'Clever' Edtech Deal

column | Financing

'Clever' Edtech Deal

Startup wins $3 million in seed financing for building APIs for schools

Oct 22, 2012

Education technology startup, Clever, said today it has clinched a $3-million seed round with top investors including Google, Ashton Kutcher, Mitch Kapor and long-time education financier, Deborah Quazzo, CEO of GSV Advisors. That's a hefty round for edtech startups, which more typically raise seed rounds under a million dollars.

Even more compelling, however is that 2,000 schools have embraced Clever since it debuted in late May in four schools.

Clever, which got its start at Y Combinator, aims to solve one of the gnarly problems that plagues just about every school: how to move student data into any of the applications bubbling out of the high-tech community and how to ensure that the data is accurate and current. It does this by building APIs to connect independent software applications to a school's Student Information System. "We're putting schools in control of their data and making it easier to share it when they choose to," says Tyler Bosmeny, Clever's co-founder and chief executive.

It's got competition. In July, LearnSprout, which was hatched in the edtech incubator, Imagine K12, said it had raised an undisclosed amount of funding from investors including Andreessen Horowitz, Formation 8 (headed by the co-founder of Palantir), Benjamin Ling, Philip Fung, Luke Shepard, and others. LearnSprout has said that its software is used in more than 200 schools and is "growing nicely."

Connecting with schools' student information systems is no small technology feat, in part because schools use a smorgasbord of about 100 systems. Clever and LearnSprout started by connecting with widely used systems, such as Pearson's PowerSchool. Both companies say their software now can now connect with about 70% of the K-12 schools in the U.S.

Both Clever and LearnSprout offer their products free to schools--but they have figured out who will foot the bill: other education technology software companies.

It's a business model that--at least so far--pleases both schools and other software makers. And that's because it’s the kind of technological plumbing that may make it possible to achieve the highly vaunted goal of "individualized" or "personalized" learning.

Particularly in schools where teachers may work with more than a hundred students over the course of a day, the concept of individualizing instruction involves carefully gauging what students know, how well they're absorbing new ideas or information, and then figuring out what they need to know to achieve proficiency or mastery of a topic. That means that just about every freshly minted software product--whether it provides digital curriculum or manages a teacher's grade book--promises to provide analytics on student performance.

But before a teacher can use such programs, someone--either the teacher or a technology specialist--has to get the names of all the students into the new program. Worse: someone has to make sure that once the student data is entered, it stays current and accurate, even when students change classes or schools, or else the data is stranded.

Chris Liang-Vergara, director of instructional technology at FirstLine Schools in New Orleans, says updating student data can soak up "hours a week," particularly early in the school year. "Updating that kind of information is a pain in the neck," agrees Lynzi Ziegenhagen, vice president of technology for Oakland-based Aspire Public Schools and also co-founder of Schoolzilla, a data-management company spun out of Aspire. Both confirm that using Clever's software has been "literally" a five-minute operation.

More fundamentally, too many software products are designed as if they're the only product a school will use, Ziegenhagan notes. That can wind up overwhelming teachers or IT administrators with a hodgepodge of analytics and data, none of which interact. She sees Clever as working like glue.

Because a teacher or IT administrator can precisely designate what data is shared with whom, Clever makes it possible for a teacher to run short--and realistic--trials to determine whether a software product might be effective in his or her class.

Clever, based in San Francisco, was founded by Dan Carroll, Tyler Bosmeny and Rafael Garcia, three former Harvard classmates. Carroll joined Teach For America; after two years, he became head of technology systems at West Denver Prep. Time and again, he had been frustrated by the difficulty of managing student data. He tapped Garcia, who had been working in Chicago on commodities trading, specializing in machine learning and working with large volumes of data to build the API.

Bosmeny, who had been running sales at startup, PaperG, joined the trio to help run the business. In June, they wooed Matt Pasternak, another former TFA'er, away from high-profile edtech startup, Junyo, to jumpstart relationships with more schools companies, Clever's board consists of its three cofounders. Other investors in this seed round include: John Katzman (founder of the Princeton Review, 2U and Noodle); Aayush Phumbhra (founder of Chegg); Matt MacInnis (CEO of Inkling); Y Combinator as well as its partners (Jessica Livingston, Sam Altman, Harj Taggar, Garry Tan, Paul Buchheit and Aaron Iba); SV Angels; Mike Maples; Jeff Clavier and Bessemer.

Clever currently has partnerships with 40 companies, including math curriculum company, DreamBox and MasteryConnect, which delivers assessment tools. For them, Clever has dramatically speeded up the once onerous task of connecting to schools' data systems. Liang-Vergara says that he's seen software vendors' eyes light up when he asks if they will use Clever's API to connect to his school's data. "They say, 'That's an easy step for us,'" and it works, he says. Vendors have been asking him to verify that Clever is sending them accurate data--and so far, he says, it's been checking out. And when partners use Clever's software to connect with schools, they in turn, share a slice of the revenue they make with Clever.

"There's no greater challenge that a young software company faces that selling into schools," says Deborah Quazzo, chief executive of GSV Advisors. "Selling into the schools and districts via partners [with other software companies] is very smart," she says.

Editor's note: Investors included: SV Angel, Mike Maples of Floodgate, SoftTech VC’s Jeff Clavier, Google Ventures (Kevin Rose), Bessemer Venture Partners, Mitch Kapor, Ben Parr, Ashton Kutcher, John Katzman (The Princeton Review, 2tor and Noodle) Matt MacInnis (Inkling), Aayush Phumbhra (Chegg), and Deborah Quazzo (GSV Advisors) and Laurene Powell Jobs (Emerson).

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