We know that the coronavirus has brought unprecedented attention to the edtech market, but now what? What happens when schools are no longer clambering toward an overnight solution? When the surges slow? When our world reopens and there doesn’t need to be a full-suite of at-home solutions for kids and parents?
As the next wave of edtech companies are being built to address these novel use cases, investors are looking for solutions that aren’t simply pandemic-era important. To some, that means skipping the latest videoconferencing platform play and maybe cutting a check to a digital-only university. To others, it means looking for the platform that will educate a diverse range of users, especially the unemployed.
A spree of recent consolidation within the market shows that there is a need for a better plumbing system in the fragmented world of edtech.
We turned to eight investors in the space to understand which subcategories are shaping up to be the future, following up on our first survey last fall when the world was very different, and another in early April when less was understood about the pandemic. Our goal here was to find nonobvious ways innovation is living within the noisier-than-ever sector. The result? Intel on nascent trends, deal-makers and what adaption looks like amid a time of uncertainty.
Today you’ll get a deep dive on the nerdy stuff from the following investors:
Reach Capital’s Jennifer Carolan, Shauntel Garvey and Chian Gong
Ian Chiu, Owl Ventures
Jan Lynn-Matern, Emerge Education
David Eichler, TCV
Rebecca Kaden, Union Square Ventures
Jomayra Herrera, Cowboy Ventures
Investors differed on which subcategories benefitted the most, but it’s clear that the pandemic didn’t lift up the entirety of the edtech space. One investor noted that the pandemic made them even less interested in ISAs, while other venture capitalists noted how valuable the financing instrument is now, more than ever before.
We got into some of the big themes that have risen in the past few months: online learning, re-skilling, ISAs, virtual universities and where each investor draws their line around these categories.
A common theme throughout the commentary now is that the opportunity presented by coronavirus is not being met with complacency, but instead a push to grow better. Investors talked about innovation needs to account for childcare, cost, digital infrastructure, and the addressable population, pandemic or not.
I think that’s enough teasing. Now, onto the answers.
The world’s massive experiment with remote learning has done more than emphasize the cracks in the way we learn. It’s brought much needed attention and capital to potential solutions.
But it’s not just investors who are flurrying to the space; edtech incumbents are taking notice, too. Recent acquisitions show that edtech’s growth spurt is forcing incumbents to think bigger and scoop talent along the way.
India edtech giant Byju encapsulates how to strategize around momentum. In June, the company raised money at a $10.5 billion valuation. It currently leads India’s online edtech market. Days later, TechCrunch learned that the company is in talks to acquire two-year-old education learning app Doubtnut for $125 million.
It’s because Doubtnut has a hold in a place that Byju doesn’t: smaller, localized towns and villages within India. While Byju might be a household name within India’s larger cities, the buy could help it expand to smaller markets.
There’s also Docsity’s recent spree of buys. The global e-learning startup, which launched in 2010 to serve Italian students, is a social network for professionals and students. In early July, it announced plans to buy two edtech companies: Estudar Com Você, based in Brazil, and Koofers, based in the U.S.
Estudar com Você, founded in 2015 and nicknamed “Brazilian Khan Academy” sells video lessons and text-based explanations for students in Brazil. Docsity bought the upstart to broaden its offering to its largest market, Brazil, and introduce video content for colleges to its curriculum.
Nearly 40 million Americans are unemployed, and a recent study that examined more than 66,000 tech job layoffs found that sales and customer success roles are most vulnerable amid COVID-19. In response, some quarters of Silicon Valley are abuzz about a long-standing technology: reskilling, or training individuals to adopt an entirely new skillset or career for employment.
As millions look for a way to reenter the workforce, the question arises: Who really benefits from reskilling technology?
That depends on how you look at it, said Jomayra Herrera, a senior associate at Cowboy Ventures. Reskilling for a well-networked manager looks a lot different than it does for someone who doesn’t have as much leverage, and the vast majority of people fall into the latter. Not everyone has a friend at Google or Twitter to help them skip the online application and get right to the decision-makers.
Beyond the accessibility offered by live online classes, she pointed to the difference between assets and opportunities.
“You can give someone access to something, but it’s not true access unless they have the tools and structure to really engage with it,” Herrera said. In other words, how useful is content around reskilling if the company doesn’t support job placement post-training.
Herrera said companies must give individuals opportunities to test skills with real work and navigate the career path. Her mother, who did not go to college and speaks English as a second language, is looking to pursue training online. Before she can proceed, however, she has to surmount hurdles like language support, resume creation, job search and other challenges.
All of a sudden, content feels like a commodity, regardless of if it has active and social learning components. It’s part of the reason that MOOCs (massive open online courses) feel so stale.
Udacity, for example, was almost out of cash in 2018 and laid off more than half of its team in the past two years, according to The New York Times. Now, like other edtech companies, it is facing surges in usage.
Byju’s is in advanced stages of talks to acquire Doubtnut, a two-year-old education learning app, as the Indian edtech giant looks to expand its reach in smaller cities and towns in the world’s second-largest internet market.
Three sources familiar with the matter told TechCrunch that the acquisition offer from nine-year-old Byju’s values the younger startup between $125 million to $150 million. The talks haven’t finalized yet and its terms could change or the deal could fall apart, the sources said.
A separate source familiar with the matter told TechCrunch that Facebook-backed Unacademy also held preliminary talks with Doubtnut but they are no longer engaging while some investors have suggested the startup should remain independent.
Byju’s and Unacademy declined to comment. One of Doubtnut’s founders did not respond to a text message sent to them Friday afternoon. Sequoia Capital India, one of the investors in Doubutnut, also declined to comment.
The sudden interest in Doubtnut comes as the two-year-old New Delhi-based startup’s app has attracted millions of new users in recent months, most of whom live in smaller cities and towns across India.
Byju’s, which has over 55 million registered users, has a better hold on urban Indian cities. The startup sees Doubtnut as a way to expand its reach in tier 2 and tier 3 Indian markets and tackle the online learning opportunities in a more comprehensive way.
Image Credits: Doubtnut
Doubtnut, which has raised $18.5 million to date including $15 million in its Series A financing round earlier this year, allows students from sixth grade to high school solve and understand math and science problems in local languages. The Doubtnut app enables students to take a picture of the problem and uses machine learning and image recognition to deliver the answers through short videos.
In late January, Doubtnut said it had amassed over 13 million monthly active users across its website, app, YouTube and WhatsApp channels. More than 85% of its users at the time came from outside of the top 10 cities in India, the startup said in a statement then.
Byju’s currently leads the online edtech market in India. The startup announced on Friday that it had raised fresh capital from Mary Meeker’s Bond. The new deal valued Byju’s at $10.5 billion, TechCrunch reported earlier today. Byju’s and Doubtnut share Tencent as a common investor.
As schools stay closed and summer camp seems more like a germscape than an escape, students are staying at home for the foreseeable future and have shifted learning to their living rooms. Now, Norwegian educational gaming company Kahoot — the popular platform with 1.3 billion active users and over 100 million games (most created by users themselves) — has raised a new round of funding of $28 million to keep up with demand.
The Oslo-based startup, which started to list some of its shares on Oslo’s Merkur Market in October 2019, raised the $28 million in a private placement, and said it also raised a further $62 million in secondary shares. The new equity investment included participation from Northzone, an existing backer of the startup, and CEO Eilert Hanoa. While it’s not a traditional privately held startup in the traditional sense, at the market close today, the company’s valuation was $1.39 billion (or 13.389 billion Norwegian krone).
Existing investors in the company include Disney and Microsoft, and the company has raised $110 million to date.
Kahoot launched in 2013 and got its start and picked up most of its traction in the world of education through its use in schools, where teachers have leaned on it as a way to provide more engaging content to students to complement more traditional (and often drier) curriculum-based lessons. Alongside that, the company has developed a lucrative line of online training for enterprise users as well.
The global health pandemic has changed all of that for Kahoot, as it has for many other companies that built models based on classroom use. In the last few months, the company has boosted its content for home learning, finding an audience of users who are parents and employers looking for ways to keep students and employees more engaged.
The company says that in the last 12 months it had active users in 200 countries, with more than 50% of K-12 students using Kahoot in a school year in that footprint. On top of that, it is also used in some 87% of “top 500” universities around the world, and that 97% of Fortune 500 companies are also using it, although it doesn’t discuss what kind of penetration it has in that segment.
It seems that the coronavirus outbreak has not impacted business as much as it has in some sectors. According to the midyear report it released earlier this week, Q2 revenue is expected to be $9 million, 290% growth compared to last year and 40% growth compared to the previous quarter, and for the full year 2020, it expects revenue between $32 million and $38 million, with a full IPO expected for 2021.
As it has been doing even prior to the coronavirus outbreak, Kahoot has also continued to invest in inorganic growth to fuel its expansion. In May, it acquired math app maker DragonBox for $18 million in cash and shares. The company also runs an accelerator, Kahoot Ignite, to spur more development on its platform.
However, Hanoa said that Kahoot is shifting its focus to now also work with more mature edtech businesses.
“When we started out, we were primarily receiving requests on early stage products,” he said. “Now we have the opportunity to consider mature services for either integration or corporation. It’s a different focus.”
Update: A previous version of this story said that DragonBox was acquired in March. It was acquired in May. The story has been updated to reflect this change.
Unlike most sectors, edtech has been booming over the last few months. Flashcards startup Quizlet is now a unicorn, digital textbook company Top Hat is finding unprecedented surges in usage and student success business Edsights raised nearly $2 million from high-profile investors, all from inbound interest. Investors are so confident that homeschooling might become a trend that they just invested $3.7 million in Primer, which creates a “full-stack infrastructure” to help parents get started.
But as tired parents juggle work, family and sanity all day, nearly every day, they say edtech is not a remedy for all education gaps right now.
“Our mental health is like whack-a-mole,” said Lisa Walker, the vice president of brand and corporate marketing at Fuze. Walker, who lives in Boston but has relocated to Vermont for the pandemic, has two kids, ages 10 and 13. “One person is having a good day. One person is having a bad day, and we’re just going throughout the family to see who needs help.”
Socioeconomically disadvantaged families have it even worse because resources are strapped and parents often have to work multiple jobs to afford food to put on the table.
One major issue for parents is balancing a decrease in live learning with an uptick in “do it at your own pace” learning.
Walker says she is frustrated by the limited amount of live interaction that her 10-year-old has with teachers and classmates each day. Once the one hour of live learning is done, the rest of the school day looks like him sitting in front of a computer. Think pre-recorded videos, followed up by an online quiz, capped with doing homework on a Google doc.
Asynchronous learning is complicated because, while it is not interactive, it is more inclusive of all socioeconomic backgrounds, Walker said. If all learning material is pre-recorded, households that have more kids than computers are less stressed to make the 8 a.m. science class, and can fit in lessons by taking turns.
“Even though I know there’s a lot of video fatigue out there, I would love there to be more live learning,” Walker said. “Tech is both part of the problem and part of the solution.”
TraLiza King, a single mother living in Atlanta who works full time as a senior tax manager for PWC, points out the downside of live video instruction when it comes to working with younger children.
One challenge is overseeing her four-year-old’s Zoom calls. King needs to be available to help her daughter, Zoe, use the platform, which isn’t intuitive for kids at that age. She helps Zoe log on and off and mute when appropriate so instruction can go on interrupted, ironically enough.
Her 18-year-old college freshman could supervise the four-year-old’s learning, but King doesn’t want her older daughter to feel responsible for teaching. It leaves King to play the role of Zoom tech support, and teacher, in addition to mom and full-time employee.
“This has been a double-edged sword; there’s beauty in it that I get to see what my girls are learning and be a part of their everyday,” she said. “But I am not a preschool teacher.”
Some parents are finding success in pretending it is business as normal. The moment that Roger Roman, the founder of Los Angeles-based Rythm Labs, and his wife saw that there was a shutdown, they scrambled to create a schedule for the children. Breakfast at 6 a.m., physical education right after, and then workbook time and homework time. If their five-year-old checks all the boxes, he can “earn” 30 minutes of screen time.
The Roman family’s schedule for their child.
Technology definitely helps. Roman says he relies on a few apps like Khan Academy Kids and Leapfrog to give him some time to take work calls or meetings. But he says those have been more like supplements instead of replacements. In fact, he says one big solution he found is a bit more low-tech.
“Printers have been a godsend,” he said
The kids being at home has also given the Roman family an opportunity to address the racial violence and police brutality in our country. The existing school curriculums around history have been scrutinized for lacking a comprehensive and accurate account of slavery and Black leaders. Now, with parents at home, those disparities are even more clear. Depending on the household, the gaps around education on slavery can either inspire a difficult conversation on inequality in the country, or leave the talk tabled for schools to reopen.
Roman says he doesn’t remember a time where he wasn’t aware of racism and injustice, and assumes the same will be true for his sons.
“The murders of Ahmaud, Breonna, and George have forced my wife and me to be brutally honest with my five-year-old about this country’s long, dark history of white supremacy and racial oppression,” he said. “We didn’t expect to have these discussions so soon with him, but he’s had a lot of questions about the images he’s been seeing, and we’ve confronted them head-on.”
Roman used books to help illustrate racism to his sons. Edtech platforms have largely been silent on how they’re addressing anti-racism in their platforms, but Quizlet says it is “pulling together programming that can make a real impact.”
What’s next for remote learning?
In light of the struggles parents and educators alike are seeing with the current set of online learning tools and their inability to inspire young learners, new edtech startups are thinking about how the future of remote learning might look.
Zak Ringelstein, the co-founder of Zigazoo, is launching a platform he describes as a “TikTok for kids.” The app is for children from preschool to middle school, and invites users to post short-form videos in response to project-based prompts. Exercises could look like science experiments — like building a baking soda volcano or recreating the solar system from household items — and the app is controlled by parents.
The first users are Ringlestein’s kids. He says they became disengaged with learning when it was just blind staring at screens, leading him to conclude that interaction is key. Down the road, Zigazoo plans to forge partnerships with entertainment companies to have characters act as “brand ambassadors” and feature in the short-form video content. Think “Sesame Street” characters starting a TikTok trend to help kids learn what photosynthesis is all about.
A preview of Zigazoo, a “TikTok for kids” and its video-based prompts“As an educator, I’ve been surprised at how little content exists for parents that is not just entertaining but is actually educational,” he said.
Lingumi is a platform that teaches toddlers critical skills, like learning English. The company began because preschool classes are packed with so many students that teachers can’t give one on one feedback during the “sponge-like years.” Lingumi uses another startup, SoapBox, and its voice tech to listen and understand children, assess how they are pronouncing words and judge fluency.
“Edtech products were designed to work in the classroom and a teacher was supposed to be in the mix somewhere,” said Dr. Patricia Scanlon, the CEO of SoapBox. “Now, the teacher can’t be with the kids individually and this is a technology that gives updates on children’s progress.”
Another app, Make Music Count, was started by Marcus Blackwell to help students use a digital keyboard to solve math equations. It serves 50,000 students in more than 200 schools, and recently landed a partnership with Cartoon Network and Motown records to use content as lessons for followers. If you log onto the app, you are presented with a math problem that, once solved, tells you which key to play. Once you solve all the math problems in the set, the keys you played line up to play popular songs from artists like Ariana Grande and Rihanna.
The app is using a well-known strategy called gamification to engage its younger users. Gamification of learning has long been effective in engaging and contextualizing studies for students, especially younger ones. Add a sense of accomplishment, like a song or a final product, and kids get the positive feedback they’re looking for. The strategy is found in the underpinnings of some of the most successful education companies we see today, from Quizlet to Duolingo.
But in Make Music Count’s case, it’s forgoing gamification’s usual trappings, like points, badges and other in-app rewards to instead deliver something far more fun than virtual items: music that kids enjoy and often seek out on their own.
Gamification, much like technology more broadly, is not all-encompassing of the deeply personal and hands-on aspects of school. Yet that is what parents need right now. We’re left with a reminder that technology can only help so much in a remote-only world, and that education has always been more than just comprehension and test-taking.
The missing piece to edtech: School isn’t just learning, it’s childcare
At the end of the day, if the future of work is remote, parents will need more support with childcare assistants. Some startups trying to help that include Cleo, a parenting benefits startup that recently partnered with on-demand childcare service UrbanSitter.
“As working moms desperate for a solution to the crisis facing parents today, we were focused on developing a solution that didn’t just work for our members and enterprise clients, but also one that we’d use ourselves. After experimenting and trying everything from virtual care to scheduling shifts to looking for new caregivers ourselves, we realized the only solution that would work for families would require a new model of childcare designed for the unique issues COVID-19 has created,” Cleo CEO Sarahjane Sacchetti told TechCrunch in May.
Sara Mauskopf, the co-founder of childcare marketplace Winnie, said that tech companies trying to help remote learning need to remember that “it’s not just the education aspect that has to be solved for.”
“School is a form of childcare,” she said.
“The thing that irks me is that I see these tweets all the time that ‘more people are going to homeschool than ever before,” Mauskopf said. “But no one is going to feed my toddler mac and cheese or change their diaper.”
Eric Tarczynski is the Managing Partner at Contrary, a network-driven venture firm backed by founders from Facebook, Tesla, and many others.
Across the country, university campuses are in limbo.
The California State University system has committed to online classes in Fall 2020. Northeastern University is reopening as normal. UT Austin is taking a hybrid approach: in-person classes until Thanksgiving break, then online classes during flu season.
This presents a special set of circumstances for university entrepreneurs. The traditional resources and networks are nonoperational. But time and focus, historically the most scarce resources for ambitious students, is now at an all-time high.
It’s often noted that both Facebook and Microsoft were started during Harvard’s Reading Period, a week where classes are cancelled to let students study. This spring has been like one long Reading Period, sometimes with even less responsibility.
Stanford undergraduate Markie Wagner is taking advantage of the mandatory Pass/Fail policy that the school adopted. Since grades are no longer a consideration, Markie and her friends have free rein to put classes on the back burner to focus on talking to entrepreneurs and experimenting with business ideas.
She told us, “I’m going full hackathon mode this quarter. I’ve been reaching out to lots of founders and VCs to learn from them.” Planning on spending her upcoming senior year building a company, she’s getting a head start on exploration and network building.
If the pandemic forces school closings for the long-run, however, students will have to deal with more than a semester with an easier course load.
There’s near-universal resentment toward the idea of paying full tuition for online classes. Many of the students in Contrary’s network are planning gap years. Or, like Austin Moninger, even skipping senior year altogether. A senior at Rice studying computer science, he originally intended to graduate in spring of 2021. But given the virtual nature moving forward, he decided to accelerate graduation and is currently pursuing full-time software engineering roles. He notes, “We’ve all learned that we’re really paying for the experience and the network at the end of the day, so without it, I might as well take my time and money elsewhere.”
This puts universities in a precarious position: They must choose between letting students take breaks and defer admissions, which risks class size or financial issues (as an example, Dartmouth’s Tuck School of Business decided against this, refusing to allow students to defer), or pushing forward at full price and risking brand damage.
That said, some students are affected by shutdowns or online classes more than the schools themselves are. Research-focused entrepreneurs working in biotech, hardware or other sectors typically require expensive lab equipment to make progress. Pure software plays like Facebook and Snap usually come to mind first when talking about university entrepreneurship, but such lean operations are certainly not the only ones being built.
It’s also unclear how prolonged closures or online classes will impact education itself and how that will impact founders in the long run. Most founders have completed the majority of their degrees by the time they commit to their companies and attempt to raise money. We have not seen any meaningful skill gap in 2020, nor do we expect to throughout the rest of the year.
Unless building a deep-tech startup, company-building can continue as long as an entrepreneur has enough of a technical or financial foundation to self-educate and learn by doing. Malwarebytes CEO Marcin Kleczynski is an excellent example of this — he famously started his cybersecurity company as a freshman at the University of Illinois at Urbana–Champaign and did the bare minimum required to get C grades in school.
Although seed funding for university entrepreneurs has not slowed down since school closings, company-building has certainly not gotten any easier.
The main challenge for 22-year-old talent is not having energy or being scrappy — it’s usually growing the network needed to recruit the right co-founder and hire an early team. In an on-campus environment, there’s enough serendipity to make this natural. But if school closings persist and virtual offerings don’t fill the vacuum, we’ll likely see a lag in new company formation.
It’s rare that founders embark on the startup journey without having known each other for at least a year. Right now, not enough time has passed to make this a problem. But at campuses where students can’t get to know peers at a deep level, it’s impossible to build bonds over a long time period.
To combat this, at Contrary, for example, we hosted a virtual community of founders this past spring with a simple premise: Put 100 people in a room (or Slack channel, more literally), make sure they spend time together and give them the tools to build.
Over the course of six weeks, 150+ collaborations occurred as people experimented on different ideas and projects. Seventy-five percent of the founders said they’d been more productive since the remote transition occurred, and at the end of the program, nearly 70% of the group planned to continue working on their companies or begin a fresh project.
Perhaps most notable is the diversity of connections made — most interactions between participants were between students enrolled in different schools. Since even the best institutions in the world each matriculate only a single digit percentage of talent nationwide, virtualizing the program made the talent pool far larger.
Successful entrepreneurs like Steve Huffman from Reddit and Paul English from Kayak (and now Lola) gave off-the-record talks, but it turned out that most of the value came from access to a highly curated group of peers that each member wouldn’t otherwise meet. The program forced the serendipity that school closures lost, then combined that with the other necessary ingredient: Tangible opportunities to build rather than talk.
You can treat a university like a bundle of tools: The education, network, credential and social learnings all compose into one holistic experience.
Over the past decade, much of that value-stack has been eaten by other organizations.
Until very recently, the university’s main “network effect” was the fact that you had to be there to meet other great individuals. Since COVID-19 has shifted most interactions to the cloud, however, that’s no longer the default path.
Hopefully flattening the curve will soon become extinguishing the curve. But until then, university-based founders will have to focus on the alternative infrastructure that powers funding, networking, credentialing and learning.
Had Contrary, Slack, Y Combinator or free AWS credits not existed prior, the closure of schools may have dealt a death knell to founders. But given the abundance of options now available to plug into the Valley and build, surprisingly little has changed.
Like many parents, Zigazoo founder Zak Ringelstein worries about his children’s screen time. His worries only grew when COVID-19 led to school shutdowns and kids came home to a world of remote learning. Now, as lockdowns extend, Ringelstein is learning to embrace screen time as a way to sneak education and entertainment into his kids’ digital diet.
Ringelstein, the former founder of UClass (acquired in 2015), launched Zigazoo, which he describes as a “TikTok for kids.”
Zigazoo is a free app where kids can answer short video-based exercises that they can answer through video and share responses with friends. Exercises range from how to create a baking soda volcano to making fractions out of food, and targets kids from preschool to middle school.
To ensure the app’s privacy, Ringelstein says that parents should be the primary users of the app. Users have to accept a friend request in order for their content to be seen, a move Ringelstein sees as key to avoiding bad actors or potential bullying.
Additionally, Zigazoo uses an API through SightEngine to moderate content.
Ringelstein’s first users were his own kids, a test he says was very rewarding.
Ringelstein’s son participating in a Zigazoo prompt.
The testing process made him realize that kids like to create longer videos, and watch smaller videos, so Zigazoo is figuring out an attention span for viewing. Currently, average time on site per user has gone up to 19 minutes and 43 seconds per day.
Ringelstein pointed to “Sesame Street” as his inspiration. Mixing education and entertainment has proven successful for a number of businesses. Kids were drooling in front of the screen watching the characters of “Sesame Street,” spending mindless hours staring at the television set, he recalls.
In one month, Zigazoo has had 100,000 videos uploaded to and downloaded from its site.
While Zigazoo claims to be a “TikTok” for kids, it is competing with the platform itself. Some teachers have turned to TikTok to create lessons on solar cell systems and experiments.
Others are putting together guides of “kid friendly” TikTok creators. And TikTok itself recently let parents set restrictions on content, DMs and screen time for their kids.
Video-based learning is a better way for students to engage actively in an educational activity, versus passively reading a paragraph from a Google doc, according to Ringelstein.
Combining education with entertainment comes with a set of risks around child safety. Last March, The New York Times wrote a story about how “kidfluencers” has grown as a concept, where parents put their kids online, touting brands, and make money off of it. The resulting ethical concerns are why Ringelstein is confident that Zigazoo is needed.
“Zigazoo is a not a kid play date smack dab in the middle of an adult party like YouTube and TikTok, it is a universe tailor-made for kid safety, learning and enjoyment,” he said.
Ringelstein sees Zigazoo’s “friend” versus “follow” feature as key to the safety of kids: Unlike TikTok, where there is a public feed and users can follow everyone, Zigazoo requires users to opt-in to being followed, similar to Facebook.
The partnerships will allow Zigazoo to post verified content using favorite and well-known characters to teach kids about the subjects they care about. And in a world where digital detoxes are no longer a reality, a smarter screen-time activity seems much needed.
Recently, Zigazoo partnered with The American Federation of Teachers for a capstone project directed at millions of K-12 students. Students are invited to submit a video using Zigazoo to encapsulate their learning experience over the past school year, which AFT says is a “far better way to sum up learning than a high-stakes test.”
This summer Ringelstein is launching “Zigazoo Channels” with a select group of major children’s entertainment companies, podcasts, museums, libraries, zoos, social media influencers and more.
Edtech is booming, but a short while ago, many companies in the category were struggling to break through as mainstream offerings. Now, it seems like everyone is clamoring to get into the next seed-stage startup that has the phrase “remote learning” on its About page.
And so begins the normal cycle that occurs when a sector gets overheated — boom, bust and a reckoning. While we’re still in the early days of edtech’s revitalization, it isn’t a gold mine all around the world. Today, in the spirit of balance and history, I’ll present three bearish takes I’ve heard on edtech’s future.
Quizlet’s CEO Matthew Glotzbach says that when students go back to school, the technology that “sticks” during this time of massive experimentation might not be bountiful.
“I think the dividing line there will be there are companies that have been around, that are a little more entrenched, and have good financial runway and can probably survive this cycle,” he said. “They have credibility and will probably get picked [by schools].” The newer companies, he said, might get stuck with adoption because they are at a high degree of risk, and might be giving out free licenses beyond their financial runway right now.
While the idea of baring your soul to a chatbot might seem uncomfortable, sisters Claudia and Carolina Recchi think that might be exactly what college students across the United States need right now.
The duo co-founded EdSights in 2017 to support high and medium-risk students to stay in school, and increase university retention rates.
EdSights uses a chatbot, branded under a school’s mascot, to send personalized questions and messages to students to understand their biggest stresses. It then connects them to university resources spanning areas like financial aid, food security and mental health.
As the pandemic has forced millions of students to move off campus and learn from home, the co-founders have found a spurt of growth from colleges looking for new ways to hold onto their students.
And the pandemic has added a new layer of honesty to the answers.
“There is just so much going on with the world, people losing jobs and barely being able to make ends meet. School hardly seems pressing at the moment,” one student wrote. “And yet, grades are still there, determining our future when we aren’t even sure what the future looks like.”
Another wrote, “My work is closed. I have no income.” One said, “Because I am not going out I can’t distract myself from all the things going on in my life.”
Beyond its chatbot, EdSights has a dashboard for administrators to see what percentage of their students are struggling with specific issues at the moment. The company deals with information on high-risk students and their biggest worries, so privacy is key to their platform. EdSights says it complies with both FERPA and GDPR regulation, and does not rent or sell data to third parties. Students also have the right to request an amendment of their records and receive a full log of it.
“Obviously, universities are also spooked that students won’t show up in the fall,” she said. “So they want to make sure that there’s a connectivity and they feel connected to the university, even if they can’t go to campus.”
The company took one year to scale to 16 customers, including Baker University, Missouri Western State, Bethel University, Culver Stockton College and Westminster College. On average its ARR has been growing by 66% month over month, and it has doubled its revenue since February.
EdSights charges colleges $15 to $25 per student. Most customers bring on their entire student body.
“Before this, we did see a lot of universities asking, ‘can I roll this out to freshmen or can I only roll it out to my first-generation students or maybe those that need additional support?’ ” said Carolina Recchi. “Now, colleges are not only asking us to help with all four years, but we’ve had some institutions ask us to roll it out to graduate students, which was new, because we had never done that before.”
This newfound momentum led the co-founders to raise $1.6 million in venture capital funding from a slew of high-profile investors. Investors from this round include Lakehouse VC, Kairos VC and The Fund.
The new raise also includes investments from Warby Parker, Harry’s, Allbirds, Bonobos and Rent the Runway founders.
The EdSights co-founders say COVID-19 played a part in their company receiving inbound interest from generalist investors, who have been historically skeptical about the space, versus solely getting term-sheets from specialist education firms. In fact, the duo had to turn down a number of investors, a stark difference between the chilling effect other founders claim has covered the entire fundraising scene.
EdSights new funding is another data point of how the pandemic is forcing the general public to be more nuanced in how it thinks about the intersection of education and technology.
In the time of a pandemic, a chatbot could be the only way to remotely support millions of students. Now, it’s just up to EdSights to prove that their technology is necessary in a world where schools start to reopen, whenever that is.