In response to Tom Vander Ark’s recent posting on New York as an EdTech Hotspot (second only to the Bay Area), I wanted to counter that, in fact, New York can only rank as high as the third “most prolific EdTech hotpot on the planet.” For over a generation now, Chicago has served as the epicenter of for-profit, technology-enabled education entrepreneurship and investment.
While we tend to be humble out here in “Flyover land,” our memories run long and we would highlight our region’s 80 year history of education industry innovation spanning the advent of career and correspondence schools, the dawn of online learning (50 years ago), the creation of the very first MOOC (10 years before there was such a silly term), and the unprecendented scale built up by its “School as a Service” players today.
So, following the format of Vander Ark’s Education Week posting, here is a quick, in-process line-by-line counter (please feel free to add-on!):
- Post-Secondary: Chicago boasts 3 of the 5 largest players in post-secondary education, including DeVry, Career Education Corp, and ITT (Carmel, IN) — and its a perfect 5 out of 5, if you include the local executive presence of Apollo Group and Kaplan (which should be permissible if Vander Ark can include Pearson under New York).
- K-12: The broader Midwest boasts 2 of the largest players in K-12 education technology in Plato Learning and Renaissance Learning, not to mention Chicago’s own Edline (now Blackboard).
- SaaS: Chicago features 2 of the largest EdTech plays of the past decade in EmbanetCompass and Deltak, which both just achieved impressive exits valued at 5x revenue — and with All Campus, Orbis Education and Everspring, we are home to every one of the leading “School as a Service” players (excluding those with a “2″ in their name).
- Text Books: I have to tip my hat to New York and their range of publishers (e.g. McGraw-Hill, Scholastic, MacMillan, Wiley & Sons), but Chicago can counter with the Anglophone World’s two remaining encyclopedias Encyclopaedia Britannica and World Book, both of which are experiencing strong traction selling curriculum and research products to school districts and libraries.
- e-Texts: Rivaling both New York and the Bay Area, Chicago and the Midwest feature a diverse range of companies leading the education industry’s move to digital course materials, including BenchPrep, Courseload, EdMap and VLinks.
- Retail: Our region also features two of the largest educational retail businesses in the world in Follets and Jostens (Minneapolis).
- School as Service: as noted above, and beyond the impressively scaled successes at EmbanetCompass and Deltak, Chicago also features dynamic new start-ups All Campus, Everspring and Orbis (Indianapolis).
- Open Learning / Badges: Chicago is the home of three of the winners from the MacArthur Foundation’s Digital Media and Learning Competition including our good friends at MentorMob, Youtopia and Better.at.
- K-12 EdTech: With too many to mention, we at Educelerate are particularly proud of our homegrown start-ups at eSpark Learning, Wowzers, Collaborative Learning, SchoolTown, ThinkCerca, and SkateKids.
- Coding Academies: While the Bay Area has Codecademy, Chicago has the original Code Academy, recently rebranded as Starter League.
- Tutor Marketplaces: In addition to the adjacent market leader SitterCity, Chicago also features the first and still biggest marketplace for finding tutors WyzAnt.
- Adaptive Learning: Any list of past or present EdTech entrepreneurs would be remiss in not mentioning Karan Goel, the founder of the first adaptive learning platform PrepMe, who is now hard at work on his latest venture.
Investors and Bankers
- Venture Capital: Chicago-based funds have completed over 15 venture investments in the education market and represent over $1.5bn in combined assets under management. Leading players include OCA, First Analysis, MK Capital, Chrysalis (Louisville, KY) and Baird Ventures.
- Private Equity: Chicago and Midwest funds have completed over 30 private equity investments in the education market and represent over $8.5bn in assets under management. While Vander Ark cited NY’s well-experienced vocational college investors at Quad Partners, I would counter that no geography features more such experienced investors as right here with Sterling, Riverside, Chicago Growth, HCP, Prairie, Prospect, Concentric, and many more.
- Angels: With several generations of education industry entrepreneurial success, Chicago boasts several skilled angel investors including one of the industry’s forefathers Jack Larson (founder of Career Education and current angel investor in 2U, Straighterline, and Triumph Education), Bob King (founder / investor of NetG, Collegis, Deltak, and Rasmussen College), Michael Markovitz (founder of Argosy Education and current investor in All Campus, etc.).
- Bulge Bracket Bankers: Chicago features Wall Street’s leading industry bankers Adam Nordin and Jason Williams at Barclays as well as much of the teams at Baird, BMO and Credit Suisse.
- Boutiques: While I am more than a little biased, we at Educated Ventures have had some strong client successes since our founding at the start of the year.
Foundations: Chicago and the Great Lakes feature the following foundations with education focused missions:
- Joyce Foundation: teacher quality, early reading, innovation
- Kresge Foundation: pathways to and through college, strengthening education, higher education productivity
- Lumina Foundation: college participation and graduation
- MacArthur Foundation: digital media & learning, and more
- Susan Crown Exchange: digital learning, including gaps in resources, information and infrastructure
- Wallace Foundation: school leadership, after school, summer and extended time learning and arts education
There is no question that New York and Boston feature several large, legacy publishing businesses, some of which have still managed to stave off bankruptcy. But while Chicago’s EdTech scene does not receive the same media attention, we are solving very real issues of educational access while gaining real scale. And with Educelerate, we hope to play a part in the further growth of this entrepreneurial education ecosystem.
Oh, and by the way, that very first MOOC mentioned above was UNext, a venture that over 1998 to 2001 raised upwards of $150 million from Michael Milken and Larry Ellison to create online courses with such leading global institutions as Stanford University, the University of Chicago, Columbia University and the London School of Economics. While the venture was perhaps ahead of its time, it did help to further seed the local market with entrepreneurs, managers and technology.
Note, Educated Ventures, and its related entities Educated Advisors and Educated Capital, have several current and pending clients and investments amongst the above cited companies.