With entrepreneurs beginning to wake up to the huge demand for better learning tools, and the opportunity for technology to remove some of the long-standing barriers within the system, startups have begun to flood into the education market. As a result, venture investment has begun to flow into education, and with a new crop of entrepreneurial and engineering talent emerging, established players are turning into buyers.
In October, Amazon stepped into education for the first time with its acquisition of math instruction company, TenMarks, and a new month brings another first-time buyer and another EdTech acquisition, as STI scooped up education-focused app store, Chalkable.
STI is the 30-year-old maker of education data management solutions for K-12 schools, which focuses its suite of products on Student Information Systems, parent-teacher communications and reporting, among others. With its acquisition of Chalkable, STI is yet another example of an veteran education player looking to keep pace with the demand for more accessible and user-friendly learning tools by injecting new talent and technology into its ranks.
As a result of the deal, all nine members of the Chalkable team will be joining STI, and Michael Levy and Zoli Honig, the startup’s CEO and COO, respectively, will stay on as directors of STI’s new Chalkable team. Unlike some startup acquisitions, Chalkable’s product will remain active and, according to a source with knowledge of the deal, will be combined with technology from other acquisitions pipeline and STI’s SIS product, iNow, to give the company a revamped, modern product.
As part of STI’s move to become a more modern (and visible) EdTech company, it hired a new CEO and COO, both with decades of experience at K-12 education and technology companies to help lead the charge. This also means that STI appears ready to put some capital to work to inject new talent, as we hear from sources that the company paid around $10 million to acquire Chalkable.
The 500 Startups grad launched in September of last year with a platform that aimed to serve schools both as an app store and as a learning management system, serving 50+ institutions before it was acquired. The startup launched with $1.3 million in funding from 500 Startups, Expansion Venture Capital, former Facebook Chief Privacy Officer Chris Kelley and former Facebook mobile platform lead, Luke Shepard, among others.
Chalkable aimed to solve a nagging question among schools, parents and students: “Where do I go to find web-based learning tools on the web?” The amount of apps, content and digital learning tools on the Web and mobile devices is growing fast and is fragmented across an array of different sources. Chalkable set out on a mission to offer an aggregated resource for teachers and parents to find these tools, which, until the recent entry of Google (with Google Play for Education) didn’t exist for online education content.
The app store listed top education apps from a litany of resources across the Web, making it easy to search and discover quality content and click to buy. Backed by its basic learning management system, it allowed teachers to pull in student data and accounts from platforms and services like Khan Academy, Dropbox and Google, putting apps downloaded through the store and class data in once place.
While the idea has a lot of appeal, the road can be tough for startups operating in the K-12 market, because so much of school spending has traditionally been controlled by administrators at the district or state levels. The sales process can be long and is often mired in bureaucracy, and growth was measured for Chalkable (as it is for most) for this very reason.
Naturally, with a model like Chalkable’s, the more teachers have control in the decision-making process where the budget is concerned, the more freedom they have to choose and purchase apps — and the more revenue Chalkable sees as a result. Chalkable partnered with STI at first, but given STI’s much larger footprint as its services are now used by 5,000 schools across the U.S. and serve over 1.5 million students, an acquisition made more sense in the end.
With STI’s state contract in Alabama, Chalkable now has the opportunity to sell into every school in the state and, for a startup with a useful service that may be growing a bit of moss, that’s an opportunity that’s an opportunity that’s too good to pass up.
And for STI, Chalkable now allows their institutional customers to bring more modern, consumer-friendly and techy tools — the kinds that students use every day outside the classroom — into the learning process. In turn, it allows teachers, together with students, to create personalized “play lists” of learning content and personalized app experiences tailored to each member of a class.
“STI is continuously searching for ways to bring state-of-the-art education tools to our students, teachers and parents,” new STI CEO Derek Dunaway said in the company’s announcement. “The tools available through the Chalkable platform will increase the access our students have to highly relevant educational content and allow teachers to personalize instruction through customized apps that are recommended for each student’s level of learning.”