After winning big with the Alibaba public offering, SoftBank Capital has returned to the early stage market, this time to lead a $6 million investment into EdCast, a new online education company launched by serial entrepreneur Karl Mehta.
This is the second time SoftBank has backed one of Mehta’s startups, albeit in very different sectors. Mehta had previously founded PlaySpan, a manager of virtual currency systems, which was sold to Visa Corp. in a $240 million deal.
Now, SoftBank, Mitch Kapor, Menlo Ventures, Novel TMT Ventures, Cervin Ventures, Aarin Capital, NewSchools Venture Fund/ CoLab and the Stanford StartX Fund, are all investing in Mehta’s latest endeavor — the transformation of higher education online.
Mehta first worked in startups in 1999, with MobileAria, a startup delivering voice-enabled news, weather, financial information and sports over wireless devices. “It was during the boom time and the explosion of the internet and dot-coms, where we had a really clever idea of bringing internet content to mobile networks. It was an idea and a product way ahead of its time,” Mehta says. “We launched with Verizon and Sprint, and then 9/11 happened… We pivoted from consumer to a business-to-business company and converted it into a mobile asset management and mobile tracking service.”
From mobile content, Mehta then turned to payment networks a year after MobileAria was sold to Wireless Matrix (now owned by CalAMp Corp). “The idea was to provide a virtual currency trading platform for gamers so they had a market to buy and sell virtual currencies,” says Mehta. “That grew to include a virtual currency wallet infrastructure and we became the largest wallet and payment processor for all mobile gaming. Way before Bitcoin, we were the first virtual currency platform.”
Not satisfied with the solid return he netted from the roughly $240 million exit to Visa (after raising $30 million from SoftBank and Menlo Ventures — where Mehta now serves as a venture partner), Mehta is back looking to change higher education through EdCast.
The company made a splash earlier this month with its announcement that sustainability expert and economic policy guru Jeffrey Sachs, a professor at Columbia University and founder of its Earth Institute, would be teaching a sustainability curriculum for the 250 institutions in the Sustainable Development Solutions Network.
Mehta’s strategy for EdCast is to continue partnering with higher education networks that have multiple institutions as members. Alongside the financing, the company announced a partnership with the Open Education Consortium, a network of hundreds of higher education institutions, including Madrid Polytechnic, Osaka University, the University of Cape Town, Delft University of Technology, Korea University and Michigan State University.
“My goal is to build a multi-billion dollar company,” says Mehta. However, instead of competing with universities, Mehta is trying to find a way to open them up to even greater collaboration, and potential sources of revenue. He envisions a “multiversity” where students can tailor their education by picking the best classes on offer from any university in any country around the world. “We’re trying to build the next big thing for the industry, rather than trying to take away the value from them,” he says.
With SoftBank’s capital, and the support it engenders for expansion into new markets from other parts of the far-flung SoftBank empire, EdCast will definitely have some deep-pocketed help. EdCast is one of two education technology companies in SoftBank’s 50-company strong portfolio, with Echo360 serving as the firm’s other ed-tech bet.
“Education is a massive industry that is just starting to see the impact of some of the technologies which have reshaped much of the rest of the commercial world. Social sharing, interactivity, video and deep data analytics all hold the promise of delivering on improving outcomes for students which if successful would be immensely important to the global economy,” wrote SoftBank partner Steve Murray in an email.
Photo via Flickr user Alan Levine.