics material to the edtech sector including factors such as reach and affordability, efficacy of education or training, responsible selling and marketing practices, customer privacy and data security among others.
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The company noted that key performance indicators within each edtech-specific category, such as the number of students enrolled (including those enrolled from underserved geographies and low-income households), course completion rates and job-placement rates, will help investors to accurately assess the efficacy of ESG initiatives and the strengths, weaknesses, and risks of potential investments in the sector.
“EdtechX and IBIS Capital hope its comprehensive methodology will also help edtech companies assess their own ESG criteria and performance, as well as assisting the rising number of generalist investors seeking to enter the space,” the company said in a statement.
“EdtechX Holdings Acquisition Corp. II will be the first SPAC to evaluate potential investments in this way, with the aim of attracting impact investors to the edtech industry,” it added.
EdtechX, which last year launched the ‘SPACs for Good’ campaign, said ESG is a core focus for the company.
The pledge saw co-founders Benjamin Vedrenne-Cloquet and Charles McIntyre grant 4% of their SPAC founders shares to not-for-profit initiatives which support the digitalisation of education.
The campaign also encourages other SPAC founders and sponsor teams to pledge a minimum of 1% of their founders' shares as a grant for the same causes. The co-founders hope to establish the campaign as a market standard, the company said.
EdtechX pointed out that the coronavirus (COVID-19) pandemic significantly impacted learning as most educational institutions swiftly transitioned to a remote or hybrid learning model comprised of a mix of in-person and virtual education.
“While challenging to execute, this rapid shift accelerated advancements in the field of education technology and a hybrid model will undoubtedly be retained going forward to enhance traditional education,” Benjamin Vedrenne-Cloquet, CEO and co-founder of EdtechX and partner at IBIS Capital said in a statement.
“It is therefore imperative that edtech companies operating in this exciting space remain on top of not only the technological challenges this structure poses but also the relevant ESG factors required to ensure the success of the model in bringing equality to accessibility of education.
“We expect this methodology to support a shift towards ESG excellence in the sector.”
Contact the author at stephen.gunnion@proactiveinvestors.com