Ed-tech start-ups envision L.A. as a hub for the growing sector

The Los Angeles tech scene has spawned numerous e-commerce websites, dating and messaging apps, and online video companies, but a growing contingent of start-ups wants the attention to shift to a new sector: educational technology.

Better known as ed-tech, the term includes online math and language programs, Web-based grade books that help parents and teachers communicate, and games and mobile apps that teach children how to code. In short, ed-tech is anything that fosters learning in new and creative ways, for people of all ages.

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FOR THE RECORD:

Education start-ups: In the July 8 Business section, an article about educational technology said that Age of Learning Inc. developed an animated reading program for children called ABCmouse.com. The program also teaches subjects including math, art and social studies.
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Interest in ed-tech has grown as technology — and accessibility to it — has improved. Supporters say ed-tech not only enhances traditional learning experiences within the classroom, but gives people the freedom to learn wherever they want, however they want.

The best-known hubs are in Silicon Valley and New York City, but the blossoming tech scene in L.A., with its strengths in animation and entertainment, has even more potential to improve how students learn, they say.

"If you look at what some of the best educational technology does, it integrates things that appeal to students — things like gamefication, video games and compelling narratives," said Sean Arian, vice president of innovation and emerging technologies at the L.A. Area Chamber of Commerce. "When you think about those things, L.A. does them better than anything else."

In the last few years, the region has become home to several so-called edu-tainment apps and games.

One example is CodeSpark, based in Pasadena. The 1-year-old company created an online game called the Foos, which teaches children ages 5 to 8 to code with the help of friendly animated creatures.

"We felt really strongly that computer science literacy is the new literacy that all kids need," said co-founder and Chief Executive Grant Hosford. "It's not that we think all kids need to grow up and be programmers. We do believe that all kids should be able to leverage their own interest with technology."

The region's diverse talent pool has been a boon for Age of Learning Inc., an 8-year-old Glendale company that developed an animated reading program called ABCmouse.com for children ages 2 to 7. Creating high-quality animation with top-notch music and strong voice-overs is "not an easy thing to do, but easier in L.A. than anywhere else," said Zachary Katz, senior vice president of corporate development.

Engrade, a cloud-based platform that unifies school districts' myriad software and systems, found a home in Santa Monica about five years ago. The company, which started as a simple online grade book for teachers, has gained several large clients, including the Los Angeles Unified School District. In 2014, Engrade was acquired by McGraw-Hill Education, one of the largest educational publishers.

"There's a lot of changes underway in education, and I think that technology is certainly one that has a tremendous amount of promise," said Zach Posner, senior vice president at McGraw-Hill Education and co-founder and CEO of Engrade.

In the 2012-13 school year, the U.S. market for education software and digital content and resources totaled $8.38 billion, according to a report from the Software & Information Industry Assn. That was a 5.1% increase over $7.97 billion in 2011-12, the trade group said.

Still, there have been significant hurdles to getting ed-tech off the ground in L.A.

L.A. has fewer venture capitalists interested in funding ed-tech, said Mark Eastwood, founder and chief executive of Campus Steps, an online college counseling and preparatory platform. Most of the money, he said, is flowing to Silicon Valley.

According to research firm CB Insights, global investments in ed-tech totaled $3.94 billion last year, but just $30 million of overall ed-tech funding went to Southern California companies. About 15%, or $428 million, went to companies in Silicon Valley.

Another challenge is that ed-tech investments often take a while to pay returns.

Posner of Engrade said he didn't even try to look for funding in L.A. Instead, he relied mostly on investors outside the region, including an ed-tech venture capital firm based in New York.

Ed-tech could attract new investors as interest in Silicon Beach continues to grow, said Arian, who works with fledgling tech companies through the Bixel Exchange, a start-up development program serving the L.A. area. The program works with roughly 150 start-ups, about 5% of which are in ed-tech.

"The more tech start-ups in L.A., the more funding that will be attracted to L.A.," he said. "The better for funding all companies, including ed-tech."

It's not just about the money, though. For an ed-tech hub to develop, entrepreneurs say, local teachers have to be involved.

In Silicon Valley schools, teachers are willing to explore and try new technology in their classrooms. And that happens when there is more support for tech through the school district or when teachers feel energized about tech use in the classroom, said Betsy Corcoran, co-founder and chief executive of EdSurge.

Eastwood of Campus Steps said an ed-tech product must have wide appeal to students, parents, teachers, principals and district leaders to get consideration. He said Campus Steps is in 58 Los Angeles Unified schools and will soon expand to 400. But getting the district on board took 18 months.

"They've had some technology flops," Eastwood said. "They're very skittish about trying new technology and it's very skittish about the companies providing them."

Brendan Finch saw how classroom technology use varied greatly from school to school during his seven years as a teacher. At one Los Angeles Unified charter school, there were no working laptops, only a computer lab. At another charter school in the district, all teachers used technology in their lesson plans.

His teaching experience led him to create BirdBrain Education, which offers online science articles at multiple reading levels.

"The most beautiful thing about ed-tech is, instead of the teacher walking them through one thing or one article, every single student can be doing something totally different and achieve the same objective at the end of the lesson," he said. "It wasn't really possible before."

samantha.masunaga@latimes.com

Twitter: @smasunaga

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