Weekly Trend: Edtech Startups Getting a Wealth of New Funding Sources
What do you do when you have a successful non-profit venture that has helped to transform education in the three years since it began? If you are NewSchools Venture Fund CEO Stacey Childress, you take stock of all your success and realize that, in the area of education, there is still much to be done.
So much, in fact, that you decide to branch out. NewSchools Venture Fund announced earlier this month that it is creating a for-profit arm so that other entrepreneurs can help out and develop specific projects which would otherwise not get much funding. In a recent interview with EdSurge, on the occasion of the NewSchools announcement, Stacey Childress lays her vision bare: “We know that early-stage seed capital is critical for a vibrant, healthy marketplace to help entrepreneurs with good ideas and good instincts for how to meet the need of teachers and kids and parents. We need lots of innovators working on the same problem at the same time, in different ways.”
Childress’s vision also became clear when she stopped by 1776 yesterday for a roundtable with edtech startups. During the conversation, she pointed at that NewSchools is unique as an investor.
“Education is complex and inefficient on the demand side, and investors are turned off by the politics of it,” she said. “What makes us unique is that we focus solely on education.”
She noted that the products she sees gaining traction most rapidly are those that have a “freemium” in the early stages before converting to subscription models long term. Why is that working? Thanks to long and hard sales cycles, it’s difficult to sell an edtech product straight into a district; what works is to get a product directly into teachers’ hands—then get them to share it.
This model furthers her goal to have multiple innovators—and non-teachers—approaching the same problems. Education is crucially served and helped by innovation, but oftentimes, the people who are trying to push for new ventures are the very people who are burdened by the job of educating and taking care of kids. The other reason is—for lack of a better term—elementary: Innovation in education is critical in order to serve children who are underserved, and to level the playing field, from edtech innovation in Asia that allows students to uphold the meritocracy, for instance. A for-profit venture allows for fine-tuning the product and delivering a higher-quality end result that can help more students and reach a wider audience.
In that same vein, there are other exciting incubators tailored specifically for helping educational startups: a couple of weeks ago, AT&T announced the launch of its educational startup accelerator, AT&T Aspire Accelerator. Aspire is currently accepting applications through February 20, and is part of a $350 million dollar commitment to education on the part of the company.
Another exciting opportunity for educational startups is the Open Education Challenge, which took applications last year and is starting the cycle again via online submission. The Open Education Challenge is a partnership between the European Union and an elite set of investors and schools all over Europe, seeking to fund new ventures in education worldwide (although with funding based in Europe).
As countries endeavor to improve education and educational opportunities for children and young adults, it is inspiring to see the different kinds of support available to those who want to revolutionize education. It is also evident to see that without a bottom line in terms of dollars, there may not be a bottom line for education.