‘We’re huge in learning loss!’ Edtech startups are cashing in on a post-pandemic crisis

For the nation’s schoolchildren, the data on pandemic learning loss is relentlessly bleak, with education researchers and economists warning that, unless dramatic action is taken, students will suffer a lifelong drop in income as a result of lagging achievement.

“This cohort of students is going to be punished throughout their lifetime,” noted Eric Hanushek, the Stanford economist who did the income study, in ProPublica’s recent examination of the struggle to make up for what students missed out on during the era of remote learning.

For the burgeoning education technology sector, however, the crisis has proven a glimmering business opportunity, as a visit to the industry’s annual convention revealed. The federal government has committed $190 billion in pandemic recovery funds to school districts since 2020, and education technology sales people have been eagerly making the case that their products are just what students and teachers need to make up lost ground.

“We’re huge in learning loss,” said Dan DiDesiderio, a Pittsburgh-area account manager for Renaissance Learning, a top seller of educational software and assessments. He was talking up his company’s offerings in the giant exposition hall of the Philadelphia Convention Center, where dozens of other vendors and thousands of educators gathered for three days late last month at the confab of the International Society for Technology in Education. For DiDesiderio, who was a school administrator before joining Renaissance, this meant explaining how schools have been relying on Renaissance products to help students get back on track. “During COVID, we did see an increase across the board,” he said.

Renaissance is far from the only player in the edtech industry that is benefiting from the surge in federal funding, and the industry enjoyed a huge wave of private funding as the federal tap opened: The annual total of venture capital investments in edtech companies rose from $5.4 billion to $16.8 billion between 2019 and 2021 before tailing off.

The largest chunk of the federal largess, $122 billion that was included in the American Rescue Plan signed by President Joe Biden in March 2021, requires that schools put at least 20% toward battling learning loss, and companies are making the case that schools should spend the money on their products, in addition to intensive tutoring, extended-day programs and other remedies.

“The pandemic has created a once-in-a-lifetime economic opportunity for early stage companies to reach an eager customer base.”Anne Lee Skates Andreessen Horowitz

“The pandemic has created a once-in-a-lifetime economic opportunity for early stage companies to reach an eager customer base,” declared Anne Lee Skates, a partner at venture capital firm Andreessen Horowitz, in a recent article. (Her firm has invested in edtech companies.) The federal funds “are the largest one-time infusion of funds in education from the federal government with almost no strings attached.”

Five days before the convention, the National Center for Education Statistics had released the latest devastating numbers: The decline in math scores for 13-year-olds between the 2019-20 and 2022-23 school years was the largest on record, and for the lowest-performing students, reading scores were lower than they were the first time data was collected in 1971.

But the mood was festive in Philadelphia. The educators in attendance, whose conference costs are generally covered by their district’s professional development funds, were excited to try out the new wave of nifty gadgets made possible by the advances in artificial intelligence and virtual reality.

“For a lot of us, it’s like coming to Disneyland,” said one teacher from Alabama.

One could also detect the slightly urgent giddiness of a big bash in its final stages. Schools need to spend most of their recovery funds by 2024, and many have already allocated much of that money, meaning that this golden opportunity would soon close. And summer is the main buying season, with the fiscal year starting July 1 and with educators wanting their new tools delivered in time for school to start in the fall.

Hanging over the proceedings was an undeniable irony: The extent of learning loss was closely correlated to the amount of time that students had spent doing remote learning, on a screen, rather than receiving direct instruction, and here companies were offering more screen-based instruction as the remedy. Few of the companies on hand were proposing to replace the classroom experience entirely with virtual instruction, but to the degree that their offerings recalled the year-plus of Zoom school, it could be a bit awkward.

“A lot of people don’t like us, because we can do remote-school stuff,” said Michael Linacre, a salesperson for StarBoard Solution, before demonstrating one of the cool things a StarBoard whiteboard could do: He jotted 1+2= with his finger and up popped 3. “There’s a mixed feeling about that now.”

Most of the vendors were not about to let that awkwardness get in their way, though, as they cajoled teachers to listen to their pitch, often with the lure of free swag.

“A lot of people don’t like us, because we can do remote-school stuff. There’s a mixed feeling about that now.”

“I love the shirt — I’m a huge NSYNC fan,” said a library technology specialist from a New Jersey elementary school at the booth for BrainPOP, a group of educational animation websites whose display included a T-shirt that nodded to the 1990s boy band. The vendor praised the teacher for getting the reference — the union guys setting up the expo had totally missed it, he said — and told her that all one had to do to get one of the shirts was attend one of several pitch sessions during the day. “Students who use BrainPOP two or more times a month show measurable gains toward grade-level proficiency,” asserted a large poster listing the various sessions.

Nearby, a Microsoft salesperson named Mike had a full audience sitting on white settees arrayed in his zone as he launched into his demonstration of the company’s new AI tools for helping kids learn to read aloud. He showed how a program called Reading Coach captured video of a student reading a passage aloud and flagged mispronunciations, with an automated voice declaring, “These words were the most challenging for you.” There were even more features in the offing, Mike said; the program would soon produce comprehension questions to ask about whatever passage the teacher gave the students to read, and it would soon be able to gauge students’ level of expressiveness, too.

One might wonder what all this would leave to the actual teacher, but Mike assured the audience that Reading Coach would simply allow educators to focus on other tasks.

“It’s a time saver,” he said.

In fact, education technology is replacing teachers in another sense: A large share of the vendors on hand were themselves former educators who had left the classroom for jobs with tech companies, where they could still feel like they were involved in education, but without the stresses of the classroom and often with higher pay. One former first grade teacher who had made this transition herself two years ago said she had seen the trend accelerate among her colleagues during the pandemic, when the challenges of juggling hybrid online and in-person instruction and managing students who were struggling with learning loss and delayed socialization had made jobs in edtech seem especially alluring.

A large share of the vendors on hand were themselves former educators who had left the classroom for jobs with tech companies.

Remote learning “flipped the field on its head,” she said. “We were getting a lot more responsibilities than before, a lot more hours, a lot more stress.” At the first of the two edtech companies she has worked for, she said, “almost everyone was an ex-teacher hired the past couple years. Edtech is a good space for teachers to go to: It’s a corporate job, but they respect the skills that teachers have.”

Knowing that the edtech sector was not only seeking a large share of federal recovery funds for schools but also playing a role in the teacher shortage gave the proceedings an extra edge. The profusion of inventively named vendors was overwhelming: Beanstack, Impero, Bluum, Archangel, Teq, Ozobot, Nuiteq, Vivacity, Figma. Kami and Hāpara sounded more like Ikea furniture, but no, they were here, too.

Among the rookie attendees wandering the hall was Joseph Tey, a Stanford computer science major. He was there with a classmate to ask teachers how they felt about the rise of AI. Were they worried about students cheating? Were they going to incorporate AI into their instruction?

“Tech adoption in education is tough,” Tey said. “Do you adopt something only when the fire is under your ass? COVID was one fire. This is another fire.”

The COVID-19 fire had been great for one vendor, Wakelet, a website that allows users to pull together videos, images and text files into a single webpage, for use by individuals who want to to promote a resume or body of work or by teachers seeking to present information on a given subject. Its use by teachers had boomed during remote learning, said cofounder Rick Butterworth.

“Tech adoption in education is tough. Do you adopt something only when the fire is under your ass? COVID was one fire. This is another fire.”

“The pandemic was really a benefit for us because we had so many users who came on board,” he said. “2020 was an interesting year for us.” The site has been free to use, with the company funded for several years by angel investors, he said, but it was now about to start offering tiered paid plans for schools, ranging up to $6,000 per year. Among the features available to paying customers: “bespoke professional development.”

Across the aisle, a vendor named Whitney, a former elementary school librarian, was corralling passersby for her next pitch session for MackinMaker. “Have a seat! We’re about to have a demo. It’s really fun. Just fill out the card for the giveaway.” The giveaways were T-shirts that were waiting on each chair.

“It’s all about the giveaway,” said one teacher, with gentle sarcasm, as she took her seat.

Whitney gave her pitch for MackinMaker’s online e-book marketplace. After she was done, her colleague Ethan told the teachers, “If you need a different size T-shirt, let us know.”

Luring teachers into pitches was easiest at the various sellers of virtual reality headsets, some of which had long lines of educators waiting their turn. I tried a headset from ClassVR that was playing virtual reality programs from Eduverse. The first scene was a pastoral landscape of fields and stone walls whose context was unclear until the vendor explained that it was a scene from the Civil War. She clicked over to another of Eduverse’s 500-odd options, this one featuring men building railroads in the 19th century, where I accidentally got myself hit in the head, virtually, by a sledgehammer.

Schools could buy eight of the headsets for $4,299, or 30 for $16,999, the vendor said. Sales in recent years had been “amazing, in terms of rapid growth.”

The afternoon of the convention’s opening day was wearing on, and the conference tote bags were already getting overstuffed with all the free swag. Conveniently, Kahoot (an Oslo-based operation with the slogan “Make learning awesome”) was giving out tote bags as prizes for those who won in demonstrations of its AI-generated quiz games. I participated in a game with questions about the Fourth of July and was frustrated to accidentally input the wrong answer on my smartphone in response to a question about the size of the U.S. population in 1776. (The correct answer was 2.5 million.)

The Kahoot vendor handed out the three tote bags to the victorious educators, who would have two more days of conventioneering to fill them up. “Did you learn something about Independence Day?” she said.

A few weeks later came a reminder that the stakes for the edtech sector went far beyond tote bags and T-shirts: Kahoot announced that a group led by Goldman Sachs’ private equity division was buying it for $1.7 billion.