Coming on the heels of its $33 million series D financing last month, adaptive learning startup Knewton is announcing a very large deal with one of its investors, educational publisher Pearson. One of the largest education publishers in the world, Pearson is also one of the leading digital publishers, with 9 million students using its digital textbooks and course materials. It reaches an estimated 75 percent of the digital learning market in higher education.
Pearson will begin to use Knewton’s adaptive learning algorithms to power its digital textbooks and online course materials. Knewton will begin with Pearson’s MyLab and Mastering digital courseware, and become the adaptive learning engine behind all of Pearson’s titles. Adaptive learning uses software to present questions and educational content personalized to each student’s learning pace and abilities.
Knewton has shown some early success with test prep and online college courses, but the Pearson deal will give it access to millions of students for the first time. Knewton uses big data to personalize education, and it the Pearson deal will give it the massive adoption it needs to create the network effects necessary for its algorithms to work well.
So more than any financial return it may make from the deal, the real value to Knewton is all the data. The more it knows which combinations of learning modules and text help different types of students learn, the better it can tune its algorithms for the next batch of students.
For Pearson, adaptive learning points beyond the textbook as the main thing it sells. Knewton will have access to its entire library, which means that it may present passages from different textbooks and related courseware depending on the situation. The ability to mix and match lessons and chapters from different sources can potentially create more powerful learning experiences, but it also upends the traditional educational publishing model. The product being sold will no longer be the textbook, it will be the learning experience pulled from multiple textbooks on the fly according to each student’s needs at the time.