Believe it or not, there are innovations in higher education beyond the headline-grabbing MOOCs that have soaked up so many investment dollars in recent years.
And now those non-MOOCs may get some funding, too.
Today, New York City-based University Ventures announced a $5 million seed fund for investing in startups focused on serving the higher education industry, particularly around “needs that colleges and universities have around connecting students with employment,” says Ryan Craig, managing director of University Ventures.
Along with unveiling the fund, University Ventures said it’s already invested in four companies:
- CampusLogic, which helps colleges manage the financial aid process;
- Entangled Ventures, a “studio” founded by Paul Freedman that connects universities with startups (one of which recently merged with ApprenNet);
- ProSky, a training platform for specific skills in demand from employers;
- Portfolium, which allows students to showcase digital portfolios to potential employers.
Craig expects some of these tools will help students prepare for jobs through on-demand, competency-based training; others promise to lower operations costs for colleges and universities.
Other than CampusLogic’s $4.1 million round, no funding details for other deals have been publicly disclosed. Craig declined to shed light, or share how much of the seed fund has been invested in these startups. He tells EdSurge “we’re looking to have a total of 10 to 20 companies within the next two years.” This fund, he adds, will “not lead deals but participate as strategic investors.”
University Ventures started in 2012 as a $100 million investment fund supported by German media conglomerate Bertelsmann AG and the University of Texas Investment Management Company. In 2014, the group raised a fresh $136 million fund, which has not been publicly disclosed until now. The money from this seed fund comes from this second pot, which University Ventures can tap if they want to make follow-on investments.
Among the more than 10 companies in the University Ventures portfolio are UniversityNow, Galvanize, and Qubed, which has partnered with the likes of Wired and Parsons School of Design for online programs in design and fashion. These investments are education service providers (as opposed to tools and apps) and involve bigger dollar amounts, such as UniversityNow’s $17.3 million Series B round.
While much has been made about the “disruption” looming for colleges and universities at the hands of MOOCs, Craig believes the institution will remain—but only after “treating students like customers and reducing their overhead costs.”
Craig doesn’t mince words; he’s compared MOOC hype to the short-lived Spice Girls mania of the mid-90’s. He writes: “...in two years, MOOCs have gone from the most important development in higher education in a generation to trying to remain relevant by linking up with the more substantive success of online education.”
But all’s not lost, he adds: “...by quoting ‘zigazig ha!’ [from the Spice Girls song] I really really may have achieved my purpose here on earth.”
