NEA Explains Why the Education Industry is Ripe for Disruption

New Enterprise Associates (NEA) is a global venture capital firm that helps entrepreneurs build businesses across many sectors, including education. They’ve invested in companies including Benchprep, Bridge International Academies, Coursera, Desire2Learn, Edmodo, Edupath,

Everfi, Learnup, and Subtext. NEA recently published a blog post by partner, Jon Sakoda, that examines the current education crisis and explained why the education industry is ripe for disruption.

NEA explained that one traditional barrier that caused many entrepreneurs to steer clear of education is that selling tech to schools and districts is complicated and expensive. Additionally, it is very difficult to prove that new tech is effective without a long-term and expensive study.

However, NEA explained that there are a few themes in education making the industry more attractive today for investors and entrepreneurs trying to instigate real change.

First, classroom walls are breaking down, the world is more connected, and online learning is more feasible around the world.

Secondly, educational content is now more readily available. The market is no longer held in the hands of a few large publishers. NEA cited Khan Academy, EverFi and BenchPrep as edtech startups providing more open access to educational content.

Thirdly, NEA explained that the ability to analyze big data makes it easier to personalize learning. Tools like Desire2Learn make it easier for schools and districts to gather and analyze massive amounts of data. The blog post noted that “Tennessee recently demonstrated the power of Desire2Learn’s statewide predictive analytics, lowering their annual dropout rate by 25% across 45 university campuses by looking at historical student data and identifying opportunities for faculty and administrators to intervene.”

The final theme called out in the blog post was that campuses are becoming global institutions, especially as countries like China, India and Brazil are investing more in education and are more able to access educational content from around the world. The blog post highlighted that the majority of students signed up for classes on Coursera are based outside the U.S.