Educational startup Grockit is expanding its reach today from social learning to streaming video. The startup has launched Grockit TV, a set of live courses to supplement its SAT and GMAT test prep service.

The courses are streamed live and also available as archives, but to encourage students to watch the live stream together (where they can interact via chat), the live stream of the course is free. But if students want to download a course or re-stream it, students will get all 20 hours worth of test prep and college admissions videos for $99. Best of all, Grockit CEO Farb Nivi is one of the teachers (he is a former Princeton Reviews national teacher of the year). The first 50 readers to use the promotion code “techcrunchlove” will get a free Grockit TV video course plus its premium online adaptive test prep.

Grockit has been quietly testing a few GMAT courses, and plans to stream its first SAT session on October 10. Founder Farb Nivi is excited about the potential to bring in more new students to Grockit through social marketing. Students can log in with their Facebook or Twitter accounts and invite their friends on Facebook or Twitter to come join them (online study session!). In the tests so far, some students are “bringing in double digit numbers of people to Grockit per single share,” says Nivi.

Grockit has tiptoed into video last June when it began to include YouTube Edu videos into its courses, but this goes a step further. And it won’t stop with test and college admissions prep videos. “We’ve got plans for Grockit TV content beyond test prep” says Nivi, “including K12 academic classes and programming for parents and students and teachers.”

Grockit is on a roll. Yesterday, it became the first educational app on the Google Apps Marketplace. Nivi just hired a CEO from Google, and closed a $7 million B round last May.

Online learning site Grockit is scaling up its leadership team after raising $7 million last May. Today it is announcing that it is hiring Roy Gilbert as CEO. Gilbert is Google’s director of user operations and policy, in charge of many non-advertising operations. He helped set up Google’s India operations and grew it from 20 people to 1,000, and was the first business manager for Gmail.

Founder Farb Nivi recruited Gilbert, who will also be taking a board seat. Nivi will be president, chief product officer, and chairman. “I kind of look at him as our Eric Schmidt,” says Nivi, who came back getting hit by a minivan last year to keep his startup going and growing.

Gilbert served in the military driving nuclear submarines, and yes, he was a boy scout. But he also comes from a family of teachers, and he and his wife started a school in Hyderabad while he was in India for underprivileged children called the Rainbow Primary School. So he has education chops as well. “I pretty much can’t believe we landed him,” says Nivi.

Nivi also recently hired a chief marketing officer, Chris Strausser, who created the Jamba Juice brand, and previously worked at PepsiCo and Kaplan. Knewton, another online education startup, also recently made a top executive hire. The whole education space is definitely heating up.

Online learning startup Knewton has a new chief operating officer. David Liu, the former senior VP at AOL who spearheaded its Lifestreaming efforts and is also an angel investor (SimpleGeo, BlockChalk), is joining Knewton as COO and a member of the board of directors.

Knewton is an adaptive learning platform which raised a $12.5 million B round last April from Firstmark, Accel, Bessemer, First Round, and Reid Hoffman. Knewton currently offers online test prep and tutorials for the SAT, LSAT, and GMAT using adaptive learning algorithms which progressively make the questions harder or easier depending on each student’s knowledge and ability.

Liu’s charge is to help turn Knewton into a platform for textbook publishers and schools to create their own adaptive learning tools. Knewton proved itself with its test prep products, but now wants to move into the center of the education market, an approach other education startups like Grockit are also pursuing.

Grockit is an online learning community that adds game mechanics to helping high school students prepare for standardized tests such as the GMAT and SAT. The startup, which just raised $7 million in funding, is also moving into general online education for high school and middle school students with impending launch of the Grockit Academy, an online destination where students can learn together and teach each other.

Grockit has correlated its content and tags to over 1000 YouTube Edu videos, which teach everything from from individual academic standards to every area of GMAT prep. For example, while a student is studying for GMAT prep on Grockit, the site will surface videos teaching any content related to the GMAT. It essentially blends text learning lessons with video learning.

YouTube EDU has grown steadily since its launch last year to more than 65,000 videos. It would be beneficial for Grockit to source videos from Academic Earth, which is a Hulu-like platform educational videos.

Online learning site Grockit raised another $7 million in a Series C financing today. Atlas Venture led the round, with existing investors Benchmark and Integral Capital participating.  The last time Grockit raised money was an $8 million Series B in 2008.

Grockit is an online learning community that adds game mechanics to helping high school students prepare for standardized tests such as the GMAT and SAT.  With the new capital, Grockit plans to expand into more general online education with the Grockit Academy. “We are moving out of test prep into education,” says CEo Farb Nivi.  It will start with a Summer Enrichment Academy in June.  School districts are already interested because they are losing funding for summer enrichment programs, and Grockit is a free online alternative.

Grockit Academy will be a place where students can learn together and teach each other.  It will start with math and English curriculums for 8th to 12th grades.  The group learning is free, but if students (or their parents) want reports or adaptive learning algorithms to help them get smarter, they can pay a $79 annual fee.  It is the same freemium model Grockit has with its test prep community.  Nivi says he is seeing conversion rates of between 3 and 7 percent from the free to premium accounts, and those conversion rates are increasing.

Grockit launched at TechCrunch50 in 2008.  CEO Farb Nivi came back from a near-death motor accident last year, to rebuild the startup and he is now refocussing on the larger education market rather than just test prep , which is already crowded.

Sitting across from Grockit CEO Farb Nivi, you’d never know that a few months ago he was spending weeks in the hospital and with tubes down his throat after getting hit by a minivan on his Vespa. One of his kidneys burst and half of it had to be removed. His recuperation was slow and painful, and it took a toll on his social learning startup as well. He lost some employees. Investors, who put in $8 million last year, began to worry about Grockit’s health as well.

Nivi came back strong, though, and he’s about to push out a significant redesign for Grockit. The social learning site, which launched at TC50 in 2008, helps high school and college students study together for standardized tests such as the SAT, GMAT, and GRE, and connects them with tutors. It competes with Knewton and Brightstorm. The redesign (see screenshots below) does a better job highlighting the three main things students can do on Grockit: take virtual lessons from tutors, do a group study session, or practice solo.

“The big feature change is that each of these modes is adaptive,” says Nivi. “So solo games adapt to you as a player, group games use an algorithm to figure out what group to put you in, and lessons will float up which teachers and lessons we recommend.”

Grockit uses game mechanics to encourage participation, and is designed so that students can really help each other. It learns a student’s strengths and weaknesses over time, and serves up appropriate questions (much like Knewton does) or matches them to other students with complementary skills.

The new homepage also includes a dashboard which will show students their relative performance for different skills, such as verbal or quantitative. Leaderboards for both students and tutors will be on the right. The group study sessions are live and all the students text chat with each other to figure out the answers to each question together. Or they can find a tutor by looking at their ratings and student testimonials, and pay for lessons and live classes right on the site (Grockit takes a 20 percent cut).

Grockit already has a small, but active community of about 10,000 students a month. Nivi plans on expanding the platform beyond standardized test prep to K-12 curriculums next spring. He will open up the platform to schools across the country and allow teachers to use it as either a primary or supplementary teaching tool to get students to practice questions across every main subject area, from math and science to social studies and history.

It is a Ning model for education. He plans to create a private site for each public school in the country which can then be claimed by a teacher or administrator and used only by students of that school (at least at first). Teachers can create their own curriculums, choosing from a menu of thousands of questions for each subject, or adding their own. To me, this is where Grockit will become interesting. It could become a generalized computer learning tool across every imaginable subject. Teachers and tutors can create their own set of “test” questions, and students can play the tests out either alone or in groups. They can rate the best courses and even have online competitions to see who is the smartest. Homework may never be the same again.

Textbooks are so yesterday. Yet student backpacks are still weighed down by them. Replacing those textbooks with software has been one of the great white whales of computing going back at least to Alan Kay’s original Dynabook concept 40 years ago (which he is still working on). Today, there are a slew of startups tackling the problem of e-learning (Brightstorm, iKnow, Grockit, PrepMe), and some progress is being made.

The low-hanging fruit seems to be test preparation and video tutorials, but the bigger prize over time will be augmenting or replacing printed textbooks and increasingly penetrating the global education market. One small startup with the ambition to take that prize is Knewton.

Based in New York City, Knewton raised $2.5 million last May from Accel Partners, First Round Capital, Reid Hoffman, Ron Conway, and other angels. The company was very much under the radar until it showed up as a finalist for the Amazon Web Services Start-Up Challenge last month (see video below). The company is built entirely on Amazon’s cloud computing services (EC2 for computation, S3 for storing video tutorials, and Mechanical Turk for fine-tuning its test questions). And currently it is leading in the voting for the Startup Challenge, with 51 percent of all votes cast. (That kind of online voting can be easily gamed, of course). Actually, the Startup Challenge already has its winner: Yieldex. Knewton did win the popular vote, though.

The founder and CEO, Jose Ferreira, used to be an executive at Kaplan, the test prep giant. Knewton’s two chief test designers, Len Swanson and Robert McKinley, wrote the scoring algorithms for the adaptive learning tests used by, respectively, the Educational Testing Service (which administers the SAT, GRE, and AP tests) and ACT.

Adaptive learning tests are taken on computers. The questions get progressively harder or easier depending on each student’s answers. Thus, they adapt to each student’s knowledge and abilities. Knewton is taking the adaptive learning concept and applying it first to online test preparation services. It is not cheap. Right now it offers a year-long subscription to prepare for the GMAT test that costs $1,390. The company guarantees a minimum 50-point jump in a student’s test score or their money back.

The service combines live video chat with an instructor in a whiteboard environment, along with learn-at-your-own-pace sample questions and tutorials. Knewton finds the best teachers it can get and pays them $500 to $800 an hour. In addition to the virtual classroom, Knewton keeps track of each student’s progress in mastering the thousand or so concepts that can be covered in each test. A “concept queue” keeps the students abreast of what concepts they have mastered and which ones they are weak on. They can click on each concept tag to dig deeper. (See screenshots below).

A big “Knewton’s Law” button automatically presents the next concepts and tutorials each student is ready for at that particular moment, based on what they’ve covered and how they’ve done so far. The content is delivered in whatever format (text, video, animation) and difficulty level that student learns best from for that particular concept.

A color-coded progress bar tells them how they are doing in different categories such as math or verbal. Knewton also shows students what their score would be on the test if they took it that day, based on the questions they’ve actually answered. Students also receive alerts for upcoming classes, homework deadlines, office hours, and the like.

Knewton plans to expand beyond the GMAT to other standardized tests, but the really big opportunity is to apply its learning engine directly to online textbooks. Ferreira explains the concept:

We tag content down to the atomic level. A student who accesses a digital textbook, for instance, any given day they come in, instead of the same syllabus every day, they get a new syllabus based on the concepts they know and the ones they don’t know. If they learn best via video, they get that. If they learn best with text they get that.

Several textbook publishers big and small are talking to Knewton about pursuing partnerships, says Ferreira. Baking adaptive learning techniques right into the textbooks could one day make the online versions of textbooks much better learning tools than the offline versions. Not everubody learns the same way, and the one-size-fits-all approach that the textbook industry takes today needs to be changed.

But can textbooks, tweaked with the right software, ever become good teachers in their own right? The prospects of such a future raises more than just pedagogical questions. The Teacher’s Union might have a fit if software like Knewton’s ever threatens their jobs, but education is so broken in this country that anything that make students smarter should be embraced with open arms. Unless, of course, textbooks are going to cost $1,000 online instead of $100 in print.

(For more of our coverage of e-learning startups, read our profiles of TC50 finalist Grockit and Japan’s iKnow).

Watch a video of the awards ceremony here.

Three jam-packed days, and 52 startup demos later, we finally have a winner for this year’s TechCrunch50. Every day, the presentations just seemed to get stronger and stronger. There were so many strong contenders this year that we are awarding five jury selection prizes, in addition to the top prize. But there must be a winner, and that winner is…Yammer.

Yammer

Yammer is Twitter with a business model. Created by an existing company, Geni, to scratch its own itch, Yammer takes the familiar Twitter messaging system and applies it to internal corporate communications. There is such a huge demand for this type of service that 10,000 people and 2,000 organizations signed up for the service the first day it launched on Monday. Anyone with a corporate email can sign up and follow other people in their company. But if a company wants to claim its users, and gain administrative control over them, they will have to pay. It’s a brilliant business model.  (Watch a video of the the winning demo).

The runners up are:

Atmosphir

Atmosphir is a gaming platform that anyone can use to create their own immersive, 3D levels. The tool works by dragging and dropping level elements into place – pieces of land, bridges, hazards, etc. To play your level, all you have to do is hit “play” and you can even go back to the editor after entering gameplay. Atmosphir is available for Macs, PCs and Linux machines and was developed by Minor Studios.  (Watch the video).

FitBit

FitBit produces a small gadget that can be clipped discreetly to your clothes. It tracks your movement throughout the day and delivers reports on how active you’ve been. These reports can be accessed through a website and used to learn not only how many steps you’ve taken but your sleeping patterns and caloric burn as well.

GoodGuide

GoodGuide helps consumers find better and more comprehensive information about the products they buy and the companies that make those products. The site ranks products on their health, environmental and social “goodness”, empowering consumers to buy conscientiously. The founders say they have enlisted the support of scientists and technologies, as well as hundreds of information sources, to make the service as accurate and informative as possible.  (Watch the video).

Grockit

Grockit is an online, interactive learning tool that brings students together to answer quizzes with each other. The startup has raised $10 million for what it’s calling a “Massively Multi Player Online Learning Game”, which takes its cue from World of Warcraft and applies that game’s concepts to SAT-like study groups. Grockit features a chat room where students can talk with one another as they deliberate over questions. They can also award each other points for their insight.  (Watch the video).

Swype

Swype introduced a radical new gesture-based way to input text on touch-screens. Created by Cliff Kushler, the same man who co-invented the T9 predictive text entry system found on over 3 billion phones, Swype lets you simply connect letters on a touch-screen keyboard by making squiggles between them using your finger or a stylus.  (Watch the video).

Grockit, the mysterious online learning site that has been operating in stealth for the past year and has raised a total of over $10 million, has finally revealed itself to the public, and it doesn’t disappoint. The site calls itself a “Massively Multi Player Online Learning Game”, taking gaming concepts that have made World of Warcraft a massive hit and applying it to what amounts to an online SAT study group.

After logging in, users are presented with a list of active classrooms, each of which consists of less than a half dozen students. Once the session begins, the students are presented with a question along with a set of possible answers. Students can use an embedded chat box to debate on the possible choices, and can also leave comments beneath individual answer choices. After choosing an answer, Grockit highlights the correct one and an explanation detailing why it was the right choice.

As the sessions progress, students can award each other with “Grockit Points” for participating, which allow them to increase their Grockit rank (up to a level 10 blackbelt). The company says this leveling system gives users an incentive to play smart, and play often, and has worked well during its beta testing.

Grockit has the potential to be a huge hit – every year, millions of students spend hundreds or thousands of dollars on expensive prep classes for standardized tests like the SAT and the GMAT. Grockit may not be a replacement for these classes, but it’s a powerful tool nonetheless. Some of the panelists questioned the site’s virality, wondering why anyone would play this learning game in the first place. But they seem to forget just how far many students will go to ensure their success, buying handheld quizzing devices, test books, and the aforementioned prep courses. If Grockit can prove that it genuinely helps its students learn (and I think it will), then it should have no problem finding an audience.

Grockit originally launched in 2006, as an online video prep course for standardized tests. In 2007 the company abandoned the model and began developing the product that launched today.

The newest incarnation of Grockit launched at TechCrunch50 during the Games session. You can watch a video of its presentation here.

Expert Panelists

Robert Scoble – There are two kinds of gamers – World of Warcraft gamers play for hours on end. On other hand, me and my wife like to learn stuff we want to win play stuff and get out. This looks like lots of commitment, have to set up game time, then return to the site later…

Grockit – You can start a game instantly, just play for five questions.. As far as game mechanics are concerned… We want to give experts some recognition they can work towards

Robert Scoble – Are you going to partner with some of the book companies (SAT, GMAT, etc?)

Grockit – We aren’t affiliated with the tests, we created the site on our own. We could get in a situation where we license a bunch of questions from the College Board etc.. Eventually we’ll release an open platform so you can make what you want…

Robert Scoble – do you have a mobile client?

Grockit – We’ve got an iPhone preson we’re going to get on board, working toward it.

Sheryl Sandberg – Where do you think most of the content would come from? What about users?

Grockit – Once we vet the system and it’s scalable we’ll open it up. We already have it in there, just have to skin it.

Robert Scoble – Can you put media into the answers? For instance with a language?

Grockit – Any of the answer choices could be push or pull (can do media)

What’s the distribution model?

Grockit – Create sessions with your friends, there’s motivation for experts in system to get people in

Joi Ito – how do you invite people?

Grockit – Load Gmail account, or Facebook friends)

Joi Ito – seems like a new idea, so if I got an email that says let’s play SAT toeghetr, I think t doesn’t feel very viral..

Robert Scoble – That’s why I was wondering about ties to books. This would be good to study from the book.

Grockit – I guess the best way to think about it is study groups. If you get one of these people, it’s pretty natural to get friends in there.

Bradley Horowitz – At first I thought this was like Tom Sawyer’s multiplayer fence painting . But I could see this as a great virtual tool. How do you see this as it comes up against yahoo answers?

Grockit – Everything in game is archived, will be available for offline viewing..

Bradley Horowitz – Is it by search engines?

Grockit – Probably for free content, when you create your content that will be your choice.

Robert Scoble – Can i play all the way through, do i become credible source if I’m right?

Grockit – As you earn experience points you level up.

If it seems like everybody is starting their own virtual world, it is because they are. A report put out today by Virtual Worlds Management tracks $161 million put into 14 virtual-world investments during the second quarter of 2008. In the first quarter there was even more activity, with $184 million put into 23 virtual worlds and supporting technology companies. That brings the total this year alone to $345 million across 37 deals. Some notable deals (you can see the full lists by clicking on the last two links above):

Second Quarter 2008

Grockit——————-MMO Learning Game——-$8 million——-Integral Capital and Benchmark

Nurien Software——–3D social networking——-$15 million——-Northern Light, Globespan, NEA

PrimeSense————-Gestural Interface———-$20.4 million—–Led by Canaan Partners

Realtime Worlds———-MMOG Developer———$50 million——–Maverick Capital, NEA

Stanford Parallel —-Parallel Processing————–$6 million——-Sun Microsystems, AMD, Nvidia, IBM,
Processing Lab for Virtual Worlds HP, and Intel

Turbine———————-MMOG——————-$40 million————–Time Warner and GGV Capital

First Quarter 2008

9You———–Virtual World/Casual Games——$100 million——–Temasek Holdings

Dizzywood —————Youth World————— $1 million——-Shelby Bonnie, Charles River Ventures

EveryScape————— Mirror World————–$7 million——–Dace, Draper Fisher Jurvetson

Fix8 ———————- Avatar Content————$2 million ——–SK Telecom

Gizmoz ——————- Avatar Creation ———- $6.5 million——-DoCoMo Capital, ngi group

iOpener ——————–Mixed Reality ————-$6 million———Triangle Venture Capital

Sparkplay Media——Casual MMO with Games—–$4.25 million—–Redpoint, Prism Ventureworks

Unisfair ——————–Virtual Events Platform—–$10 million——-Norwest, Sequoia Capital

We don’t know much about Grockit. The company is creating a new way to get people to learn online, and has spent the last year working away in stealth mode. Whatever it is, it’s apparently impressing investors: Grockit just raised $8 million in Series B funding from Integral Capital and Benchmark Capital, bringing its total to $10.7 million – impressive for a product that has yet to see the light of day.

According to the company’s press release, Grockit is “a MMOLG (Massively Multi Player Online Learning Game) where people can connect to learn from each other”. The company hopes to release the product this fall.

Grockit originally launched in November 2006 as an online exam-prep class that competed with companies like Kaplan and The Princeton Review. In July 2007 Grockit announced that it had scrapped that idea in favor of their current plan, and raised a $2.7 million Series A round led by Benchmark and angel investors.

The company was founded by Farbood Nivi, who taught in the exam-prep business for years, and Michael Buffington, an experienced Rails developer.

Prepme is one online test prep company coming out of the University of Chicago’s business incubator. Founded in 2001, the company offers test preparation for the SAT, PSAT, and ACT, using an adaptive algorithm to customize the preparation course for each student.

Unlike Kaplan’s online offering, Prepme doesn’t calculate the best lesson plan once, but continuously as you work your way through the material. Their system keeps track of what questions you get right and wrong, working you harder on the types of questions you miss.

Additionally, customers can connect electronically, using real time chat, with high scoring college students who serve as tutors.

With test prep for the SAT alone being a $130 million dollar-a-year industry, using web 2.0 technology to help students seems like a logical move. Seeing the threat, some of the major players in the industry, like Kaplan or Princeton Review, have been attempting to develop online test prep products to compete with new online offering like Prepme. Prepme charges around $300 to $500 for their lessons compared with Kaplan’s lowest offering costing $400.

At the same time, Prepme is expanding the tests which they provide preparation for to include the GMAT, MCAT, and LSAT and partnering with brick and mortar companies to provide comprehensive test-preparation services. Additionally, the company signed a contract earlier this year to provide their services to every high school junior in the state of Maine.

See also our coverage of Grockit, a Silicon Valley startup focusing on helping students study for the GMAT via P2P ideas evolved through MMOGs..

Now they are funded – $2.7 million total ($2.3 million from Benchmark, $400k from angel investors Mark Pincus, Rob Lord, Reid Hoffman Thomas Ryan and others) in a Series A round was closed last month. And they are changing their model completely.

Instead of holding one-to-many classes via Webex, the company is building a new product from the ground up. Founder Farbood Nivi calls it MMOL, for Massive Multiplayer Online Learning (a play on the term MMOG). He says studies show that people learn best from eachother, not in a teacher-students situation. He, along with technical co-founder Michael Buffington (Price.com, MeasureMap, Stikkit), are going to try to prove this works. Beyond that, they aren’t divulging any details at all.

Grockit was started by Farbood Nivi, who has been teaching exam preparation since 1998. He worked for Kaplan and was Teacher of the Year for The Princeton Review in 2002. Just a few months ago he decided to start his own prep school where students can attend WebEX classes.

Grockit is significantly cheaper than the major review schools but Nivi says his profit margin is bigger.

“The other guys tend to be enormously bloated as far as companies go,” Nivi said via IM on Thursday. “They have very inefficient operations. They spend $1.5 million to generate $1.4 million. The virtual world is cheaper and more pervasive.”

To start out, Grockit is offering 16 90-minute sessions plus the official GMAT review text books for $399. Kaplan online is $1,249, The Princeton Review is $899, and Manhattan GMAT Prep is $990. Nivi says that the Grockit price may go up a little within the next year but he doesn’t have actual plans to increase it.

“One student has dropped the course with a competitor and decided to buy a laptop with the money he is saving by taking Grockit instead,” Nivi said. “Taking one of the big guys means that just applying to a hand full of MBA programs is a couple of thousand dollars out of your pocket.”

For now, Nivi is satisfied using WebEX where students and teachers can chat and interact. In the future he hopes to develop his own software for interactive classes. He also hopes to branch out from solely GMAT prep and start ACT courses next year because he believes that the ACT “is going to eat the SAT.”

To promote his service, Nivi and his staff of teachers have signed up as experts on BitWine. They are also banking on word-of-mouth marketing, hoping that saving money is a major incentive for hopeful students.

The obvious question here is if Grockit is a get-what-you-paid-for type deal. Having not taken entrance exams in six years, I couldn’t think of appropriate questions to quiz Nivi with but his experience is impressive enough to say his school is worth serious consideration. Especially for anyone considering dropping major ducats on an MBA.