Months after receiving a $500,000 grant from the Bill & Melinda Gates Foundation, Boston-based ed-tech startup ConnectEDU has filed for Chapter 11 bankruptcy protection, potentially leaving a Maryland ed-tech VC firm in the lurch to the tune of $1 million – and putting a project related to the nation’s Common Core education standards on ice.
In its Monday filing, ConnectEDU cited its inability to pay debt owed to over 200 creditors. It estimated assets of $1 million to $10 million and liabilities between $10 million to $50 million.
Workers received letters Monday, notifying them they were to be terminated as of 3 p.m. that day.
One employee, who asked to remain anonymous, estimated as many as 50 lost their jobs Monday – including CEO Evan Nisonson. CFO Paul Sheppard, reached by phone Tuesday afternoon, confirmed that Nisonson is no longer with the company. He contradicted an earlier report, published here, that he had been cut as well. “I’ve been asked to stay on,” he said.
Sheppard declined to say anything further about the company’s status or its future. He said he could not confirm the reported number of layoffs.
“ConnectEDU was forced to terminate all but the approximately 10 of its approximately 65 employees, with the remaining employees associated primarily with Academic Management Systems, Inc.,” according to a press release sent to BostInno Tuesday evening.
ConnectEDU’s top creditor is New Market Education Partners, a Maryland-based venture capital firm investing in education innovations. ConnectEDU says it owes New Market $1 million. Other creditors include The New York Times Co. and AOL.
Founded in 2002, ConnectEDU offers a service designed to help students and academic advisors track their courses and their performance through high school and college, to aid with education and career planning. In 2011, the company raised $10 million in venture funding led by New York investment bank Allen & Co.
Just in September, ConnectEDU had received a $500,000 grant from the Bill & Melinda Gates Foundation to develop an online teaching and learning platform to improve students’ literacy skills in the Common Core Standards. It also had completed a round of fundraising in October 2011 for $10 million, a significant triumph for the bolstering of its web platform to help students in the college admissions process.
ConnectEdu plans to “pursue sale and restructuring alternatives to enable the CoursEval business to exit chapter 11,” the release stated.
Meanwhile, here’s ConnectEDU’s Chapter 11 bankruptcy filing.