Checking In On K-12: 3 Key Themes
Insights from Baird’s Private Company Technology & Services Conference
At the firm’s 2025 Private Company Technology & Services Conference, Baird Global Investment Banking held a panel with experts from across the education market to discuss a few major themes impacting the K-12 landscape today.
Moderated by Dan Alfe, Managing Director, Co-Lead of Baird’s Knowledge Solutions Practice, and Vanessa Webb, Partner and Co-Head of Oliver Wyman’s Global Education Practice, the panel included executive perspectives from Jim Hall, CEO – K12 Coalition; Dusty Moore, CEO – iCEV; and Terry Swanson, CEI – Singlewire Software.
The panel focused on three of the most relevant current themes in K-12, including:
- Teacher shortage and lagging U.S. student outcomes
- Students’ workforce readiness and closing the skill gap
- School safety
Skating to the Puck
After several years of districts prioritizing their budgetary resources on facilitating remote and hybrid instruction during the pandemic, their focus has shifted back towards some of the most urgent challenges facing schools’ delivery within the four walls -- which include addressing the teacher shortage, preparing students with job-ready skills through career and technical education (CTE), and ensuring safety in the classroom. These “hot” areas are also interconnected – for example, the teacher shortage negatively impacts students’ job readiness and the workforce skill gap, and high teacher turnover is worsened by their understandable concerns around school safety. These are specialized areas, so while the need for these solutions is urgent, there are fewer industry players which is creating a “land grab” in these markets.
Shielded from ESSER Cliff
With the roughly $190 billion federal Covid relief funding formally expiring this past January, many providers serving K-12 experienced lower renewal rates, pricing pressure, and elongated sales cycles for the 2024-25 academic year. With even the dollars available for states and districts that requested “late liquidation” extensions now running out, K-12 vendors and solutions providers expect to see greater challenges in 2025-26 school year facing the first full academic year in a truly post-ESSER world. However, there are selected categories of mission-critical, non-discretionary services, often with dedicated state or federal funding streams, that experts expect to be insulated from these impacts.
Reliance on Third Party Expertise
Given these are dynamic areas and require expertise that districts don’t often have in-house (e.g., CTE staff with auto repair expertise), they need third-party assistance. The empirical data shows superior outcomes relative to districts doing it themselves, thus “going at it alone” is an increasingly unviable option. As a result, district customers tend to be stickier and less price sensitive in these categories. There is significant whitespace given outsourcing is still nascent in these areas.
AI: More Friend Than Foe
While many in K-12 (particularly content-driven businesses) have expressed concern around disruption or disintermediation from Generative AI, the consensus from our panelists was that they see more opportunity than threat from AI. In addition to improving their operating efficiency and accelerating time-to-market of their offerings, AI is increasingly being leveraged to analyze students’ work, and in turn, facilitating individualized instruction by tailoring curriculum to learners’ unique needs. Another current application of AI is analyzing district data to uncover patterns around student outcomes. Looking into the near future, emerging AI technologies are being incorporated into predictive applications, for example, audio and video AI are beginning to be leveraged in school safety solutions to help with weapon identification and proactive threat assessment.
Baird’s Knowledge Solutions Investment Banking Team
We welcome the opportunity to discuss the these themes and how Baird’s Knowledge Solutions team can assist your business growth and strategic objectives.
