Investment in EdTech reached record highs in 2015, and it didn’t stop there. GeekWire revealed that in 2017 EdTech investments reached the $1.2 billion mark. And industry experts expect this to continue to grow in the coming years, as new innovations are released to the market. In this guest post, EdTech blogger Dana Anderson shares her thoughts on how startups in this industry can secure funding.
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Guest Author: Dana Anderson, EdTech Blogger
Although investment projections are increasing for EdTech startups, getting funding or even knowing where to get funding can still remain a challenge. Not everyone will get the chance to pitch their idea to the likes of Mark Cuban in Shark Tank despite their potential.
Below is a short guide on how to get the recognition and funding that many EdTech startups deserve.
- Conduct thorough research
Lingumi, a UK-based English-learning app for preschoolers, recently received $1.5 million in seed funding. The company is using science-backed research to make language learning accessible to their target market. It took three years for the app to pick up investments that can help them make a difference. During this time, they continued to find ways to make their app more useful and ultimately unique from its competition.
Ask yourself whether your community is in need of what you are offering. Assess how much they are willing to pay for it, and examine how sustainable it is. Lingumi is an example that the best EdTech tools are created to solve problems. With the right exposure, someone will eventually notice what you can provide to the market.
- Find a like-minded community
It also helps to be surrounded with relevant communities. Do not be afraid to attend conferences, education hackathons, startup conventions, edcamps, or even a small school event. It is not just about making connections for more potential investors. It's also a way to gather ideas and insights from groups who share your interests. Connect with administrators, teachers, students to gain firsthand knowledge of their needs so that you can be the one to provide the all important solution to their problem.
- Link up with corporations
Corporations are on constant lookout for potential partners or acquisitions. Look for networking opportunities with managers or executives from big companies. They might get interested in funding your company as part of their research and development projects.
- Seek out grants and government funding
Aside from private funding, there are opportunities to obtain grants from the federal sector. For instance, the US Department of Education has a program called Small Business Innovation Research. The winning entrepreneurs in their annual competition receive prizes in the form of investment. There is also the Education Research Grants Program of the National Center for Education Research, as well as the Special Education Research Grants Program. Be on the lookout for these types of programs as well as deadlines for competitions.
Another successful funding campaign in the EdTech industry involved Primo Toys. The startup makes a wooden robot that teaches kids about code and computer programming. Founder Filippo Yacob recently admitted to Forbes that they were able to raise $1.6 million from Kickstarter. Before that, Primo Toys was nearing bankruptcy, just like many other startups. Crowdfunding has become an effective way to gain capital and keep operations running. Yacob says that the community can be very supportive as long as you remain clear with your goals.
It is also important that you know how to market your company, as this is an essential part of the process. “Digital advertising has transformed the world of marketing,” according to Maryville University's breakdown of their online course. Reactive business policies targeting consumer behavior and the digital expertise to carry out these campaigns are effective ways to reach new markets and get that much needed investment. After all, crowdfunding is essentially selling and marketing an idea to people so that it can reach the consumer market.
- Connect with angel investors and venture capitalists
Seeking out angel investors is one of the most time-tested ways to raise capital. The 1871 blog previously noted that angel investors typically provide $25K - $100K and are often family members or friends. They are low-risk compared to venture capitalists who tend to propose more complex deals and require a substantial amount of equity in return for their investment.
Before diving in, understand that there is no shortcut to getting your product out there on the consumer market. With patience, hard work, and a stream of good ideas, your brand may soon be leading the change in the future of education. But you just need to know which avenues to go down to get there.
The opinions expressed here by 1871 guest writers are their own, not those of 1871.