Knewton, a New York-based online education company, has raised $12.5 million in third-round funding. FirstMark Capital led the round, and was joined by return backers Accel Partners, Bessemer Venture Partners, First Round Capital and Reid Hoffman.
Knewton, a leading educational technology company, announced today that it has completed a $12.5 million round of funding led by FirstMark Capital, a New York City-based venture capital firm with a strong foothold in the City’s tech and entrepreneurial communities. Returning investors include Accel Partners, Bessemer Venture Partners, First Round Capital, and angel investor Reid Hoffman. Knewton’s new financing will accelerate expansion to meet the surging demand for its adaptive learning engine, which uses proprietary algorithms to identify and address each student’s unique needs.
“As the demand for online learning continues to explode, we believe Knewton will fundamentally transform the test prep industry and then the broader education market with its industry-first adaptive learning engine,” said Amish Jani, Managing Director at FirstMark Capital and newly appointed member of Knewton’s Board of Directors. “Knewton perfectly aligns with FirstMark’s investment strategy: to invest in visionary companies with game-changing technologies and exceptional management teams; and to aggressively support the growth of New York City’s investment and entrepreneurial community.”
Knewton’s platform brings the full power of data mining to online learning for the first time. It tracks virtually every action by every student and accordingly prioritizes concepts for study each day based on which concepts a student is weakest in. It then delivers those concepts in whatever learning modality is best for that individual student, such as bite size, media format, time of day, and the number and difficulty of accompanying practice questions. Knewton has brought this innovation to market with a suite of test prep products, and is now working on opening the platform for anyone to use. This technology can be applied to a broad range of educational markets.
“It’s been a watershed year for Knewton. Our revenues have been doubling every quarter, our customer satisfaction scores are as high as Apple’s, and our adaptive learning technology is proving to be even more powerful than we anticipated at this stage,” said Knewton Founder and CEO Jose Ferreira. “Knewton students are achieving tremendous score improvements, and we’re excited about our next go-to-market strategy: opening our platform and letting anyone power educational content with our adaptive learning technology.”
In March 2010, Knewton unveiled its SAT prep course powered by the company’s proprietary adaptive learning engine.
Knewton has developed the industry’s first adaptive learning engine, powering customized educational content to meet the individual needs of each student. Knewton delivers content matching each student’s ideal learning arc and preferred medium. Knewton’s GMAT prep, LSAT prep, and SAT prep courses provide live and on-demand instruction from the country’s brightest and most experienced teachers, powered by an adaptive learning engine that targets a student’s individual strengths and weaknesses. Knewton was founded by Jose Ferreira, a former executive at Kaplan, with funding from Accel Partners, Bessemer Venture Partners, FirstMark Capital, First Round Capital and prominent angel investors. Knewton plans to apply its online adaptive learning to a wide range of education markets. For more information, please visit www.knewton.com.
About FirstMark Capital
Based in New York City, FirstMark Capital invests in ground-breaking companies that are creating new markets with innovative technology solutions or fundamentally changing existing markets by applying a fresh approach and new business model. A venture leader with nearly $2 billion in capital commitments, FirstMark’s team of investment and operations professionals have decades of real-world experience and leadership in core technology markets, making the firm uniquely qualified to offer industry insight, relationships and the operational expertise to build lasting businesses. Select current investments include: Netgear, Inc.; First Advantage Corp.; StubHub, Inc (Acquired by eBay, Inc.); Netegrity, Inc. (Acquired by CA Inc); Flarion, Inc. (Acquired by Qualcomm, Inc.); OutlookSoft Inc. (Acquired by SAP AG); Vallent (Acquired by IBM) and Navic (Acquired by Microsoft). Current investments include: SecondMarket, Riot Games, Dovetail, Knewton, Conductor, Clickable and Lumos Labs. For more information, please visit http://www.firstmarkcap.com. For more thoughts on the Knewton investment, please visit Amish Jani’s blog http://ajnyc.wordpress.com.