Riiid focuses on the English language test TOEIC, and says its algorithm helps learners with multiple-choice questions by analyzing their answers and recommending tailored practice. With the new cash, led by Korean venture fund Premier Partners, Riiid will expand to include the Korean civil service exam and SAT. 

Investors are backing AI tutoring despite recent failures. After raising more than $180 million, New York-based Knewton failed to deliver its promise of a “mind-reading robo tutor.”

“If it has a big enough dataset to train AI, eventually there will be breakthroughs in this area,” Jason Palmer, general partner of New Market Venture Partners, told Karma in an interview. “As a venture investor you have to be open to the possibility that AI keeps getting better and better.”

The Asian edutech market is expanding rapidly as judged by spate of large fundings recently, while the U.S. market has by comparison been quiet. India’s Byju became the world’s largest private edutech firm after a $150 million fund-raising boosted its valuation to $5.5 billion this month. Chinese tech giants Tencent and ByteDance are also betting on the market expanding, with Tencent backing Yuanfudao, valued at $3 billion, and ByteDance betting on English learning platform Gogokid. Insurer Ping An joined the competition by acquiring iTutor Group. 

• Riiid’s AI data solution, which can be applied to any multiple-choice test, may drive down the cost of private tutoring. “AI in the long run will enable human tutors to tutor more students much more effectively,” Troy Williams, managing director at edutech investor University Ventures, told Karma in an interview. 
• Asian demand for test preparation is burgeoning. The Chinese market is estimated to reach $29 billion in 2019; the Indian online education market is projected to grow to $1.96 billion in 2021.
• U.S. edutech companies raised $1.45 billion across 112 deals in 2018, a 20% increase in dollar amount from 2017, according to data from Edsurge. 
• AI tutors may be seen as a better bet than massive online open courses. Once a hot spot of edutech, they are criticized for low completion rates — only 15% of students complete the courses.  
• Karma Takeaway: With the potential to reduce the cost of private tutoring, AI education products to meet high demand in Asian countries are attracting investors.

The post S. Korea’s Riiid Snags $18 Million: Asian Edutech’s AI Boom appeared first on Karma Impact.

The mobile app will teach finance in a step-by-step manner much the same way the popular meditation app Headspace offers deep relaxation techniques. The U.K. company, with more than 400,000 subscribers to its daily newsletter, says the app offers bite-sized lessons designed to be consumed on the way to work or during a short break. 

“We built the app to help people become finance pros on their morning commute,” Max Rothery, vice president of community at four-year-old Finimize, told Karma. “Our overarching mission is to empower our users to act as their own financial advisor.”

The app, Finimize’s second, is only available in the Apple store, and Android users must join a waitlist. 

• The new app covers more than 50 financial topics including cryptocurrencies and ETFs with lessons that aim to cut beyond jargon while informing users to make financial decisions. It also includes user reviews on investment providers and financial products, and Rothery said the team is focused on adding additional audio content.
• The app — in testing following a soft launch nine months ago — includes learning modules not included in earlier offerings like its newsletter that breaks down financial news.
• Finimize has no plans to sell financial products, Rothery said, and will keep focused on financial education. Doing so helps Finimize bill itself as a source for unbiased investing knowledge, while limiting its ability to build a revenue stream. The app is free, with premium subscriptions offered for $8.99 per month or $59.99 annually.
• The company raised $1.97 million two years ago from Cherry Ventures, according to Pitchbook.
• Karma Takeaway: The Finimize app builds on the company’s effort to teach money-management to a community that is mostly single, without children or and whose finances are uncomplicated. It’s part of an overall trend among fintech firms to simplify investing for a tech-savvy generation.

The post Finimize App Seeks to Build Community Among Newsletter Readers appeared first on Karma Impact.

The money brings total private investment in eight-year-old Byju to $924 million, after earlier investments from high-profile firms including Chan-Zuckerberg Initiative, Sequoia Capital, International Finance Corp., Tencent Holdings and Canadian Pension Plan Investment Board. Byju’s, according to TechCrunch, wants to enter the U.S., U.K., Australia and New Zealand and in January bought Palo Alto, Calif.-based Osmo. 

Education investor Owl Ventures also participated in the round, which Byju’s said will help it create “programs for students in smaller cities, regions and newer markets.” Byju’s reached profitability in May.

• Investments in the Indian edtech sector hit $742 million in 2018, a nearly nine-fold increase from 2017’s $89 million total. The last few months have continued that trend, with CollegeDekho raising $8 million in May and Unacademy landing $50 million two weeks ago.
• Of India’s population of 1.3 billion, around 617 million are school-aged children and young adults, according to UNESCO.
• The edutech sector has surged in India thanks to growing access to educational programs on smartphones and the Internet, which supplement crowded and underfunded brick-and-mortar schools. Education in India lags much of the world according to the Legatum Prosperity Index. 
• Karma’s Takeaway: India’s burgeoning edutech market is being fueled by its rapidly growing youth population and remaining investor appetite, but the space is getting crowded.

The post India’s Most Valuable EduTech Startup Raises $150M, Looks to Expand Internationally appeared first on Karma Impact.

ETS Accelerate will focus on startups addressing future job skills, as well as companies serving the over 1 billion speakers of English as a second language. ETS, provider of exams including the GRE and PRAXIS, had been working with LearnLaunch for the past year. 

“Our experience was very positive and we are now taking it to the next level by becoming the primary LP in a new $2 million fund to increase the impact and value we all can offer to educational institutions, other edtech companies and individual learners,” Richard Varn, ETS’ Venture Partner Lead, told Karma.

• ETS, founded in 1947, is relative newcomer to edutech. The company acquired English language learning startup Edusoft in 2011 and exam provider Questar in 2017. In February, it also invested $50,000 in both Knack, a tutoring marketplace, and NurseDash, a healthcare staffing platform.
• Other testing companies have also been late to edutech investing. College Board, which is behind the SAT and standardized AP tests in U.S. high schools, isn’t currently investing in private equity or venture capital, according to Pitchbook.
• ACT has been the most aggressive, either investing in or acquiring 11 companies since 2013. Tech-focused firms like Cengage Learning are ahead: Cengage has invested in or acquired 25 companies since 1992, and in May announced its merger with McGraw-Hill.
• Karma Takeaway: The rapid integration of technology in standard curriculum is forcing established companies to invest in edutech and keep pace with tech-savvy students.

The post GRE-Provider ETS Continues Tip Toe into EduTech Investments appeared first on Karma Impact.

In 50 of the country’s largest districts, it would take at least five years for teachers to save for a 20% down payment on a home, according to a study by the National Council on Teacher Quality. And that’s if they made the district’s maximum salary and saved 10% of their annual income.

San Francisco-based start-up Landed wants to help. The company, the brainchild of three Bay area entrepreneurs, provides capital for teachers to make down payments on properties.

“We want to see Landed as an option to ‘the bank of mom and dad,’” co-founder Alex Lofton told Karma.

Typically the company pays half of a down payment (about 10% of the value of the sale). When a homeowner sells the home, Landed takes a 25% share of the gain in the property value. There’s also a buyout option on the part of the homeowner. It also generates revenue through referral fees from brokers.

“We’re more than down-payment support,” Lofton said. “We see ourselves as a set of projects that will help people feel more secure.”

Two months ago, four-year-old Landed completed its third, and biggest, funding round with an investment from Reddit co-founder Alexis Ohanian’s venture firm, Initialized Capital. Now, the founders say, they’re thinking about further funding and looking to expand nationwide. 

So far, the for-profit company says it has helped more than 200 educators purchase more than $100 million worth of residential real estate. It has partnerships with more than a half-dozen school districts, which inform educators of Landed’s services. 

It’s currently doing business around its Bay Area headquarters, in Southern California, Denver and Seattle and just signed an agreement with Hawaii’s school district. It hopes to use its new funds to expand out East, and officials say they are in talks with Boston and Washington, D.C., districts.

Capital for the down payments comes from outside philanthropies and other investors, including a $5 million fund that Landed is managing for the Chan Zuckerberg Initiative, a non-profit created by Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, to promote science and education programs, among other initiatives. 

Soaring property values in wealthy areas, as well as the fact that homeowners spend at least a decade in a home before selling, would boost the value of the down payment Landed grants the buyer. In Palo Alto the median home price has more than doubled to $2.93 million over 10 years, according to Zillow’s 2018 Consumer Housing Trends Report. 

Teacher Shortage

Landed’s growth comes as many districts struggle to recruit and retain talented teachers. Citing a 2016 study predicting a shortage of 110,000 teachers by 2018, an Economic Policy Institute report found that there was “no sign that the large shortage of credentialed teachers’’ is going away. 

Cost of living issues, of which home buying is the biggest expense, are a contributing factor to the teacher shortage. The Economic Policy said that “teachers have long been underpaid compared with similarly educated workers in other professions, with a pay gap that has grown substantially in the past two decades.”

“It’s not the driving cause of all shortages, but it is one of the reasons that school districts are having difficulty filling positions,” Hannah Putman, managing director of research for the National Council on Teacher Quality, told Karma. 

History and Workforce

Lofton, Jonathan Asmis and a third co-founder, Jesse Vaughan, have long-time interests in education and social impact issues. Lofton’s mother was a teacher and Asmis has educators in his family, so they understood the profession’s salary limitations. 

After hearing about a Stanford program that helps the school’s tenured professors purchase homes in the Palo Alto area, where the median price can run well over $2 million, they zeroed in how they might provide a similar service for public school teachers. Their idea dovetailed with a recent trend among districts to provide housing incentives to recruit teachers, even building housing complexes where educators can rent apartments.

“There is a lot of interest across the country,” Lofton said. 

There’s enough interest, in fact, that Landed  faces increasing competition from other privately funded firms, including Patch Homes, Point, and Unison Home Ownership Investors, all of which offer versions of home-equity financing. Point and Unison have raised $30 million and $40 million, respectively. 

Lofton said that the three co-founders have complementary skills. Asmis handles the company’s financial management and funding rounds. Lofton oversees outreach to school districts while Vaughn focuses on building relationships in the real estate community. 

Miriam Rivera of the venture capital firm Ulu Ventures, an early Landed investor said she was impressed with the company’s mix of educators, technology and financial services executives.

“They brought different professional and life experiences to a market that hadn’t been looked at in a new way in a long time,” Rivera wrote in an email to Karma.

Landed has raised $11.6 million, including Initialized’s $7.5 million investment in April.  

Process and Challenges

In its signature program, Landed provides up to half an educator’s down payment for purchasing a home. For example, for a $750,000 house — a little higher than the median for Los Angeles — Landed would provide $75,000 of the 20% down payment. The company sees a return only when the homeowner buys out the investment prior to the ending of a mortgage agreement or sells the home. 

If the property increases in value, Landed receives an additional 25% of the gain on top of its original investment. But if the home decreases in value, the company shares in the loss. For a $750,000 home that gains $100,000 in value, Landed would receive an extra $25,000. In this “shared equity investment, the potential return to investors depends on what happens to the housing market,” Lofton said. 

But the company also earns referral fees from a network of real estate agents who help teachers find homes. This part of the business functions as a separate real-estate brokerage. 

To be sure, the Landed model could create a financial burden for teachers to repay the company at a future time. Landed is banking that the home buyers will earn more as their career progresses and follow sound money management. Landed has consultants to work with families on budgeting and financial wellness. 

In a phone interview with Karma, Dan Goldhaber a professor at the University of Washington and director of the school’s Center for Education Data & Research, raised a different issue about school districts participating in real estate initiatives. While these efforts “can help with retention,” Goldhaber is more inclined to boost teacher pay. “Direct compensation would be a better solution,” he said.

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On Our Radar: Deals we are paying attention to for their impact on industry.

360Learning, an e-learning training platform for business, raised $41 million in a Series B investment to fund an aggressive push into the U.S. and U.K.

Investors in the round included Bpifrance, Hi Inov – Dentressangle, XAnge, Educapital, and ISAI.

Paris-based 360Learning opened a New York office in 2018 and a London office last month to take advantage of the growing demand for e-learning through collaborative learning environments. Founded in 2013, the company works with more than 1,200 enterprises in 160 countries and recently added North American clients Kingfisher, Pizza Hut and Air Canada to its roster.

“Organizations are recognizing the power of collaborative learning,” said Josh Bersin, global industry analyst and founder of Bersin by Deloitte. “360Learning is a pioneering platform that delivers collaborative learning in a unique way and helps L&D teams embed collaboration into the flow of work.”

The funding will also be used for product innovation and doubling the size of 360Learning’s investments in research and development, the company said.

Frances Katz is a freelance writer focusing on media, culture and technology. Her work has appeared in The Atlantic, The Week, The Washington Post, USA Today and other publications. She lives in Atlanta.

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On Our Radar: Deals we are paying attention to for their impact on industry.

Viacom’s Nickelodeon has acquired Sparkler, an early-childhood learning platform that measures children’s developmental progress. The company’s technology will be used to bolster Nickelodeon’s preschooler-focused Noggin streaming service.

Sparkler co-founder Kristen Kane has also been appointed Noggin’s executive vice president. Terms of the deal were not disclosed.

Noggin offers a library of more than 1,500 episodes of Viacom’s popular children’s shows like Paw Patrol, Dora the Explorer and Peppa Pig. Nickelodeon will integrate Sparkler’s learning technology into Noggin with the aim of creating engaging educational experiences for kids, whose progress can be tracked by parents.

“Pairing Sparkler’s capabilities with our curriculum-driven content will fully transform Noggin into a premier interactive learning destination for preschoolers and their families,” Nickelodeon president Brian Robbins said.

Sparkler previously received funding from NewSchools Venture Fund as part of its NewSchools Ignite: Early Learning Cohort. NewSchools is a nonprofit investment firm that invests in education companies via charitable funds. Its ventures include a number of edtech companies such as Khan Academy, Newsela, and Brightwheel, as well as innovative schools and leadership programs.

“NewSchools invested in Sparkler when it was an early-stage product, in large part because their strategy of thoughtfully connecting parents, educators and healthcare professionals had high potential for positive impact,” Stacey Childress, CEO of NewSchools Venture Fund, told Karma Network on April 4.

The acquisition will help Nickelodeon, among the U.S.’s top children’s networks by viewership, hold onto its market share as kids abandon traditional television for sites like YouTube or streaming services like Netflix.

Adding an educational factor to its service also differentiates Noggin from the children-focused streaming efforts of other entertainment giants, such as Apple, which has a partnership with Sesame Workshop for its recently announced Apple TV+ service, and Disney+, the family-friendly streaming service from the Walt Disney Co. expected to launch late this year.

Nickelodeon reported that Noggin subscriptions have tripled between 2017 and 2018. According to Bloomberg, it boasts around 2.5 million subscribers.

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On Our Radar: Deals we are paying attention to for their impact on industry.

Tinkergarten, a nationwide ed-tech learning program for children through age 8, received $21 million in financing from WndrCo, a holding company run by former DreamWorks and Dropbox executives.

WndrCo, led by Dreamworks founder and former Walt Disney CEO Jeffrey Katzenberg, has made sizeable investments in digital entertainment, restaurant-recommendation services and direct-to-consumer retailers. Tinkergarten marks their first commitment in the ed-tech space.

Meghan Fitzgerald, Tinkergarten’s co-founder and chief learning officer, said in an email that the money would be used for “building out the core team to support the expansion of our network of teachers; developing the curriculum, training, support, and technology, and providing access to even more that we do not currently serve.”

Seven years ago, Fitzgerald, an early childhood educator, led a group of children in outdoor play and learning games in a Brooklyn park. From there, she and her husband, Brian, went on to found Tinkergarten. The program now has more than 170,000 young participants and 2,000 instructors in all 50 states spending time outdoors developing new skills to prepare for kindergarten and the early grades.

WndrCo partners Ann Daly, Anthony Saleh, and Andrew Chang will join Tinkergarten’s board as part of the financing deal. A spokesperson for WndrCo said “WndrCo believes the ed-tech market represents a huge growth area. With the WndrCo partners’ experience in the child and family category, it was a natural fit for the team.”

WndrCo believes Tinkergarten has the potential to be a leading global brand in the child and family category, Fitzgerald says, and shares Tinkergarten’s vision of positively affecting the way children learn and grow across the world. She also said WndrCo was impressed with Tinkergarten’s ability to leverage a technology platform to enable families to connect with certified local teachers offering unique play-based lessons in an outdoor setting.

Early investors who remain committed to Tinkergarten include Omidyar Network, Owl Ventures, and Reach Capital. In an essay published on the online platform Medium, Omidyar partner Isabelle Hau said they were impressed by Tinkergarten’s quality curriculum, workforce, and scalability.

She said Tinkergarten’s teacher-leaders come from a variety of backgrounds, education, and experiences.“ Tinkergarten turns leaders into entrepreneurs for open-ended play and learning.”

Hau also wrote that they were impressed with Tinkergarten’s scalable technology model. She described it as “very low tech on the front end, yet makes use of best-in-class technology for hiring, selecting, training, marketing, scheduling, and tracking learning outcomes. This combination makes it possible to bring the Tinkergarten model to new communities rapidly.” Tinkergarten offers an outdoor-based curriculum that can be used by teachers in rural, urban or suburban outdoor environments and training takes about four weeks. In the metro Atlanta area, classes average about $160 for eight sessions.

“We see significant growth opportunities beyond the reach of our current programs serving: babies-8 years old,” Fitzgerald says, “Tinkergarten is playing an important role in helping to preserve this critical developmental time in life for kids to experiment, take risks, play and learn together in social settings—in short; we’re taking back childhood.”

Frances Katz is a freelance writer focusing on media, culture and technology. Her work has appeared in The Atlantic, The Week, The Washington Post, USA Today and other publications. She lives in Atlanta.

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