Education technology-focused startups raised a record-breaking amount of capital in the first quarter of 2014. The financial boost represents a new five-year high — one that should come as a motivating sign for entrepreneurs here in the Hub.
Investors have poured more than $559 million into the ed-tech industry over the last three months, according to CB Insights. What’s more, the history-making quarter followed what was a big 2013. Investments exceeded $1.25 billion, marking the second straight year the ed-tech sector crossed the billion-dollar line.
Early-stage investments have been dominating the ed-tech space. More than three-quarters of the deals that have occurred over the last eight quarters have been at seed or Series A stages. Mid-stage deals did see significant year-over-year growth, however, with Series C activity jumping 70 percent from 2012 to 2013.
Investors told TechCrunch that ed-tech financing falls into four large buckets:
Technologies targeting the K-12 classroom; technologies or services focused on secondary education; continuing education and professional learning; and consumer-facing educational products and services.
Several point to the Common Core State Standards Initiative as one of the boons to the ed-tech industry. The effort to standardize education, launched in 2009, has created a single educational framework across much of the country, thereby allowing companies to sell directly to districts with the knowledge that their technology can be applied from the East Coast to West.
Locally, Boston Mayor Marty Walsh has made it clear he wants to see more technology in the city’s K-12 classrooms. He recently visited Back Bay-based nonprofit LearnLaunch, which is incubating more than 35 ed-tech startups and 100 entrepreneurs, alongside Melissa Dodd and Mark Racine, chief of staff and CIO of Boston Public Schools, respectively.
While there, Walsh said he wanted the technology being built out of LearnLaunch in the hands of Boston’s students — “in every school for every neighborhood.” He added, “We want to make Boston the tech capital of the world.” The growing ed-tech sector will be what helps achieve that.
Although Silicon Valley saw the highest number of ed-tech deal over the last two years, ringing in at roughly 16 percent, according to CB Insights, the sector is swiftly gaining traction here in the Hub.
In September, the Bill & Melinda Gates Foundation awarded $500,000 to Boston-based education portal ConnectEDU. The following month, Facebook Founder Mark Zuckerberg made his first ed-tech investment, granting $4 million to Cambridge-based Panorama Education, while local peer-learning platform Flashnotes helped kick off 2014 with a $3.6 million Series A.
Between the area’s storied institutions of higher learning and a public school system that’s repeatedly recognized for its academic excellence, it’s no surprise Boston is becoming a hotbed for ed-tech innovation.
And the momentum is only starting to grow.
Know an influential Boston-area alum who’s making an impact on the local community or economy? Nominations for BostInno’s Alumni Impact Awards are open through April 14th. The winners will be announced live at Boston UpFront on April 30th. Nominate and get tickets now.
Image via CB Insights