I’m excited to share what we’ve been working on since February. It’s called Reach and it’s a new education technology fund focused on access and opportunity. Before describing Reach in more detail, let me share some background with you.
Back in 2006, Wayee Chu and I began collaborating at NewSchools Venture Fund. Wayee started an accelerator and I began investing in education technology startups. My first investment was BetterLesson, a company which addresses a challenge that I had faced as a teacher: sharing lessons more effectively. BetterLesson, now partnered with the NEA teachers union, is the go-to source for teacher lesson plans and I still sit on their Board.
Fast forward to 2011, Wayee and I launched the NewSchools Seed Fund in Palo Alto with our first three investments in Learnzillion, Goalbook and Engrade. All three companies are thriving and Engrade was acquired by McGraw-Hill last year. After investing in 39 for-profit and 4 nonprofit companies, we learned a valuable lesson: nothing is more important to the educational growth of a child than a loving parent and an inspiring teacher. Technology can be a powerful tool to support those relationships.
When technology tools are used effectively, incredible things can happen. These tools can save a child years of frustration by catching dyslexia early, give busy parents a window into their child’s classroom, and enable struggling readers to participate in a class discussion without stigmatization.
The stakes are too high not to get edtech right. At its worst, technology spending in education can drain precious time and money from our educational system and work counter to the relationships that are critical for a child’s success. At its best, edtech can produce life changing outcomes. One tool, Nepris, inspired a student in a small West Texas town to pursue engineering after video-conferencing with a senior systems engineer at Texas Instruments. Another tool Newsela, inspired a class in Allentown, Pennsylvania to procure a robotic hand for their teacher who had lost hers in a manufacturing accident. In both examples technology platforms (Nepris & Newsela) exposed children to new people and ideas. Such exposure is life-changing at any age, but is especially critical in the formative years when children are still developing mental frameworks around how the world works.
The NewSchools Seed Fund made its last investment in February of 2015. Over three years, the Seed Fund invested $9M and catalyzed an additional $100 million through direct introductions to other investors. The Seed Fund was fortunate to have donors who believed in its mission including its anchor funders: the Michael and Susan Dell Foundation, The Bill and Melinda Gates Foundation, The JK and Katherine Albertson’s Foundation, The Sobrato Foundation and NewSchools. They enabled the launch of the Seed Fund and without them, I am certain the edtech ecosystem would not be as robust as it is today.
The Seed Fund portfolio has proven that we can invest successfully in scalable, high growth edtech companies that prioritize social impact. Goalbook, our first investment, is now training 8,000 teachers across 450 school districts including Houston, Chicago, LA and Washington DC. Over 60% of Goalbook students are eligible for free/reduced lunch. Other portfolio companies went on to attract traditional venture capital for their Series A and B rounds from Trinity, Bessemer, NEA, Horizon, Felicis, Relay, DCM, Softbank, Storm, and others.
As seed investors, we have been lucky to have a front row seat at the edge of edtech innovation. This perspective has reinforced our conviction that impact-focused investment capital is a powerful lever for change in education. However, as the NewSchools Seed portfolio companies have grown, we wanted to stay with them, as investors, board directors and advisors. We felt a tension, primarily of time, to seed new startups while supporting the growth of the existing portfolio.
With support from the NewSchools Board of Directors, NewSchools and the Seed management team have launched a joint venture called NewSchools Capital. Its first fund, Reach, will enable us to continue our involvement with successful portfolio companies.
With Reach, we embrace our impact focus and reject the notion that investing is binary. Like the NewSchools Seed Fund, Reach will seek out those places where technology can uniquely address challenges in K-12 education. We will invest in businesses which fall within our existing theses as well as entrepreneurs pursuing breakthrough ideas and we will continue to invest at early stages where we believe our team can offer the most support. NewSchools Venture Fund has existed for 16 years and we aim to be another arrow in their quiver to further the mission.
So far, Reach has made three investments. We led serial entrepreneur and Rocketship founder John Danner’s seed round in Zeal and followed on our seed investment in Nearpod’s Series A. We also participated in eSpark’s B round of financing. Zeal, Nearpod and eSpark help teachers differentiate instruction.
The K-12 investment infrastructure is more organized than ever and the spirit of collaboration amongst the investors is amazing. Each fund brings a unique set of supports and expertise to the space and we’ve pooled our collective resources to help startups grow. We’ve been fortunate to co-invest with the following six funds:
Kapor Capital — 12 investments
Rethink Education — 6 investments
Learn Capital –8 investments
Owl Ventures — 4 investments
LearnLaunch — 2 investments
We are excited about the opportunities we see in the edtech space and look forward to your support as we launch Reach. More at www.reachcap.com
With warm regards,
Jennifer, Shauntel, Wayee, Esteban, Jim, Ari, Diana