Massachusetts Builds Diverse Edtech Sector, Still Seeks Big Wins
Massachusetts has long been known as a hub for both software and education. Now, a growing cluster of companies has emerged at the intersection of those two industries—but the local education technology sector seems to be searching for an identity.
A recent study of Massachusetts businesses found more than 400 education-related companies that employ at least 20,000 people in the Bay State.
“Even though it’s not a giant cluster of employment, it’s a moderately healthy one,” says Jean Hammond, a co-founder and partner at Boston-based LearnLaunch, which produced the report with the help of Consulting Services for Education (CS4Ed).
Four-year-old LearnLaunch runs an edtech startup accelerator, a co-working space, and related events. It’s one of the local organizations trying to help edtech companies take advantage of trends in the broader industry. Among them: K-12 schools and higher education institutions are incorporating more digital learning tools into the classroom, online education is on the rise, and investors are pumping more money into edtech. About $3.3 billion was invested in edtech firms worldwide in 2015, up from $2 billion in 2014 and $644 million in 2011, according to CB Insights data. (It’s worth noting there has been a pullback in edtech investing this year, which CB Insights attributes in part to fewer “mega-rounds” of $100 million or more.)
LearnLaunch and CS4Ed primarily used LinkedIn, online surveys, and phone interviews to gather data about the Massachusetts edtech scene. The report used a broad definition of edtech that included companies and nonprofits working on “creating, developing, researching, or managing technological processes or resources that were connected to the improvement of formal or informal learning or educational activities.”
|Massachusetts Edtech Companies
A sample of players in the local edtech scene:
|Small (Under 100 local employees):||BetterLesson, FableVision, Muzzy Lane, Panorama Education, Six Red Marbles|
|Medium (100 to 500 local employees):||Curriculum Associates, edX, McGraw-Hill Education, Rosetta Stone, Victory Productions|
|Large (Over 500 local employees):||Cengage Learning, EBSCO Publishing, Houghton Mifflin Harcourt, Pearson, WGBH|
The report included firms with headquarters in Massachusetts, as well as those that have a local outpost. Many of the companies on the list are focused explicitly on edtech products and services—digital curriculum and content, learning assessments, data collection, professional development, online courses, and tutoring.
For others on the list, education comprises only a piece of their business. And some companies were included because they provide the “technology infrastructure” to deliver educational products and services, but most people wouldn’t consider them to be edtech; cybersecurity firm Symantec and marketing software company Constant Contact made the list, for example.
The local list includes edtech startups (BetterLesson, Hstry, Panorama Education), medium-size firms (Curriculum Associates, Victory Productions), large publishers (Cengage Learning, Houghton Mifflin Harcourt, McGraw-Hill Education, Pearson), big tech companies (Google, Amazon, Microsoft), nonprofits (edX), and more.
There are about 225 “pre-revenue” edtech startups in Massachusetts, the report estimates.
“Some of them are starting to acquire decent funding and persist,” Hammond says. “Obviously a few of them will always go away—that’s the nature of the early-stage beast.”
The report estimates there are 128 small to medium edtech-related companies that employ up to 50 people each, and 58 “established” edtech firms that each employ more than 50 people.
Hammond says she’s encouraged by anecdotes she hears about talent flowing between various edtech companies in the state, an indicator of the local sector’s vibrancy. “There’s pretty good competition from some of the growing companies for employees,” Hammond says.
The Boston area has all the right ingredients for a thriving edtech sector, says Jeff Bussgang, a general partner with local venture capital firm Flybridge Capital Partners. (His firm’s edtech investments include Codecademy, Open English, and Boston-based Valore.) Those elements include a deep pool of talent in both software and education, the presence of large publishers of textbooks and other educational materials, plenty of venture capital, and a long roster of K-12 schools and research universities that can serve as early technology adopters and customers.
But the area has yet to fully capitalize on its edtech potential, Bussgang says. “There’s been no breakout edtech company in Boston,” he says.
He mentions edtech firms in other locales like … Next Page »