2tor Raises $32.5 Million Series C To Make Online Education Great

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“One reason online education isn’t that good is I don’t think it is trying to be that good,” says John Katzman, the CEO of 2tor, an online education startup that is trying to break that mold. The company, headquartered in New York City’s Chelsea Piers, just raised a $32.5 million series C financing, led by Bessemer Venture Partners. All of its existing investors—Highland Capital, Redpoint, Novak Biddle, City Light—re-upped. Since it was founded in 2008, 2Tor has raised a total of $65 million.

Instead of focussing on low-hanging fruit like test prep or actual tutoring, 2tor is going straight after the higher education market, partnering with graduate programs to provide the technology platform to extend their classes online. (Not that there is anything wrong with test prep—Katzman previously founded the Princeton Review). Its first partner school is USC, which uses 2tor for both its Masters in Teaching and Social Work programs. Next week, it launches a nursing program with Georgetown and in July an MBA program at UNC-Chapel Hill. The new capital will help 2tor expand to more programs faster.

To give you an idea of the impact 2tor can have on a school, USC’s Masters of Teaching program had about 80 students before partnering with 2tor, and all of them were on its California campus. Now it boasts almost 1,500 students enrolled in the program across 45 states and 28 countries. They all pay the same full tuition and get exactly the same degree. 2tor handles the website, supplying the students with webcams, creating online teaching materials in partnership with faculty, the logistics of finding local schools were the students themselves can practice teaching. The company shares in the tuition revenue.

Expanding its student population nearly twentyfold with 2tor has not hurt USC’s teaching program in the slightest. In fact, it ranks No. 14 in U.S. News & World Report’s recently released 2011 college rankings for education, up from No. 38 in 2008. “One of the reasons great schools have trouble going online,” says Katzman, “is they didn’t believe they could do something of the same quality or better quality than the classroom. So you really can’t be okay. You need to be great.”

Katzman hopes to keep growing student enrollment in 2tor programs by another 1,000 to 1,500 students this year. His company’s approach to teaching is not to replicate the classroom experience, but rather to improve upon it. “Where you want to go with instruction is to flip things,” he says.

Instead of professors talking in one direction to hundreds of students, a lot of that one-way communication can be done with better teaching materials, including videos of lectures and interactive lessons which can be done asynchronously. The teaching moments come into play after students absorb a lesson and there is back and forth between the students themselves and their professors. Those require everyone to be “present” at the same time, but not necessarily the same place. That’s where the Webcams come in handy. 2tor also has an iPad app for students, and an Android app is on its way.