How Chicago edtech companies are rising to the head of the class
You could put it on the blackboard! Yes, Chicago is an epicenter for educational innovation.
Earlier this month, two Chicago-based education technology companies - ThinkCERCA(who we told you about last year) and Classkick - raised institutional venture capital rounds. And while both companies are individually impressive and already influential in the burgeoning edtech sector, they have a lot of corporate classmates in the Windy City that are also attracting strategic and pure venture capital.
As we write about regularly, instructional delivery models in education - particularly within K-12 - are rapidly transforming. Educators have access to more digital resources than at any point in history and are using a combination of apps, videos, and websites to flip their classrooms, personalize instruction, and assess student performance both individually and in aggregate.
Startups, often founded by educators who sense opportunity amidst all of this disruption, smell blood.
“Big companies with top-down approaches and highly paid sales teams don’t get what startups are good at,” explains Howard Tullman, longtime entrepreneur (edtech and otherwise) and CEO of Chicago’s digital media incubator 1871. “But what startups need to understand is that they have to solve the adoption issue (of their product) first, and then they can worry about writing a giant contract.”
Combining the best of both worlds
In recent years, several 1871 edtech companies have raised angel, institutional and corporate venture capital.
ThinkCERCA, which creatively couples informational text and reading assignments for students grades 4-12 with Common Core-aligned assessments, in March raised $3.2 million in venture capital in a round led by the venture capital arm (managed by Atrium Capital) of Chicago area educational publishing pioneer Follett. Other investors included Chicago-based Math Venture Partners, Amicus Capital, Great Oaks Venture Capital, and angel investor/OpenTable founder Chuck Templeton. ThinkCERCA has previously raised $1.5 million from individual investors.
Beyond the capital from Follet, which will be deployed to sales and engineering talent, ThinkCERCA CEO Eileen Murphy (a former Chicago public school teacher and administrator) sees relationships to tap into from a company that was founded two years after the Chicago fire (1873).
“One thing that Follett can bring today is a lot of credibility with customers, which helps us stand out.” We have yet to work out all of the details of the partnership, but we are figuring out how to leverage their enormous network of schools.”
Follett CEO Mary Lee Schneider concurs.
“Follett works with more than 70,000 schools across the country,” she said, “and through this partnership, we’ll be able to expand ThinkCERCA’s reach, as well as foster developments that will make the technology even more effective and easier to use.”
ClassKick, another Chicago edtech company to recently raise venture capital, has already attracted customers nationwide and in 75 countries around the globe with its slick technology that lets teachers individually monitor students in their classrooms as they are working on problems on their iPads. The company raised a $1.7 million seed round led by leading edtech investor Kapor Capital, Lightbank, Great Oaks Venture Capital and Yammer founder Adam Pisoni. ClassKick’s founders hail from Teach for America and Google.
Other 1871 edtech companies that have either recently raised significant outside capital or are expected to include Learnmetrics (an analytics company that aims to do for educational data what Mint.com does for financial data), NextTier Education (which is reimagining the college application process) and Infiniteach (developer of the Skill Champ app for students with autism).
Beyond funding
Edtech companies springing up at 1871 and other Chicago locations are also benefiting from local organizations like Leap Innovations and DV X Labs. Founded by former New Schools for Chicago CEO Phyllis Lockett, Leap Innovations is based in 1871 and helps educators discover the best new educational innovations (while also providing feedback to edtech developers). DV X Labs, a joint venture between 1871 and DeVry, is an accelerator for edtech companies seeking to pilot and market their offerings.
Of course the best resource for an early stage edtech company (in Chicago or otherwise), explains 1871’s Tullman, is a good customer relationship management system.
“They need a good CRM program to find champions and advocates within schools, and not spend too much time on marketing to everybody,” he says. “I wouldn’t even call it viral. It’s simply class warfare.”