7 ed tech startups making progress with investors
The educational technology sector remains attractive to venture capital and private equity investors, and August seemed like a good month for ed tech startups to announce their latest fundraising victories as they geared up for a fall semester of classroom trials for their products and services.
Here are seven ed tech companies that managed to drum up some excitement and publicity last month as they reported on their progress in signing up investors.
Pluralsight, an online technology training service, raised $135 million in its latest round of financing, raising its valuation to about $1 billion. The Farmington, UT, company had raised $27.5 million in a previous round, in January 2013.
At the time of its launch, in 2004, Pluralsight focused on programmers looking to add skills as its key customers. But it now aims at the businesses that employ the programmers, and it may add colleges and universities. Investors in the latest round included Insight Venture Partners, ICONIQ Capital, and Sorenson Capital.
The money will help Pluralsight acquire companies, develop new offerings and improve its existing content. Over the last two years, the company has spent $70 million acquiring PeepCode, Tekpub, TrainSignal, and Digital-Tutors, and it now offers 3,000 online courses in more than 150 countries.
2. Verite Educational Systems Inc.
Verite Educational Systems Inc. announced in August that it was spinning out of Verite Group Inc. with $1.3 million in seed money from its management team and high-tech entrepreneur Taher Behbehani. The firm will design and market tech tools to educators and families, and the company has started fundraising for its second round of financing.
Its first product, NetRef, is an Internet management solution that allows educators and parents to set limits on web use by children, to promote safe browsing. The app also helps kids to focus and manage their online time so it is spent productively. NetRef starts in schools this fall and with families in the spring of 2015.
Desire2Learn, maker of the Brightspace learning platform, announced in August that it had completed an $85 million round of venture capital fundraising. According to the company, the funds will be used to expand its Internet-based learning overseas.
The $85 million, one of the five largest fundraising totals in Canada in the last 10 years, was raised from Columbus Nova Technology Partners, Graham Holdings, Four Rivers Group, Aurion Capital, New Enterprise Associates, and OMERS Ventures, with the latter two also investing in an $80 million round in 2012. Desire2Learn is based near Toronto and has new offices in Brazil, Singapore, Britain, and Australia.
Desire2Learn counts Blackboard as one of its main competitors, and it has nearly 900 software applications at universities, schools, and companies integrated into Brightspace, serving 15 million students. The company has 800 employees.
The company offers a free service that can match high school students to potential colleges — getting them interested in college from a young age — along with tools for parents and college counselors to guide them through the college selection and preparation process. But the plan is to offer a paid tier with added services, as well as expanding the platform to include higher education institutions, effectively creating an applications platform.
5. Quick Key
Raising $150,000 from a convertible debt offering to the Educator’s Network, an advertising company, in August, Quick Key brought its total equity and convertible debt raised to $600,000. The Cambridge, MA, company makes a free app that allows teachers to grade as many as 10 quizzes in 30 seconds by turning a smartphone into an optical scanner. The quiz results are analyzed and uploaded to an electronic grade book, and a new feature will allow them to be sent directly to the students' smartphones.
The appeal: Instant analysis means teachers can quickly adjust their lesson plans, cater to the individual needs of students, and spend less time grading quizzes. To date, more than 350,000 quizzes have been graded with Quick Key.
A startup that aims to help college students before they drop out, GetSet announced in August that it was looking to close out a $2.5 million round of seed financing. Its first trial: more than 10,000 freshmen at Arizona State University this fall.
The seed investors include Social+Capital, Chicago Ventures, and entrepreneurs Paul Freedman and Howard Tullman.
GetSet instantly matches students — using information they provide about their college, goals, backgrounds, and problems — to other students who are similar and students who have overcome similar problems. The service also has a social network layer where students can share content and connect through their posted profiles.
The goal is to prevent the students from feeling alienated, because 54% of those who drop out of college are driven by social factors, such as feelings about not fitting in or not making friends. Only 30% drop out due to financial reasons and 16% because of academic problems. Colleges and universities have an obvious financial incentive to lower drop-out rates, and it could be argued that investing in drop-out prevention is money well-spent, considering what institutions invested in landing the student in the first place.
FreshGrade — a Canadian maker of apps that connect K-12 teachers, students, parents, and administrators — raised $4.3 million in seed funding in August from a group of investors that included NewSchools Venture Fund, Emerson Collective, Accel Partners and Social + Capital Partnership.
FreshGrade, based in Kelowna, British Columbia, allows teachers to take pictures or videos of student achievements and post them to private portfolios that can be viewed by their parents or administrators. The app also allows teachers to instantly record scoring for homework, projects, and tests.
FreshGrade’s free version has helped it gain traction with school systems in Canada, and it also sells a version that allows schools to view the progress of students and teachers collectively. The company was founded in 2011.
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