Silicon Valley Turns Its Eye to Education

Brett Kopf, co-founder of Remind, with an employee, Christine Garland, last week. The company’s San Francisco offices have been kept busy by its popular app. Credit: Jim Wilson/The New York Times

Brett Kopf, co-founder of Remind, with an employee, Christine Garland, last week. The company’s San Francisco offices have been kept busy by its popular app. Credit: Jim Wilson/The New York Times

Here is a brief excerpt from an article by Natasha Singer for The New York Times. To read the complete article, check out others, and obtain subscription information, please click here.

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The education technology business is chock-full of fledgling companies whose innovative ideas have not yet proved effective — or profitable. But that is not slowing investors, who are pouring money into ventures as diverse as free classroom-management apps for teachers and foreign language lessons for adult learners.

Venture and equity financing for ed tech companies soared to nearly $1.87 billion last year, up 55 percent from the year before, according to a new report from CB Insights, a venture capital database. The figures are the highest since CB Insights began covering the industry in 2009.

Notable financing deals include Pluralsight, a company that provides online training to technology professionals, which raised $135 million; Remind, a free messaging service for teachers to communicate with students and parents, which raised $40 million from venture capital firms including Kleiner Perkins Caufield & Byers; and Edmodo, an online social network customized for classroom use that is free to individual teachers, which raised $30 million.

“Education is one of the last industries to be touched by Internet technology, and we’re seeing a lot of catch-up going on,” said Betsy Corcoran, the chief executive of EdSurge, an industry news service and research company. “We’re starting to see more classical investors — the Kleiner Perkinses, the Andreessen Horowitzes, the Sequoias — pay more attention to the marketplace than before.”

While rising sharply, the values of ed tech financing deals are chump change compared with the money flowing into consumer software. Uber, the ride-hailing app, for instance, raised $2.7 billion last year.

The smaller sums going into ed tech illustrate the challenges facing start-ups as they try to persuade public school systems to adopt their novel products. Companies often must navigate local school districts with limited budgets and slow procurement processes. To bypass the bureaucracy, many start-ups are marketing free learning apps and websites directly to teachers in the hopes that their schools might eventually buy enhanced services.

Still, it is too early to tell whether that direct-to-consumer “freemium” strategy, as it is often called, will pan out for education software.

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Here is a direct link to the complete article.

Natasha Singer has been a reporter at The New York Times since June 2005. She is currently a reporter for the Sunday Business section, where she covers the business of consumer data and writes a monthly column called Slipstream. Ms. Singer previously covered the pharmaceutical industry and medical ethics. She also developed the Skin Deep column for the Thursday Styles section, where she covered the beauty industrial complex.

Ms. Singer graduated from Brown University with a degree in comparative literature and creative writing. Before joining The Times, she was a correspondent for Outside Magazine, covering the environment and biodiversity, and was a health and beauty editor at W Magazine. She also worked in Russia as the Moscow bureau chief of The Forward, the editor-at-large of Russian Vogue, and a correspondent for Women’s Wear Daily.

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