For those who see the recent rise of ed tech startups as a sign of a frothiness in the sector, this report could be yet more evidence that ed tech is getting over-inflated. Over the past few months, reports of a brewing bubble have swirled around the ed tech blogosphere, with some drawing parallels between the recent surge in ed tech companies and the dot com boom in 1999. Perhaps to nip that kind of talk in the bud, CB Insights headlined its report: “There is no ed tech bubble.”

Heightened funding in education technology is mirroring financing trends in the wider world of technology, the company said. About 70 percent of the deals were at the seed and Series A stage, meaning that ed tech startups will similarly face a “Series A crunch.” And CB Insights says that’s a healthy thing for the market. If too many of these emerging startups get follow-on funding, that could be a sign of a bubble. But, for now, they say, it’s just too early to tell.

According to the report, one-third of the funding last year went to just about ten companies — take a look at a list of them below.

1. Desire2Learn  – $80m

2. Open English – $43m

3. Lumos Labs – $31.5m

4. Echo360 – $31m

5. 2U – $26m

6. Chegg – $25m

7. Kaltura – $25m

8. Edmodo – $25m

9. The Minerva Project – $25m

10. Orbis Education – $24.33m

Regardless, you can be sure that 2013 will see even more investment in ed tech and the B-word will likely continue to surface. But as Audrey Watters over at HackEducation has argued before, asking whether there is a bubble in tech is a limiting question. What’s important about the new crop of ed tech companies isn’t just how much money they can raise but how much value they can generate — for students, teachers, schools and investors.

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The startup didn’t need the funding, said COO Andrew D’Souza, but given Felicis’ familiarity with education (it has also invested in startups Inkling and Piazza), they wanted to work with them.

“They know the space really well and mobile is a big focus for them as well,” he said. “We heard their vision for what higher education will look and we share a similar vision.”

As opposed to “clickers” that give professors just a basic way to gauge their students’ engagement, Top Hat lets teachers use the smartphones, laptops and tablets students already bring to class as complementary teaching tools. With the software, teachers can create in-class contests and competitions, as well as provide demonstrations and experiments. As students increasingly rely on mobile technology and web-enabled devices out of the classroom, Top Hat shows one way educators can put it to good use in the classroom.

In the past six months, its grown its team from 20 people to 70 and nearly doubled the number of colleges and universities using its platform to 285. About 90 percent of the colleges using its technology are in North America, with the majority based in the U.S.

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According to GE’s annual Innovation Barometer , it looks like that’s what they want. The report, which surveyed 3,000 C-suite executives in 25 countries and took their temperature on a range of issues affecting innovation and competition, found that business leaders highlighted education as one of their top policy concerns.

When asked about the most pressing priorities for governments to support innovation, they ranked improving education just above fighting bureaucracy and protecting IP. In particular, they indicated that schools should encourage more entrepreneurial cultures through partnerships with business savvy individuals and develop curricula that better prepares students for future jobs.

The survey also indicated that, globally, executives’ confidence in education systems had fallen an average of six points over last year, although the confidence of U.S. executives increased.

The report comes on the heels of a number of interesting U.S.-based efforts by business leaders, particularly those in technology, to support education. Microsoft backs the Philadelphia School of the Future and works with high school students in Seattle to teach them computer science.  Schools in Newark got a $100-million gift from Facebook CEO Mark Zuckerberg a few years ago. And, in New York, two new tech-focused schools launched this academic year supported by big business and local venture capitalists. The Academy for Software Engineering, for example, opened with the support of Union Square Venture’s Fred Wilson, as well as other local and industry leaders. And IBM jointly created the Pathways in Technology Early College High School (P-Tech), a six-year computer-science related high school that offers graduates the chance to apply for IBM jobs.

Corporate-sponsored education has its critics, who worry that students will get too steeped in the culture of business or won’t get pushed enough in critical thinking. Education observers also point out that past attempts haven’t always been successful — after launching in the early 1990s, New York’s Metropolitan Corporate Academy was eventually shut down after support from Goldman Sachs waned. But as the economy shifts and the demand for new skills rises, it’s important that business leaders step up to support the schools in their communities, as long as educators can keep their interests in check.

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That’s a lot of money for any company to raise – but especially for one that has been around for the past 17 years and profitable for the last 15.  It’s yet more evidence that the online learning sector is burning up — and it may signal that lynda.com is positioning itself for an IPO or acquisition by a company with deep pockets.

The company, started by husband and wife team (or rather, wife and husband team) Lynda Weinman and Bruce Heavin, was launched in 1995 to give professionals, students and hobbyists better tools – not just books and manuals – to learn computer skills. Over the years, it’s grown to include video-based courses on everything from how to use Adobe Photoshop and WordPress to how to lead productive meetings and become a thought leader.

In the past year or so, startups like Codecademy, Treehouse, LearnStreet, creativeLIVE and others have launched to help people learn programming, business and other skills online. But Weinman said that lynda.com’s new funding wasn’t motivated by the appearance of new rivals.

“We’re not taking this investment in reaction to competitors,” said Weinman. “We think this industry of online education is in its infancy and there will be lots of approaches. We’re very confident in our approach.”

And it has good reason for that confidence – in the last year, the company said it earned more than $100 million in revenues from subscription fees from individuals and enterprise clients, which include top Fortune 50 companies, universities and government agencies.

CEO Eric Robison emphasized that the company doesn’t need the funding but said the timing is right for the company to expand internationally, scale its web platform and move into new content areas.

The company could do that in-house – and it recently added a new CTO to get its expansion plans off the ground.  But, now it also has the resources to buy up other startups competing in the space.

As I’ve noted before, lynda.com has been relatively quiet while other upstarts have brought new approaches to learning to the web. But it looks like the company’s ready to make some noise.

“We’ve been very focused on running our business,” said Robison. “This is the year we get out there with more visibility.”

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Over the past couple of years, the Madison, Wisc.-based company said it has attracted more than 2.5 million students “from middle school to Med school,” who have shared more than 100 million notes across Web, iOS and Android apps. On Friday, the company said it raised $9 million in a Series A-1 financing round led by Great Oaks Venture Capital and including the Wisconsin Alumni Research Foundation (WARF) and other existing investors. The round follows a $3.6 million dollar Series A round in 2010 and brings the company’s total amount raised to $14.8 million.

Through the apps and website, students can upload the content they need to study and then review it on the go. The app tracks what the students get right and wrong but also surfaces other similar content on the platform. For example, if a student uploads material about the Pythagorean Theorem, StudyBlue’s algorithms search for other user-submitted content on the topic and then lets the student review it. Students can see who uploaded each piece of content and then message the author.

“Having to share, compare and debate is a big part of the learning experience,” said StudyBlue CEO Becky Splitt. “The funding is all about continuing to refine our ability to enhance our data and connect students to each other in the most effective way.” She added that the funding will also go towards helping the company scale its team across operations and product development.

Other companies compete with different parts of StudyBlue’s business – digital test prep startup BenchPrep and digital textbook startup Kno, for example, let students create digital flashcards, but  based on content from publishers; Cerego, an online memory management tool, enables students to create interactive notecards for studying any topic; and plenty of apps offer students discipline-specific, static study guides. But Splitt said only StudyBlue tries to give students a “digital backpack” that brings any content in their backpack to their phones.

For now, the company gives students a basic way to track their own progress and monitor their strengths and weaknesses. But Splitt said the company is exploring ways to further capitalize on its growing database. For students, it intends to roll out more guided learning plans that tailor content to students’ mastery level. And, for teachers, it’s looking into creating a dashboard that lets them follow students’ progress – although Splitt said the company knows it needs to tread lightly in this area.

“We’re walking that line very carefully because students see StudyBlue as their place – in college, in particular, [they] don’t want Big Brother watching over [them],” she said.

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On Tuesday, the social learning company said it had raised $20 million in a Series E round of funding – by far, it’s biggest yet – to bring its total amount raised to $44.7 million. Discovery Communications led the round in a strategic partnership that also includes shared technology, marketing distribution and promotion. Additionally, Summit Group participated in the round, as did previous investors Atlas Ventures, Benchmark Capital, Integral Capital Partners and GSV Capital Corp.

Since launching in 2007, Grockit has helped students study up for the SAT, GMAT and other standardized tests. But in in May, the company opened up to a broader audience with the launch of Learnist, a “Pinterest for education,” that lets users create so-called “learn boards.” The site continues to serve formal students with content that addresses U.S. Common Core standards for middle and high school (as well as test prep content at Grockit.com). But a quick tour of the Learnist.com homepage indicates an emphasis on featuring content for the lifelong learner interested in everything from unrest in Egypt to sports psychology to how to make the “ultimate PB&J.”

“We think of our audience as people who are curious,” said Roy Gilbert, CEO of Grockit. “We’re blurring the layer between things I need to learn in the classroom – common core [content] – and general nonfiction media. People are coming to the internet, not just to do differential equations but to learn about what’s going on in Syria.”

It makes sense that Grockit’s new focus on general enrichment (as well as formal education) caught the attention of Discovery, which has its own strong brand of info-tainment. Grockit didn’t share details on what the Discovery partnership could mean but Learnist could certainly be an interesting way for the company to bring its content to a new audience and vice versa.

Farbood Nivi, Grockit’s founder, said he wants Learnist to help turn learning into a casual, lifelong part of person’s daily routine. For example, while in line, instead of reading a short article or shopping online, he wants people to digest a brief learn board on the news of the day or U.S. history via Learnist’s app. That kind of on-the-go engagement is no doubt appealing to cable channel Discovery, which is clearly interested in new distribution outlets. This summer, it led a round in brain fitness game maker Lumosity and announced an investment in digital textbooks.

In addition to the funding, Grockit announced a redesign for Learnist that shifts its aesthetic from a Pinterest-like display to a look that more closely resembles traditional media sites.  It also displays authors names more clearly and more prominently features content from bigger names on the site, such as Bobby Chang, founder of In-Case, Clark Scheffy, founder of Ideo, and Eric Ries, the best selling author of The Lean Startup.

Since Learnist’s launch, Grockit’s user base has grown by 400 percent to hundreds of thousands of users and the average length of user sessions has doubled from 10 minutes to more than 20 minutes, the company said.

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Led by Satish Menon, former CTO of the Apollo Group (which owns for-profit education giant University of Phoenix), UV Labs will partner with universities and other higher education providers to build products addressing a range of issues, from accessibility to affordability to accountability. UV Labs, which will operate as an independent company, currently includes only Menon, the co-founder and CEO, but he said his first order of business is building out a team and focusing on a set of priorities.

Backed by German media company Bertelsmann, as well as the University of Texas Investment Management Company and other smaller partners, University Ventures has also invested in UniversityNow, an online learning site focused on making degrees more affordable; Synergis Education; and Ameritas College Educational Services, which offers degree programs targeting Hispanic Americans.

Menon acknowledged that UV Labs’ genesis is untraditional — usually entrepreneurs look for investments from venture funds, rather than start companies with them as partners. But he said he was drawn to the opportunity to combine his experience in education and technology with a company connected to global media and educational institutions.

As we’ve written about previously, investor and entrepreneur interest in education technology – at the higher ed and K-12 level — is soaring. But while many investors and founders feel that the way to disrupt industries is from the outside, Menon said a key thesis shared by University Ventures and UV Labs is that innovation is best undertaken from within. By partnering with universities as they build products, he said, they’ll be able to identify opportunity areas and get feedback and iterate faster.

Given that the company is only a few weeks old, Menon said, it’s too early to discuss specific products, but he added that a core principle for the company will be using data-driven services to bring efficiencies to the full range of higher education experiences, from a high school student looking at colleges to adults considering traditional and nontraditional continuing education programs.

“Whether the program you want to enroll in is the right one for you or if, while you’re in school, you want to make sure that a specific pathway is right for you, it’s all moving to more quantified approaches these days using data,” he said. “Our goal is understand that kind of data and move the entire process to a more effective plane than it is today.”

Image by Gts via Shutterstock. 

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In a conversation at the SIIA Ed Tech Business Forum, Luyen Chou, chief product officer for Pearson’s K-12 technology group, said that as new technology upends the textbook publishing industry, his company needs to become an “Electronic Arts for education.”

Clearly, Pearson and its rivals in education publishing need to reimagine their role as the rise of digital content cripples their business model. But look to Electronic Arts as a model?

Speaking with me later, Chou said that to keep up with the changing environment, traditional publishers can’t just digitize the static textbooks of the past, they need to excel at producing high-quality, interactive digital learning experiences and get them into the hands of students.

“[That includes] digital studios, animators, illustrators, producers, 3-D artists – we need to build that capacity within instructional companies like Pearson and we need the whole end-to-end supply chain to the take that from the studio to the actual users,” he said. “The folks that have done that well are the EAs of the world, digital studios. That’s not a core competency for companies like Pearson.”

Given the company’s wide reach across different corners of the market, from content to testing, at the K-12 and college levels and beyond, one of Pearson’s key assets is the massive amount of data it can use to target and personalize learning for students. And Chou acknowledged that the Electronic Arts parallel wasn’t meant to imply that Pearson only needs to focus on creating high-quality content, and not on other parts of its business.

“I take it for granted that we’re going to have a huge strategic advantage by way of the data we have on our customers, our students,” he said. “But you still have to serve up those compelling experiences. You can have the best data and the best algorithms in the world, but if what it ends up serving up is digitized versions of 2-D static content, it’s not going to sell either. We have to make sure that we’re complementing our data and platform with high-quality interactive learning content.” In getting to that goal, he said, it’s an open question whether the company will build or buy.

Interestingly, the SIIA ed tech conference itself took place at the McGraw-Hill Conference Center   in New York and several speakers commented on yesterday’s news that the publishing giant had sold off its education division to private equity firm Apollo Global Management.

But while McGraw-Hill chose to divest itself of its education arm, Pearson has taken the opposite approach, arming itself with even more education companies in recent years.

In the last twelve months alone, the company has spent $1.6 billion on acquisitions, according to Baran Rosen, president of media investment bank Whitestone Communications. And, given reports that Pearson is exploring the sale of the Financial Times, its push in education will likely only continue.

“They are going to really be a pure-play education company,” Rosen said at the SIIA conference. “That’s where they’re staking their future and they’re doing it in a big way.”

Image by Cindy Minear via Shutterstock.

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On Monday, at the Summit on Education in Correctional Facilities, convened by U.S. Secretary of Education Arne Duncan, education leaders are set to announce that New York-based Knewton and publisher Houghton Mifflin Harcourt will partner for a program to bring personalized math, language arts and other instruction to 3.5 million youth in the juvenile justice system.

“The goal is to help transition them to traditional schools and prepare them for the workforce,” said David Liu, Knewton’s COO.

Currently, less than 15 percent of students in juvenile secure settings ultimately finish high school or earn a high school equivalency degree.  The hope is that by combining Houghton Mifflin Harcourt’s SkillsTutor program with Knewton’s adaptive learning platform, the new initiative can give incarcerated youth, as well as those who attend correctional centers a few times a week, a better shot at success. Given their unique experiences and range of learning strengths and weaknesses, the youth in the program could be especially well served by targeted, differentiated instruction, education officials said.

To date, most of the nearly half a million students to use Knewton’s program have been at the college level. But Liu said this partnership will help it begin to scale its K-12 instruction. One of the interesting challenges for Knewton and Houghton Mifflin Harcourt will be to deliver the content in a voice that’s appropriate for the students.

“It’s not just enough to provide third grade- or fourth grade-level content, you have to speak to a 15- or 16-year-old,” Liu said.

As evidence of its success, Knewton said that in a program of 2,000 remedial math students at Arizona State University, withdrawal rates dropped by 56 percent and pass rates climbed 11 percent.

The company has raised about $54 million from investors including Accel Partners, Bessemer Venture Partners, First Round Capital and Founders Fund.

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For the past several years, more traditional brick and mortar schools have provided parts of their instruction and assessment online – and they’ve increasingly adopted high-tech tools to deter cheating. But in the last year in particular, attention on online education has surged with the growth of new internet-only educational programs like Coursera, Udacity, edX, 2U and others. And as they strengthen ties with traditional universities and raise the stakes with credit-bearing courses, ensuring their courses have integrity is essential.

This week, for example, in announcing that several of its courses will undergo an evaluation to determine whether they should be eligible for college credit, Coursera said it plans to use remote proctoring technologies to verify a student’s identity and help them prove that their coursework is authentic. Udacity and edX have partnered with Pearson’s testing centers so that students can take tests offline in the presence of a proctor, but edX has said it’s also exploring other ways of thwarting online cheating.

No technology is going to be 100 percent foolproof, but here are five high-tech tools digital learning platforms can use to keep their students honest.

Remote live proctoring

Kind of like Skype, but for exam monitoring, services like ProctorCam, ProctorU and Remote Proctor Now (from SoftwareSecure) use basic computer web cams to enable human proctors to watch students remotely as they complete exams. Using the services’ software, part-time proctors (who are sometimes students themselves) can monitor several students at a time using split screens. Proctor-to-student ratios are often higher than they might be in real-world settings because proctors are limited by the size of their computer screens. For now, it’s mostly traditional universities who use these services to prevent cheating on online exams. But this is one option Coursera and other digital-only platforms could turn to bolster the integrity of their courses.

Remote web proctoring

The other flavor of remote proctoring also uses computer webcams, but doesn’t rely on humans. This service, which is offered by McGraw-Hill’s Tegrity division, Kryterion and others, simply uses the webcam to record students during an exam. Professors or others can review the footage later (or only in cases where they suspect cheating). McGraw-Hill said the service isn’t just used by colleges and universities for exams, but also for group projects, quizzes or other exercises, to give professors extra windows into a student’s learning.

Browser lockdowns

For online test takers, it can be tempting to Google an answer or ask a friend for help via IM. But along with webcam monitoring, many schools work with services, such as Respondus, that lock down browsers so that students can only see the screens necessary for completing the test. Once students launch the assessment screen, the program blocks them from switching to other applications and prevents messaging, screen-sharing and other communication programs from running. Students could get around it by looking at other computers or talking to other people nearby, but paired with webcam monitoring many see it as an effective option.

Keystroke pattern recognition software

One of the options edX has said it’s looking into — keystroke monitoring software — observes each student’s typing style to authenticate identity. Researchers at Pace University, for example, said they can accurately confirm the identity of a test taker in 99.5 percent of cases by analyzing patterns of keyboard pressure. As with browser lockdowns, this technology on its own isn’t fail-safe as students could still be receiving answers from people near them or via telephone. But Kryterion, for example, offers this technology as part of a suite of online proctoring tools.

Plagiarism detection software

Many brick and mortar high schools and universities use scanning software to detect content lifted from other sources. But online education platforms are starting to adopt it as well. 2U, which partners with leading universities for high-quality masters degrees and this week announced an undergraduate program with a consortium of institutions, uses Turnitin to monitor student work. And this summer, after dozens of reported plagiarism incidents on its platform, Coursera said it was looking into using plagiarism detection software. Turnitin (from iParadigms), which said it processed more than 60 million academic papers last year, is the leading service in the field. But PlagiarismDetect and VIPER provide similar services.

Image from chalabala via Shutterstock. 

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