ACT’s Latest Act: Investing in an Open-Source Assessment Startup


ACT’s Latest Act: Investing in an Open-Source Assessment Startup

By Tony Wan     Sep 5, 2018

ACT’s Latest Act: Investing in an Open-Source Assessment Startup

ACT, the nonprofit best known for its college-readiness test, is undergoing a major transformation. Ever since taking the helm as CEO in 2015, Marten Roorda says ACT has closed 10 deals in which it has invested in, acquired or formed strategic partnerships with educational companies.

Its latest act: making a strategic investment in Open Assessment Technologies (OAT), a San Francisco-based startup that offers open-source tools for building and delivering digital tests. Financial terms of the deal were not disclosed, although Roorda said the investment is more than $1 million.

“Besides just being an assessment company, we’re also becoming a learning and navigation company,” Roorda tells EdSurge in an interview. “That requires data and data analytics, and we are building our own internal capabilities. But we can also accelerate our transformation through [mergers and acquisitions] and investments.”

In OAT, Roorda sees not just an opportunity to support an existing platform that ACT uses, but he also envisions ways to leverage OAT’s tools to “connect measurement with educational research in ways that help make the best recommendations for teachers and students.”

OAT traces its origins to the Luxembourg Institute of Science and Technology, which helped design and deliver the PISA assessments. (These tests are given every 3 years and are commonly used to benchmark how countries fare against one another in terms of their students’ educational attainment.) In 2013, nine people left the institute to start OAT.

The company offers a suite of tools used to create, deliver and generate reports from digital assessments. Its main offering is TAO, an open-source platform that anyone can download for free to create and deliver tests. For a fee, the company will also offer custom content development services, cloud-based hosting and delivery and support and maintenance.

The vision behind TAO was to create an open-source assessment platform that works with different content authoring, delivery and reporting tools, says Marc Oswald, co-founder and CEO of OAT. When it comes to digital assessments, he argues, “there are all these platforms and algorithms that are proprietary and incompatible—so why not break up these silos?”

To illustrate the problem, Oswald says districts and other educational organizations build custom testing content using one authoring and delivery platform. But each platform might use its own proprietary data format that is incompatible with others. This essentially creates a “lock-in” effect, where content that would work on one assessment platform will not work on another. “Our focus is to break this legacy approach to assessments,” Oswald tells EdSurge in an interview.

TAO is built based on QTI (short for “Question and Test Interoperability”), a data standard that enables assessment content and data to work across different testing platforms, item banks, delivery systems and reporting tools. QTI was created by the IMS Global Learning Consortium, a nonprofit group of education technology developers that maintains standards for how educational data can be captured and shared.

For test takers, TAO aims to make testing interfaces to look and function the same across different assessment platforms. For instructors, the goal is to allow those tests to be scored and reported in a consistent way.

Today, Oswald claims OAT is “generating millions in annual revenue” from dozens of customers. They include publishers, K-12 districts, higher-ed institutions, publishers and professional certification organizations. Among them: the New York City of Department of Education, Elsevier, the University of Massachusetts Amherst and PARCC, the organization involved in delivering Common Core assessments. The company also has contracts with ministries of education in Brazil, France, Italy, Japan, Portugal and the U.K.

Then there’s the ACT, which currently uses TAO to build and deliver its WorkKeys assessment. ACT says ten of thousands of employers across the world use WorkKeys to measure workforce readiness skills. Roorda says his team will explore opportunities to use TAO for ACT’s other products and services, but “those plans are not substantiated yet.”

The deal marks ACT’s third investment since 2017. Last year the Iowa City-based nonprofit invested $10.5 million in New Markets Venture Partners, a Maryland-based venture capital firm that funds education technology startups. In February 2018, ACT invested $7.5 million in Smart Sparrow, an Australian developer of adaptive courseware tools used in colleges and universities.

In the past three years, ACT has also acquired OpenEd, Pacific Metrics Corporation, ProExam and the National Research Center for College and University Admissions.

The breadth of these investments, Roorda says, is a sign that ACT should no longer be viewed as just a college-admissions test (or, specifically, the SAT alternative). The nonprofit’s bets across a range of digital technologies, from adaptive learning to formative assessments, means that it is also closely watching other markets and companies including Knewton and Renaissance Learning.

Roorda and Oswald both say open-source technologies will play an integral role in the future of education. “A closed market doesn’t grow,” says Oswald. “You need open standards for everyone to benefit.”

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