Digital transformation in schools is accelerating. 2,000 districts are now 1:1 computing.
There is a massive open market share for the taking.
Technology has created enormous industry fragmentation
After decades of an industry dominated by a few large publishers, we are seeing an explosion of new digital products for schools.
The titans of educational publishing are falling, and early stage companies are quickly eroding their market share.
There is huge opportunity for growth in EdTech similar to digital advertising 15 years ago.
Teachers are fed up with school purchasing bureaucracy and are driving transformation from the bottom up.
Education reform is driving adoption of technology nationwide – e.g. Connect Ed.
Adoption of the Common Core Standards will require 100% online testing as well as require new ways of differentiating instruction.• Digital transformation in schools is accelerating nationwide.
Seed Stage Opportunity in EdTech
Series A stage and later is very crowded.
$1.1B invested in EdTech in 2012.
70% of funds went to 10 companies (of 246 total investments).
Valuations are inflated at these later stages –> lower investment returns.
Seed stage investing is dominated by angel investors who don’t understand the education industry.
Education is a very complicated and nuanced Market.
Everyone thinks they understand education because they went to school themselves or have a child in school.
They don’t understand basic teacher and school problems.
They can’t help EdTech entrepreneurs. In fact, sage advice for a consumer-focused start-up can prove disastrous for an EdTech start-up (e.g. freemium model).
The EdTech Fund can better choose investments and also help start-ups become successful.
Proving out and testing the business model with feedback from schools, teachers, and our network of experts => reduced investment risk, higher returns.
Hands-on investment approach. e.g. leveraging personal networks within schools to walk entrepreneurs into a school to get a sale => reduced investment risk, higher returns.
What are our investment criteria? We invest in products that:
Create greater student engagement,
Give teachers greater insight into what students know or are learning, on a real-time basis, so that teachers can better plan their lessons, break their classes into appropriate groups, and deliver differentiated instruction,
Make teachers and administrators more efficient so they can focus on teaching (not so that we can reduce the number of teachers).
