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Investment Companies Continue to Fund Education Technology, Study Finds

Investment Companies Continue to Fund Education Technology, Study Finds

Despite many hurdles, education technology businesses are continuing to pour money into creating the best products for teachers and their students.

According to a report from CB Insights, "venture and equity financing for ed tech companies soared to nearly $1.87 billion last year, up 55 percent from the year before," said an article on NYTimes.com. The figures, the article said, "are the highest since CB Insights began covering the industry in 2009."

“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 in the article. “We’re starting to see more classical investors — the Kleiner Perkinses, the Andreessen Horowitzes, the Sequoias — pay more attention to the marketplace than before.”

According to the article, "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."

While rising sharply, the article said, "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," the article said. "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."

One example the article highlighted is Remind, "a popular messaging app that teachers use to send homework reminders to students and share classroom news with parents."

According to the article, "word of mouth has propelled Remind from an unknown brand to a nationwide phenomenon. Started in 2009 by two brothers in Chicago, the service now has 23 million users, up from 18 million five months ago, the company said, and the service has been used to send more than a billion messages."

“Today, you can order a pizza, or a ride with Uber or Lyft, in an instant,” said Brett Kopf, 27, a co-founder and chief executive of Remind. “But if a student is struggling at school, oftentimes the parents don’t know. We want to make that communication more real-time.”

Read the full story and comment below. 

Article by Kassondra Granata, Education World Contributor 

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