VCs don’t usually like education funding because it doesn’t tend to bring great returns (since, you know, it’s not usually a profit-making business, nor should it be).
Perhaps that’s changing though. Take a look at this Forbes profile.
“Education is a hard area to invest in,” says Reach Capital partner Jennifer Carolan. “But what makes us excited is how fast education companies are growing now, taking the place of the old. They’re taking their share and just growing so fast.”
Ed tech is still waiting to have the type of massive, multibillion-dollar exit that can kick-start new interest, Reach’s partners know. But it hasn’t been without recent success, Carolan says. Through its first fund affiliated with NewSchools Venture Fund and then its first independent fund, Reach I, Reach Capital has had several positive exits, including WriteLab, which was acquired by Chegg; Zaption, acquired by Workday; and Schoolmint, acquired by HeroK12. Startups such as Repl.it, Epic, Nearpod, Volley and Newsela, meanwhile, have raised significant follow-on funding since Reach’s investment. Add it all up and Reach I has reached a “double-digit” positive IRR for investors, says Carolan, with more exits looming.
I won’t pretend I know what half of that means!
That said, no industry is going to exist without a heavy investment in tech going forward. If educators think we are going to operate in a proudly defiant and analog world, we’ll be left behind (if we haven’t already been). EdTech isn’t going away, so the question is merely what can be done with the tools it provides instead of whether or not to develop said tools. And maybe EdTech can help educate those who are still off the educational grid.
On the other hand:
Including their staff, the Reach Capital team combines for 16 years of classroom teaching experience and five advanced education degrees.
That’s not that much experience for what appears to be half a dozen people, you know. But maybe it works out and helps to transform education as we’ve long known it. I suppose we’ll see.