How a $40M Investment Aims to ‘Mainstream and Modernize’ Montessori...


How a $40M Investment Aims to ‘Mainstream and Modernize’ Montessori Education

By Tony Wan     Jan 20, 2021

How a $40M Investment Aims to ‘Mainstream and Modernize’ Montessori Education

This story is part of an EdSurge Research series about early childhood education.

There is a certain mystique to the Montessori world, which is just as much philosophy as it is pedagogy. For starters, it has its own vocabulary. (The schools have “guides,” not teachers, and there are specialized training programs to become one.) It’s inspired its own set of toys and physical manipulatives. And about 90 percent of the roughly 5,000 U.S. Montessori schools are private, according to estimates from the American Montessori Society.

No wonder, then, that “Montessori education is often seen as niche and elitist,” says Joel Mendes, executive director of Prepared Montessorian, a program that provides training to teachers and parents in Montessori methods.

Yet despite that esoteric reputation, Montessori methods aspire to similar outcomes as many others in education: to help children develop agency and independence, often through hands-on learning and open-ended, collaborative activities.

Since 2016, a California company has set out to make Montessori mainstream through building and acquiring a network of schools and technologies, and offering professional development programs to prepare future Montessori teachers and leaders. It’s a grand vision—and one that has recently secured big funding from leading education investors.

Higher Ground Education has raised $40 million in a Series C funding round led by Venn Growth Partners, a Toronto-based growth equity fund that invests in consumer, education and healthcare industries. Other backers include Learn Capital and Peak State Ventures, both education investment firms that previously backed the company. To date, the Lake Forest, Calif.-based company has raised $70 million in venture capital.

The vision, according to Higher Ground Education’s CEO Ray Girn, is to “mainstream and modernize Montessori education through extending its principles across infancy and into high schools.”

That translates into a broad suite of schools and services, starting with Guidepost Montessori, a network of early-childhood centers and elementary schools. There’s a counterpart for middle and high schools, called Academy of Thought and Industry. Combined, they account for 80 schools across the U.S. and China, serving roughly 7,000 students. About two-thirds of them serve infants through preschoolers, and the rest are K-12, according to Girn. Tuition varies from $800 to $3,000 per month, depending on age and location.

Other sources of revenue for the company include teacher training and certification offered through Prepared Montessorian, the aforementioned program led by Mendes, which ranges in cost from $99 for a short online course to $7,500 for a fully accredited program. For parents, Higher Ground offers a subscription costing $100 to $200 per month that provides access to its digital curriculum and ships physical toys and Montessori kits for use at home.

Providing all of these services means fielding a staff of central-office employees, along with school leaders, teachers, assistants and professional nannies, altogether numbering over 2,000. That number will only grow as Higher Ground aims to open another 40 new schools every year across the U.S.

The goal, says Girn, is to “provide end-to-end Montessori education, whether you’re a student, a stay-at-home parent or a teacher. We’re trying to be the village that helps the adults raising the child.”

Girn started his Montessori career in 2003 as a math and science teacher at LePort Schools, then a chain of three Montessori schools in southern California. He climbed up the ladder and became its CEO in 2009. By the time he left to start Higher Ground seven years later, that network grew to 20 schools, largely through acquisitions.

That experience would come in handy. About a quarter of Higher Ground’s 80 schools have come through buying programs, many of which are in financial distress. These include four “microschools” that were sold in 2019 by AltSchool, a much-hyped education technology startup that raised nearly $200 million but has since downsized and rebranded.

Capitalizing on such opportunities is part of the playbook. “The schools we acquire are usually not profitable and need investment,” says Girn. “We don’t typically acquire schools that are stable and healthy. If a school is going to close, we’d love to pick it up.”

In this way, Higher Ground operates like a turnaround business, picking up distressed assets and putting in place a sustainable operational model. The company provides the tools and processes for managing HR, marketing and other administrative functions required to run a school. It also provides teacher training and the physical materials used in classrooms.

“Having these central support systems is really important,” says Carolyn Burns, the head of school at Guidepost Montessori in Scottsdale, Ariz., which serves children as young as 18 months. “You can run a really high-quality program, but if you don’t know how to get the word out and get enrollment, you’ll struggle.”

While providing a common set of backend services, Higher Ground allows for each school to operate with some autonomy, Burns adds. Prior to her current school, she served in a similar role for Guidepost Palo Alto, in the heart of Silicon Valley (which was converted from an AltSchool microschool, where she also taught). “Every campus has its own personality, serving very different school communities and families and demographics,” she notes.

The Montessori market, especially at the preschool level, is fragmented in the sense that many schools are run by individual owner-operators, according to Mendes. “Very often what happens is that these owners retire and sell to someone who doesn’t understand the Montessori model or how to run the business, and that’s where the financial troubles come in,” he says.

In 2020, Higher Ground added 27 campuses to its network of schools. Other acquisition targets may well emerge, as the pandemic has only compounded the financial stress for child care providers across the board, who were already running on razor-thin margins before the crisis. Girn says Higher Ground has yet to close a school, even amid a raging pandemic.

On the whole, the company is currently not profitable. A handful of schools are turning a profit, which Girn says takes about three years to achieve.

Higher Ground is not alone in its quest to expand Montessori schools. In fact, it may be overshadowed by a much better-funded effort led by one of the richest people in the world: Jeff Bezos, who has invested $2 billion in a nonprofit to launch its own network of Montessori preschools. The first “Bezos Academy,” as it is called, opened last October south of Seattle.

Building a Montessori Tech Infrastructure

Expanding the number of Montessori schools is part of the battle; Higher Ground also needs to staff them. Even though there are just roughly 5,000 Montessori schools across the country, there is a shortage of educators with the training and credentials required.

“Finding a Montessori teacher is not easy,” says Pari Schacht, the founder of Mission Montessori in San Francisco, which serves children from 12 weeks to sixth grade.

Each Montessori class is led by a certified lead guide who is supported by several assistants. For assistants to make the jump, they must be accredited. The problem, Schacht notes, is the time and cost it takes to earn that credential.

Courses offered by one of the two leading accrediting organizations—the American Montessori Society and the Association Montessori Internationale—generally cost upward of $10,000 and require an aspiring candidate to enroll for a full year or three consecutive summers. For many assistants, who in most states make just a little above minimum wage, it’s a big time commitment and a financial burden.

Through its Prepared Montessorian program, Higher Ground Education offers its accredited course, which offers a diploma recognized by MACTE, the national accreditation council, available for free to all teachers in its network. Those outside its network can also pay $5,000 to $7,500 to take the course, which can be completed mostly online and in 12 to 18 months, at one’s own pace.

In total, about 600 educators are currently working their way through the program, according to Mendes. Schacht credits it for helping “us have more trained teachers and also helps us give a career path to our assistant teachers who want to learn, grow and develop their career.”

Higher Ground also recently acquired the learning management system developed by AltSchool, which it already uses to house its teacher-training content. The goal is to make it the digital hub for all of the resources used by parents and nannies.

The company is currently conducting a pilot to license its curriculum to other Montessori schools for a monthly fee, Girn adds. It’s a small step toward a grander vision “to offer all the curriculum, training and infrastructure we create to public and private school partners” in the future, he says.

Technology is by no means foreign to Montessori schools (if kid-tracking sensors are any indication), and Girn believes it will be essential to expanding awareness, adoption and teacher preparation for the movement.

“Many companies in edtech take the Netflix approach. They first build the underlying tech platform, then realize content is king and then build their own development studios,” says Girn. By contrast, he adds, Higher Ground “started with schools and content, and now we’re extending their reach through expanding our tech infrastructure.”

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