Tag Archives: funding

Where to Raise Money EDUKWEST Academy

When and Where to Raise Money

Over the last few months,  I have been sharing my thoughts on the key differentiators in this sector and the spectrum of opportunities that the Ed Tech sector brings compared to other sectors in the context of really understanding the value creation dynamics. All these views, be they good, bad, boring or controversial are, of course, my personal thoughts.

In my previous posts (feel free to look them up), I talked about

1. Content vs. Technology;
2. Education vs. Technology;
3. User vs. Buyer;
4. Scale vs. Specialist;
5. Think Big.. Think Global and,
6. Key Global markets

And now let’s discuss funding in terms of when and where to raise money….

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EdTech Funding Report India 1H 2015 EDUKWEST

Report: Indian EdTech Startups raised over $50 million in 1H 2015

Over the past couple of years the Indian subcontinent managed to establish itself as a serious market for investors seeking opportunities to invest in education and EdTech.

At EDUKWEST we see an increased number of startups in the education space getting founded by Indian entrepreneurs, often after having spent time in the US and working for big American companies, but also new funds specially created to support the budding ecosystem.

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before raise VC EDUKWEST Academy

What Founders Should Know Before They Raise VC and Why We Chose Not To

It’s an exciting time for startups and aspiring business founders.

With investors pumping so much money into the industry it’s easy to see why. We’re hearing more and more about “unicorns” valued at over a billion dollars and companies spending enormous sums to acquire other businesses. The numbers look amazing.

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A Tutor Cloud in a MOOC World – InstaEDU raises $4 million


Back in March 2011 I wrote about the concept of a 24/7 teacher cloud that would allow learners to take instant lessons with educators at any time of the day. The obvious issue with such a service is, needless to say, scale as you need to make sure that enough teachers are actually connected at any given time.

InstaEDU seems to have cracked that task in a couple of verticals and therefore raised $4 million Series A led by Battery Ventures with participation of The Social+Capital Partnership who led InstaEDU’s $1.1 million Seed Round.

From the outside it seems that InstaEDU is actually building its startup against the stream. In times where the focus is set on self directed learning and learning sprints, InstaEDU grows 50% month over month by offering virtual 1:1 tutoring with an average session length of one hour.

Back in 2012 InstaEDU sold its offline branch Cardinal Scholars to Course Hero, another startup in the education space. The growth InstaEDU has shown since doubling down on virtual tutoring seems to confirm that decision.

Like every online teaching marketplace since the days of eduFire or WizIQ, InstaEDU features a full blown virtual classroom with interactive whiteboard and what have you. But to me the killer feature of InstaEDU is the estimated waiting time. According to the site, students have to wait less than 30 seconds on average to be connected to one of the 3000+ tutors which is really impressive.

I just wrote briefly about Hoot.Me which followed a similar approach by connecting learners and tutors via Facebook, turning the social network into study mode. The team just joined Civitas Learning with the aim to develop new features that help to decrease dropout rates based on data analysis. So flesh and blood tutors still have a niche in a world that moves towards adaptive learning.

The additional funding is planned to be used for a nonprofit branch, mobile applications and global expansion.

I had the chance to ask Alison Johnston Rue, CEO and co-founder of InstaEDU some questions which you find below.

KW: With education currently going towards more asynchronous, self paced learning options like MOOCs, InstaEDU seems to go against the trend. Yet you managed to grow month over month. What is the place of 1:1 tutoring in online education?

AJR: With MOOCs, academic content is easily scaled from one professor to thousands of students at once — which is pretty phenomenal. However, if you’ve been following the news about MOOCs, the numbers aren’t always encouraging. Most courses only have a 10 percent completion rate and San Jose State recently suspended a pilot program with Udacity after less than half of the students participating in the program passed the final.

So what does this all have to do with InstaEDU? We believe that scaling one-on-one academic support is just as important as scaling the one-to-one-thousand lecture hall experience. The conversations you have with your TA, study sessions you have in the library and late night homework help from roommates about the next day’s problem set are all critical to the learning process. Online learning platforms will need to replicate these relationships in order to be successful.

KW: Your tutors earn $20/h. Can you give us an idea of what the top tutors on InstaEDU earn per month?

AJR: The average active tutor on InstaEDU makes $70/week. And some of our more active tutors are making hundreds — even thousands — of dollars every month.

KW: In the press release you mention global expansion. What are your first target markets and do you think the same model is going to work in Europe or Asia? How are you going to make sure that students outside the US have the same choice and low waiting time?

AJR: We’ve already started recruiting tutors from top schools in Singapore, the UK, and Australia – places where English is the first language. This helps us meet our promise of having tutors available 24/7, and we also have some very active students in those areas. Part of this funding will allow us to more aggressively expand in those countries and a few others. Our site isn’t yet localized, so at this time we’re primarily focused on English-speaking countries.

KW: Your most popular subjects are computer science, statistics and calculus. We see a similar trend at learning platforms like Udemy on which courses around tech subjects are the most popular. Do you think that learners in those subject matters are more tech-affine than those who study liberal arts?

AJR: While computer science majors are probably more tech-savvy than, say, English majors as a group, the same STEM focus exists in offline tutoring, so I don’t see that as the primary driver. In most cases, it’s just more obvious when you need a hand with math or science. If you have a calculus assignment that you don’t understand, often you can’t even get started. In contrast, students who don’t really understand an English assignment can often muddle their way through it, without really knowing how good (or bad) their work is. In short, any subject in which a student has to seek out a “right” answer is one where it’s going to be more obvious that extra help is needed.

EDUKWEST Sunday Review

Sunday Review: Grockit sells to Kaplan, Voxy raises $8.5m and Hoot.Me joins Civitas Learning

EDUKWEST Sunday Review

Grockit brand and technology sold to Kaplan, team rebrands to Learnist

The writing was somewhat on the wall for a while as Farbood Nivi, founder and CEO of Grockit made clear that the focus of the team had shifted from the test prep platform towards their new product Learnist. Farb and I talked about this in January during our EDUKWEST interview.

Back then he stated that though Grockit was still a very good business he felt that he and the team had achieved pretty much achieved they could do with the startup and that Learnist was far more exciting and had a big potential as a key player in the lifelong learning space. I also imagine it to be pretty difficult to have two totally different products under one roof, as Learnist up to the deal with Kaplan was basically just a product within Grockit, not a startup of its own.

The acquisition of the Grockit brand and technology by Kaplan and the rebranding of the team to Learnist once again shows that Farb is one of the smartest founders in edtech today. It’s a win-win for all sides involved. Kaplan gets a great brand, product and potentially nice group of customers, Farb and the team can now go all in with Learnist with some extra cash in the warchest. Though the details of the deal have not been made public, Farb told AllThingsD that

“Selling Grockit gives us considerable runway without any dilution of shares.”

The interesting part now is whether Kaplan will be able to integrate Grockit into its business and build on the brand. I don’t know how much about the strategy is out there already, but I can say that the “product owner” of Grockit is going to be a familiar face to the EDUKWEST audience. As soon as he has settled into the new role, we are going to have him back for a talk.

Voxy raises $8.5 million from Pearson and Rethink Education

If people ask me about interesting companies in the mobile education space, Voxy is definitely among the names I mention. Paul Gollash and his team have built one of the best mobile experiences in the language learning space, leveraging technology and content in a way that actually make sense.

If you want to know how it all started, I did an interview with Paul just after his first appearance at TechCrunch50.

The latest Series B round led by Pearson brings the total funding to $16.5 million according to CrunchBase. Pearson is planning to integrate Voxy’s technology into its own products for English learners across the globe.

Which leaves us with two questions.

1. Are mobile learning startups FNACs (feature, not a company)?
2. When is Pearson going to acquire Voxy?

To the first question, right now there are not many examples of startups in the mobile space that have managed to create a huge company compared to classic web based companies like Facebook, Amazon, Google etc. Sure, the future is mobile, no doubt about it, but if you take a look at Instagram which built up a huge audience you also see that it ended up as being a part (feature) of Facebook. Vine and Twitter is another example and Rovio is probably the only startup at the moment that made an impact comparable to web startups.

So there is the question if Voxy (or any other mobile first learning startup) is going to be big enough to stand on their own or whether they all end up being part of an established player that has a larger footprint throughout different verticals like publishing, physical schools etc.

Which takes us to the second question. Investing in a startup to later acquire it is a strategy we have seen quite often with Pearson. I would say depending on the acceptance of Voxy among the Pearson audience and the general performance I give Voxy a maximum of three years as an independent startup.

Hoot.Me joins Civitas Learning

I learned about this “acquihire” through a LinkedIn update by Hoot.me founder Michael Koetting who now is product manager at Civitas Learning. There are no terms disclosed but Michael told me via email that

Hoot.Me is now part of Civitas Learning and will continue to be fully supported.

Michael and his co-founders created Hoot.Me after they were not able to get answers to difficult questions in their massive college seminar classes. Over the years more than a million interactions took place on the platform and as more and more colleges and universities jump on the MOOC bandwagon, real interactions with real people could be a key success factor for many students.

Civitas Learning just raised $8.5 million in June for its data driven platform that aims to reduce dropout rates through predictive technology.