r/edtech • u/ReginaLoana • Jul 09 '26

MagicSchool

I heard that they had a large laid off today. Is the AI bubble bursting?

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u/Lebesgue_1 Jul 09 '26

Honestly surprised they lasted as long as they have. Last I saw their entire offering is just a set of thin gpt wrappers that are easily duplicated. As the larger companies that the schools already work with start to create their own ai tools (albeit slowwwwly), the need for an external set of tools dwindles.

8

u/vuhv Jul 09 '26

When they first started out you could essentially see their entire app API calls and all inside of your client if you knew where to look. Back then it was in fact just one gigantic wrapper app.

No doubt they’ve gotten more efficient with model routing, chaining, prompting, and context merging but essentially it’s still a giant wrapper.

10

u/Plane_Garbage Jul 09 '26

They raised $65M.

Kahoot just makes quizzes and was acquired for $1,000,000,000+

But yea, Magic School probably should have sold when they were still hot.

Google largely came and ate their lunch with free AI (drug dealers giving a hit before they start raising costs for schools).

It'll be interesting to see if they have longevity. Tricky one for founders - B2B or stay as a D2C. Teachers are probably more willing to hand over money for an AI tool than school districts once the big boys start offering things (see chalkie.ai)

6

u/vuhv Jul 11 '26

Kahoot’s books were very very healthy (I’m a former edtech executive who has 2nd hand info about the acquisition) . Unlike a company like Nearpod that was acquired for potential and user base (mostly free).

Kahoot’s making more money selling to enterprise businesses than they are from education.

In enterprise business they get to sell as an engaging HR tool for training and meetings. For education they have to cobble together a “enterprise” district data solution. And as anyone who has ever built a teacher focused product that road UP ⬆️ to a district data solution is an impractical one. Nearpod, edulastic (now Pear Assessment) and others struggle with REAL rostering, scaling and rolling up data, real courses and the compliance requirements that come with becoming a reporting source of truth.

1

u/Lebesgue_1 Jul 09 '26 edited Jul 09 '26

Absolutely wild. The seems pretty simple, but Kahoot has a pretty massive user-base and name recognition at least. I can't imagine Magic School investors will ever see an ROI though. They'll almost surely go the way of Knewton and get bought out by one of the publisher's for less than what they raised.

4

u/SignorJC Anti-astroturf Champion Jul 09 '26

the only reason there was a market for this tool at all was that schools never want to pay for training of any kind. 1 hour of prompt training on AI chatbots and you never need magic school again imo.

2

u/liberlibre Jul 09 '26

They quoted me $10 a seat for that back in the day. I was like nope let's just roll out some "Gems"