Michael Brown of Bowery Capital and Kelli Fontaine of Cendana Capital discuss trends and themes using Cendana Capital manager data.
We at Bowery Capital released the 2016 edition of Opportunities In Vertical Software in November, which laid out our point of view on ten specific verticals and the potential for various software solutions to dominate each of these ten verticals in the coming years. For ten weeks, we are releasing content focused around the impact of software on these ten industries. We covered the Legal Vertical released prior to the new year, and have also covered the Restaurant, Insurance, and Construction verticals in weeks prior. Yesterday we released an Interview with David Blake discussing the education software space. In our third post for the Education Software Deep Dive we follow up with an analysis of Education market themes, players, & investors.
Education Market Themes:
(1) Personalized Learning – Personalized (adaptive) learning, empowered by machine learning, can adjust to a learner’s demonstrated performance level, and anticipate what types of resources learners need at a specific point in time to make progress. This approach allows for teachers to manage a more effective one to one relationship with an individual student. There is also a strong push for the adoption of personalized learning tools as 90% of parent’s now support the idea across all levels of education.
(2) Learning Analytics – Big data analytics platforms can enable active learning, identify students in danger of failing, and provide targeted assistance. Equipped with the correct data, a learning analytics platform sets the ground work for personalized learning as it allows teachers to track progress, be more informed about decisions, and engage in a more meaningful way with students. A proper analytics platform also empowers family members to access and consider student progress. This can help strengthen partnerships between the school and family, leading to a stronger educational experience for the individual.
(3) Online Lesson Planning – There will be more opportunities in this space as flipped classrooms (students learning outside of the class so that class time is used for higher level skills work) require teachers to move courses online. Already, there are startups attempting to incentivize teachers sharing of lessons plans, test materials, and coursework through gamification and rewards. As this market develops, integrations with analytics and personalization platforms may be possible to create a centralized hub for tech-enabled teachers.
Education Industry Major Players:
The 3 major companies in the education technology space that dominate the content market are McGraw Hill, Pearson, and HMH. On the LMS side, players like BlackBoard and Moodle offer nearly ubiquitous solutions to facilitate the planning, implementation, and assessment of the learning process. The online knowledge repository space is largely owned by Lynda.com which offers lessons and instructional videos online with Kaplan taking a major share of the test-prep space. Finally, companies like Rosetta Stone and Pluralsight offer leading solutions in the professional training sector.
Education Industry Emerging Players:
We’ve seen several interesting emerging technology players in the education technology vertical over the last few years. To highlight a few in the professional development space, there is Lessonly, which provides all the content elements companies need to build lessons including courses/schedule assignment, self-registration, progress tracking and integration APIs, and Grovo, which combines technology, engaging content, and hands-on advisory support to deliver a better way to learn at work. Also worth noting is Civitas Learning which offers a cloud-based, predictive analytics platform that delivers insights to universities so that they can improve student success. For educator collaboration there is BloomBoard, which provides curated collections of resources, on topics related to individual educators’ unique classroom challenges.
Most Active Investors Focused On Education Technology:
Prominent investors in this industry include Accel Partners, SoftTech VC, and First Round. There are also several more-focused education VC players such as Learn Capital, Rethink Education, and the Imagine K12 accelerator. Some other investor active in this space are Learn Launch, Mass Challenge, and University Ventures.
Education Market Themes Link Roundup For Emerging Software Founders:
CB Insights: https://www.cbinsights.com/industry?sector=21&industry=67&setup=3#top_investors-pane
EdTech Magazine: http://www.edtechmagazine.com/k12/article/2016/02/brief-history-evolution-classroom-technologies-infographic
Thank you for reading our analysis on Education Market Themes, Players, & Investors. Make sure to check out the 2016 edition of Opportunities In Vertical Software for the full report and we will be back in the new year with our next series of industry deep dives.
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