Riiid Inc, a South Korean AI tutorial start-up, announced Monday it has raised $ 175 million from SoftBank Group Corp’s Vision Fund 2 (9984.T) in a bid to shake up the world of standardized testing and disseminate its technology in public schools.
Education technology venture capital funding has increased with the pandemic to $ 16.1 billion globally in 2020, from $ 7 billion in 2019, according to research firm HolonIQ. Most of that funding has been spent on services consumers have to pay for, such as China’s Zuoyebang online tutoring service, which raised more than $ 1.6 billion at the end of last year.
Startups targeting public schools, especially in the United States, have had a harder time securing venture capital, which often cited the difficult sales landscape. Critics say the pandemic and technology have widened the education wealth gap even further.
Riiid’s AI tutor started making money in Japan and South Korea with test preparation services for the TOEIC English assessment test. It also allows its technology to test prep companies and companies looking to create training programs for employees.
Standardized tests like the SAT and ACT have been seen as perpetuating inequalities as well-to-do families can afford expensive guardians. Riiid executives believe the testing industry needs to be shaken up, and AI test prep platforms that offer real-time assessment of student progress can eliminate stressful one-time tests that are costly and can last for hours. hours. The company is trying to bring this technology to public schools, said CEO YJ Jang.
âIt will be paid for by school districts and students will not have to pay at all,â Jang said, adding that he expects the first US school districts to use this technology to be announced before June of l. ‘next year.
Anupama Vaid, founder of teacher-parent communication app ParentSquare, said the pandemic has accelerated long-term changes in education. She believes the new government funding allows schools to invest in electronic technologies.
Canadian start-up Paper, which offers 24/7 chat access to tutors for students in school districts who purchase the service, also experienced good traction, said CEO Philip Cutler, a former teacher who has seen first hand the iniquity caused by private tutoring. “We want to give all of these students the same rules of the game,” he said.
BookNook, an Oakland-based startup that uses an AI platform to help teach students to read, even offers school districts with substantial subsidized meal programs a bigger discount on the service because they are considered more economically disadvantaged, said CEO Michael Lombardo.
All three companies have seen the fundraising environment improve, and Paper and ParentSquare have raised funds during the pandemic, although it is still only a small fraction of what Riiid has been able to raise.
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