- Top Hat, an ed tech company that specializes in creating open educational resources (OER), announced Tuesday that it raised $55 million in Series D funding.
- The fundraising round was led by existing investors Georgian Partners and Inovia Capital and includes debt and equity financing.
- The company said in a statement that the funding will help it expand partnerships with academic publishers and support its efforts to help instructors create and use digitized textbooks and OER.
The raise brings Top Hat's funding to just over $100 million since its founding in 2009, according to Crunchbase. The company aims to compete with major textbook publishers, particularly as institutions look to confront nontuition costs. But its CEO Mike Silagadze has acknowledged that implementing OER can mean more work for professors.
Top Hat has taken steps to address that issue. Last year, it began offering its assessment services on a single platform to help track students' progress.
It has also begun packaging digital textbooks, lecture slides and assessments for introductory classes. So far, it offers bundles for six courses, including psychology, economics and public speaking. And it has teamed up with two publishers to offer their content digitally.
In 2018, it also dropped the fee to access some of its materials while it focuses on monetizing premium materials and some engagement tools. OER providers have caught flak for requiring students to pay to access OER materials.
"The revenue is going to come from more niche subjects like the second- and third-year courses where there simply isn't enough of a community to build and maintain these content bundles," Silagadze told Education Dive last year.
Top Hat says more than 2.7 million students have enrolled in courses that use its products across 750 North American postsecondary institutions.
Growing awareness of OER and acceptance of digital materials could bode well for OER, according to a 2018 survey from the Babson Survey Research Group. OER could "provide an answer to faculty cost concerns" while letting them continue to adapt existing materials, the authors wrote.
The U.S. Department of Education funded a pilot project in 2018 to explore OER uses in higher education, though it was criticized for limiting the award to a single program. The 2020 federal budget includes $7 million for the program, called the Open Textbooks Pilot.
Meanwhile, traditional publishers are coming up against resistance to "inclusive access" deals that they're striking with colleges. The publishers argue that the arrangement helps to lower students' costs by having them pay an upfront fee to access a bundle of digital materials. EdSurge reported that a group of off-campus bookstores recently brought a lawsuit against the publishers, contending the deals limit students' ability to use borrowed, rented or used textbooks to save money.