Wednesday, September 12, 2012

Big Investments Being Made in Online Education

Investing in online education has become big business. Since the beginning of September, news reports have surfaced of $5.7 million in venture capital going to a Chicago-based education startup called eSpark Learning. At the same time, the Canadian firm Desire2Learn reversed its strategy of not using external funding and raised $80 million.

eSpark, described by its founder and CEO as the Pandora radio for education, targets students in grades K-8. Students are given a custom playlist of apps and then asked to rate how much they like the app or how much they are learning, similar to the way Pandora listeners rate songs played, according to an article in TechCrunch.

Desire2Learn, which develops cloud-based learning systems, changed its funding strategy, in part, to keep up with the rapid pace of change in the online learning market. Blended learning programs, personalized learning, and open online courses have all contributed to that growth. Desire2Learn has responded by hiring 200 new employees in the past year, according to a report in Reuters.

Finally, the online educational startup Straighterline recently announced it will begin allowing college professors to attract online students to their for-credit courses through Straighterline and even set their own price for the course.

The company landed $10 million in investment capital last April and plans to use the funds to expand its marketing to institutions across the country. It already offers online learning in nearly 40 courses for a fee of $99 a month and a $39-per-course registration fee. Its long-term goal is to create a platform where students can pick and choose courses created by professors for credit.

“The idea is the student has those choices,” Burck Smith, founder of Straighterline, told The Baltimore Sun. “It’s really an experiment in creating a market for professors and students to meet up.”

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