Flood of Investment, Products Stirs Fears of Education 'Tech Bubble'

Karim Kai Ani, who founded the educational technology startup Mathalicious, takes notes while working on a project that uses toppings and prices of pizza to explain the fundamentals of linear functions to students.

—Stephen Voss for Education Week

Rush of investment, products mirrors 1990s, some warn

By Michelle R. Davis

Educational technology companies and entrepreneurs may face the risk of a "tech bubble," similar to the massive boom-and-bust that rocked the technology market in the late 1990s, according to market analysts and a recently released paper.

A relatively new focus on K-12 educational technology as an investment vehicle, a surge of investors looking to cash in on the latest innovations, and fewer barriers to developing an ed-tech business have merged in ways that have some market observers wary of what's ahead.

The flurry of activity is prompting comparisons to the dot-com crash of the late 1990s, which brought the failure of many technology-related businesses that had drawn huge sums...