Investments in ed-tech start-ups booming

March 21, 2012

In recent years, venture capitalists have invested millions in education-technology firms, trying to cash in on a market they view as ripe for a digital makeover. Data from the US-based National Venture Capital Association show that investments in ed-tech start-ups nationwide rose from $146 million in 2002 to $429 million last year. The boom really took off in 2009, when venture capitalists poured $150 million more into ed-tech companies than they did in the previous year, despite the market downturn. Michael Staton, founder of Inigral (with whom Academica Group has a strategic research partnership), says "something in the zeitgeist" is providing education entrepreneurs with access to funding, advice, and talent once reserved for other sectors. It's not just coming from for-profit organizations; last year, the Bill & Melinda Gates Foundation awarded Inigral $2 million from a $4-million investment. Staton believes that an increasing acceptance of online learning, rather than any particular new technology, has allowed start-ups to earn support for new products. The Chronicle of Higher Education (free access)