If numbers alone told the story, you would think these were boom times for education technology start-ups.
There are more than 3,900 math and reading apps, classroom management systems and other software services for schools in the United States. It is an impressive amount, but the money going into those start-ups tell a different story.
Venture and equity financing for ed tech start-ups worldwide was $2.98 billion last year, up from about $1.87 billion in 2014, according to a report from the research firm CB Insights. But the bulk of that money went to a handful of investments worth more than $100 million, and none of those big investments went to companies focused on public schools in the United States. Early signs are that raising money could be a lot more challenging this year.
So where is the money going? Companies focused on corporate training or professional skills, like teaching computer programming languages to adults, have an easier time generating revenue. Likewise, they’re more likely to receive funding.
“A very simple explanation is: In corporate, they have money,” said Josh Coates, chief executive of Instructure, an ed tech company.