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Parents told high-profile boarding school has ‘no scope’ to absorb extra cost

Eton College has warned parents that most will face paying the full 20 per cent cost of the imposition of value added tax on fees, the latest UK school to do so.

The decision by England’s most famous fee-paying school was announced on Friday in a letter to parents from Lord Waldegrave of North Hill, the school’s provost — chair of its governing fellows — and Sir Nicholas Coleridge, who is due to take over as provost in September.

The school insisted in the letter that it had no scope to absorb the 20 per cent increase by narrowing its profits, as the government has suggested schools should consider doing.

“Eton does not currently run an operating surplus,” the letter said.

Only pupils receiving bursaries — means-tested awards offering reduced fees or free education — would be unaffected, the letter added.

Chancellor of the Exchequer Rachel Reeves in July confirmed that the government would go ahead with long-standing plans to end school fees’ VAT exemption from January 2025. It has been Labour party policy since 2021 to end the exemption and use the revenue raised, expected to reach about £1.5bn, to fund state schools.

The opposition Conservative party has bitterly opposed Labour’s stance on school fees, calling it a “tax on aspiration”.

“We have decided to maintain the fees for next year as announced in May,” the letter told parents. “Therefore, from January 2025, we regret that the cost of an Eton education is likely to rise by 20 per cent as a result of the introduction of VAT.”

Fees for boarding pupils without a bursary had been set at £52,749 for the 2024-25 academic year, meaning fees will rise to about £63,300 on an annual basis after January.

Eton’s decision comes the day after the Girls’ Day School Trust, a federation of 25 fee-paying girls’ schools, said it would raise fees by only 12 per cent from January, absorbing some of the extra costs through efficiencies.

Eton College is the best-known boys’ private school in England. Its former pupils include Prince of Wales Prince William and the former prime ministers Lord David Cameron and Boris Johnson.

The Eton letter said that, as well as the VAT change, private schools with charitable status would lose their previous right to 80 per cent relief on business rates from April 2025. The only benefit for the school is that, after it becomes subject to VAT, it will be able to reclaim the VAT it pays for some other services.

“The provost and fellows appreciate that the imposition of VAT is unwelcome news and are also keenly aware of the impact of this decision on all our parents,” the letter said. “Please be assured that we will continue to focus on the costs of the school moving forward, although we will not compromise on the quality of the education provided to your sons.”

Pavel Durov, Telegram’s self-mythologising founder

Arrested in France, the social media app CEO is accused of promoting free speech idealism at the expense of safety

During a rare interview with the Financial Times in February, Telegram’s chief executive Pavel Durov boasted of having a “perfect job, perfect life”.

Sitting in his gleaming office on the 35th floor of a Dubai skyscraper, the Russian-born billionaire explained the meaning behind his messaging app’s logo — a white paper aeroplane against a blue background. “For me, it symbolises a free entity that can move in three dimensions and is not restricted by boundaries or geographic constraints,” he said.

Six months later, Durov’s charmed life has been upended and his own existence as a free entity is at stake. The elusive entrepreneur is facing a possible prison sentence in France following his arrest at an airport on Saturday. He is accused of failing to tackle criminality on Telegram — including child pornography, drug peddling and fraud — and refusing to co-operate with police data requests. A French and Emirati citizen, he has been released from custody but barred from leaving the country.

For more than a decade, Durov has sold his vision of Telegram as an online safe haven that is technologically and ideologically unassailable. He has promoted himself as an anti-establishment tech genius whose libertarian streak was borne of his experience of oppression in his native Russia. 

Both gambits were apparently successful. The app says it is nearing 1bn users while Durov is a nomadic multi-billionaire. But as his travails demonstrate, idealism at the expense of safety does not impress governments. His arrest could mark the end of an era in which tech leaders have enjoyed relatively little responsibility for the content on their platforms. Ambitious IPO plans may be thwarted.

How will Durov navigate his predicament? Should he stand his ground, he will be elevated by some as a free speech martyr. But he could face a lengthy jail sentence. “He’s always been put on a pedestal and might have felt invincible,” says Axel Neff, an estranged co-founder and former chief information officer of Telegram. That is no longer the case. “But if he changes his tune,” Neff adds, “then he’s not Pavel Durov”.  

Born in St Petersburg in 1984 to a Ukrainian mother and Russian father, Durov built the country’s equivalent to Facebook, VKontakte, in his 20s — rising to fame as the “Mark Zuckerberg of Russia”. In his telling, he was forced to leave the company — and Russia itself — in 2014 after refusing demands from Moscow to share the data of Ukrainian opposition users. 

A year earlier, Durov co-founded Telegram with his brother Nikolai. He claims the pair did so to communicate safely “because back then there was no secure messaging app”. Edward Snowden’s revelations of mass surveillance by US intelligence then inspired him to share the technology publicly, he told the FT. “I believe in the competition of ideas . . . Otherwise we can quickly degrade into authoritarianism,” he said.

Since then, the app has become a crucial communication tool for dissidents living in repressive regimes, such as Belarus and Iran. But it is also home to the darkest underbelly of the internet, including child sexual abuse material and terrorism. 

Softly spoken and always wearing black, Durov has been unapologetic in the face of scrutiny, hitting back with accusations of his own. In an interview with right-wing pundit Tucker Carlson earlier this year, he claimed that the FBI had tried to hire one of his staffers to get access to user data in the app. 

For all the self-mythologising, much of Durov’s life is still shrouded in mystery. Those who know him describe him as a visionary but also a master of spin. “He views himself as a champion of the people, but at the same time he cares about his self-image,” says Neff. “He’s a mix of vanity and nobility combined together.”

In his FT interview, Durov elaborated on his punishing health regime. After eight hours of tracked sleep, he starts the day “without exception” with 200 push-ups, 100 sit-ups and an ice bath. He does not drink, smoke, eat sugar or meat, and saves time for meditation.

In July he wrote on Telegram that he has more than 100 biological children through anonymous sperm donation across 12 countries, adding he plans to “open-source” his DNA so they could find each other more easily. His Instagram account is dominated by shirtless photos with enigmatic captions. 

There are also darker episodes: he was investigated for a hit-and-run in Russia in 2013, which he denied, and attracted US regulatory scrutiny for his cryptocurrency endeavours. A case against Durov for alleged violence against his children has been filed by his former partner in Switzerland, according to documents seen by the FT.

Mystique has also created a vacuum for political speculation: namely that he still has secret ties to Russia. Recent reports in Russian independent media claim he has visited more than 50 times since he fled.

Durov dismissed reports of such links as “conspiracy theories” and “bias”. But he refused to take sides on the Russia-Ukraine war or comment on Russia’s President Vladimir Putin, saying “Let’s not go there”. His arrest has sparked a diplomatic firestorm between Paris and Moscow, with the latter calling for his release.

Durov’s neutrality has ultimately hurt his bid to distance himself from Russia, says Aleksandra Urman, a social media expert at the University of Zurich. “Authoritarian, or pro-democratic. He still chooses nothing.”

Discussions come as Apple, Nvidia and Microsoft consider participating in round that would value AI start-up at over $100bn

OpenAI is in discussions about changing its corporate structure to become more investor-friendly, as it pushes ahead with a multibillion-dollar fundraise and seeks to retain its lead over Google and other rivals.

The artificial intelligence start-up has spoken to investors about restructuring itself, according to three people involved in those conversations. Although a final form has not been agreed, it would likely be more attractive to financial backers by seeking to simplify the company’s current complex non-profit structure, they added.

The discussions come as OpenAI is in talks to raise new capital at a valuation of more than $100bn, according to multiple people familiar with the deal, in a fundraising round that is expected to be led by venture capital firm Thrive Capital. Apple and Nvidia are in talks to participate in the round for the first time alongside existing OpenAI partner Microsoft, according to two of the people.

If successful, the round would make OpenAI one of the most valuable technology start-ups in Silicon Valley history, surpassing the $95bn valuation achieved by payments company Stripe in a 2021 private fundraising. It would also give the start-up the financial backing of the three most valuable tech companies in the world.

“We remain focused on building AI that benefits everyone and as we’ve previously shared we’re working with our board to ensure that we’re best positioned to succeed in our mission,” OpenAI said in a statement. “The non-profit is core to our mission and will continue to exist.”

Nvidia, Apple, Microsoft and Thrive declined to comment.

OpenAI currently has a unique corporate structure. Investors are issued equity by OpenAI’s for-profit subsidiary, which is governed by its non-profit board. The board’s “principal beneficiary is humanity, not OpenAI investors,” according to the company.

Earlier this month, OpenAI was sued by its co-founder and tech billionaire Elon Musk, who claims that it backtracked on its mission to benefit humanity when it signed a commercial partnership with Microsoft. This week, Musk posted on X that “either turning a non-profit into a for-profit is legal and everyone should be doing it, or it’s illegal and OpenAI is a house of cards.”

There has not yet been a final decision on whether to change OpenAI’s structure, but one option under consideration would be removing an existing cap on profits for investors in the for-profit subsidiary.

OpenAI rival Anthropic has a traditional benefit corporation structure in order “to appropriately balance the public benefit with stockholder interests”.

OpenAI’s current structure was designed to ensure it remained aligned to its mission of benefiting humanity with super-powerful AI models, while enabling it to garner the considerable financial resources required to do so. However, the company’s unusually complex set-up came under scrutiny last November during an attempted coup against chief executive and co-founder Sam Altman.

Directors of the non-profit board that ultimately controls the company ousted Altman, but he returned days later following pressure from employees and investors in OpenAI’s for-profit subsidiary.

Investors are currently required to sign up to an operating agreement that states: “It would be wise to view any investment in [OpenAI’s for-profit subsidiary] in the spirit of a donation” and that OpenAI “may never make a profit”.

That has not been an impediment to fundraising in the past. OpenAI has received $13bn from Microsoft alone since launching the for-profit subsidiary in 2019.

But shifting to a simpler for-profit structure would be welcomed by the start-up’s financial partners, according to one investor in OpenAI. “All preferred investors have a profit cap, there’s a lot of talk about making it a more traditional investment so we’re not capped on our upside,” the person said.

One of the people who successfully sued the National Association of Realtors (NAR) to change real estate commissions has co-founded a new real estate startup.

It all began in 2017 when Josh Sitzer and his wife listed their home for sale in Kansas City. The couple was frustrated by the fact they had to pay a 3% commission to a buyer’s agent.

“Due to the anti-competitive structure of the industry before the lawsuit, I, as the seller, was effectively coerced into paying 3% of my home’s selling price to a buyer’s agent in order to achieve a successful sale,” he told TechCrunch. “While hiring agents is a choice for many, I don’t believe anyone should be bullied into paying for undesired services due to unfair industry practices,” he added.

Sitzer shared his frustration with his neighbor, who happened to be a lawyer familiar with the subject matter. By 2019, he and other homeowners had filed a class-action lawsuit (Moehrl et al. v. National Association of Realtors, et al.) against the NAR. They received a verdict last year that resulted in a settlement earlier this year that will radically change how home real estate is sold.

The National Association of Realtors agreed to pay $418 million in damages to settle lawsuits. The association also agreed to abolish the “Participation Rule” that required sell-side agents to make an offer of compensation to buyer brokers. Between that and other rule changes agreed to, the real estate market is expected to be considerably transformed.

“I wouldn’t say I had expectations in the beginning, as it was a multi-year battle of ups and downs, but I had enough confidence in my position to commit to taking action,” Sitzer said.

To take advantage of the new landscape, Sitzer has teamed up with Bryce Galen and Neal Batra to found a startup called Landian, which aims to help homebuyers benefit from the rule change that resulted from the lawsuit by offering flat-fee real estate agents on demand. The name Landian blends the words “Land” and “Guardian.”

That startup is emerging from stealth Thursday with an offering in beta, TechCrunch is the first to report. The site, according to its founders, allows users to import listings from any real estate site and then book a home tour or prepare an offer with a licensed local agent, without owing a commission.

Advances in technology years ago make it easier for homebuyers to find properties they are interested in looking at or buying, so the model of buyers’ agents getting an up to 3% commission is considered antiquated by many. Some buyers have argued that it’s unfair to pay such a large commission to an agent when they did most of the legwork themselves.

Buyers have the option to pay à la carte for Landian’s offering: $49 for each home tour and $199 for an offer prep session. If they want more hand-holding, they can cough up a flat fee of $1,799, which includes up to five home tours and two offer prep sessions, with additional services available on an à la carte basis. But they only have to pay that upon closing. So if you don’t end up buying a house through Landian and you commit to that agreement, you don’t owe anything, Galen said.

“With Landian, homebuyers are protected from the new reality of paying exorbitant commissions out of pocket that eat into their closing costs,” said Galen, who previously founded the fintech company Zero, which was acquired by Avant in 2021. “People don’t need to use a buyer’s agent in the same way.”

A lot of industry incumbents such as Redfin and Zillow are not incentivized to change the pricing model, in Galen’s view.

“Because the Zillows and Redfins and this sort of old guard real estate tech companies have thrived and grown in a world where a buyer agent gets 3%, they’re not leading the change here,” Galen told TechCrunch. “It’s a new wave of startups like Landian that we expect will lead change.”

Batra agrees.

“My bet is that, following the NAR settlement, most agents will convert from relying solely on the traditional model based on speculation and higher fees to incorporating the Landian flat-fee model,” he said.

The New York-based startup has not yet raised external capital, so far just operating with friends and family money. It is in the process of raising a seed round.

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