News from the Field

Foundations and venture capitalists vie to reform funding for educational technology

The recent release of the 2016 National Education Technology Plan reflects a growing interest in supporting a national vision to “ensure equity of access to transformational learning experiences enabled by technology.”

Educational technology is a broad field: At its core, it refers to the use of technological tools in teaching and learning. In practice, however, this can mean everything from offering online college courses, to employing language-learning apps like DuoLingo within traditional K-12 classrooms, to networking entire schools to allow for greater digital capabilities.

The National Education Technology Plan includes recommendations in five key areas—learning, teaching, leadership, assessment, and infrastructure—and emphasizes systemic changes to promote the integration of educational technology in teaching and learning. But while more and more schools are experimenting with new kinds of educational technologies, many simply don’t have access—to broadband, tools, and teacher training. And some question educational technology’s efficacy altogether: Does technology necessarily lead to better learning outcomes?

Both philanthropy and private investment have ideas for ensuring this equity of access, which include a wide range of products and services that reflect different educational philosophies and business models. The EdSurge Product Index developed by leading ed-tech publication EdSurge breaks these varied offerings into five major categories:

  • Curriculum products
  • Teacher needs (tools for assessment, classroom management, etc.)
  • School operations (data systems, networks and hardware, professional development, etc.)
  • Post-secondary (massive open online courses, or MOOCs, digital courseware, etc.)
  • Other

This “Other” category—which encompasses everything from games, to apps for children and parents, to digital textbooks, to online tutoring and video instruction—was the biggest (at 64 investments worth $570 million), both in terms of dollars and in number of investments in 2014.

While the Bill & Melinda Gates Foundation leads the pack in terms of foundation support—ed tech has long been the core focus of their overall commitment to improving education—there are many other types of investors involved in this field as well. Educational technology is also big business, generating billions of dollars each year, and new initiatives often rely heavily on venture capital. EdSurge provides some additional insights into educational tech financing trends, and Hack Education is also in the process of compiling a matrix of ed tech financing.

Audrey Watters at Hack paints a picture of this funding landscape in “Who’s Investing in Ed Tech (2015),” outlining the top 10 most active investors last year. These include: NewSchools Venture Fund500 StartupsLearn CapitalLearnLaunchXKapor CapitalGSV CapitalTechStarsAndreessen Horowitz, the Bill & Melinda Gates Foundation, and Deborah Quazzo.

However, Watters cautions: “I’m not sure that the activity of investors necessarily reflects their influence in dictating the conversation about the direction of education or ed-tech.” Since education technology investment is inextricably connected to education innovation and reform, it’s important to consider such investments through both business and political lenses. With private investments, the concern is that schools might be forced into investing in proprietary solutions, while philanthropic investments carry the risk of becoming merely episodic or underscoring mission-driven value systems.

Foundations may have very different motivations than venture capitalists for supporting ed-tech initiatives, and this further muddies the funding waters. As Watters points out, it is important to consider not only “Whose story of the future of ed-tech is represented by funding dollars?” but also, “Whose voice is lost by the flood of dollars into education technology?”

Learn more about how funders are considering these issues in our Education Issues section.

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