Smart Cities: Chicago is an EdTech Hotspot
Opinion
Education Opinion

Smart Cities: Chicago is an EdTech Hotspot

By Tom Vander Ark — January 01, 2013 3 min read
  • Save to favorites
  • Print
Email Facebook LinkedIn Twitter Copy URL
Tom Vander Ark
Tom Vander Ark is an education advocate, adviser, and author of Getting Smart: How Personal Digital Learning is Changing the World. He is Founder and Executive Editor of Getting Smart and a partner in Learn Capital.

This is part 2 in Smart Cities: Chicago series. View part 1 on Collaborative and Chaotic Reform Record here.

Education Industry
Chicago has a long history of learning innovation. DeVry launched career schools more
than 75 years ago and was one of the first to serve returning vets under the GI bill. Chicago is also home to Career Education Corporation which serves 90,000 students from 90 worldwide campuses and online. The
University of Illinois developed PLATO system, the first computer assisted
instruction system about 50 years ago.

“Chicago is a leader in the ‘profitable-but-boring’ category in the education sector,” as one local observer said. Those boring companies have been
fetching 5x revenue in recent transactions. Two Chicago-based big higher education services firms were acquired in October. Wiley bought Deltak, a
higher ed services firm, for $220 million.

Pearson purchased EmbanetCompass

for $650 million. Lead generator All Campus spun out from it’s parent in October. Last
October, Blackboard bought Edline (now Blackboard
Engage).

In the ‘speaking softly’ category, when you hear Follett you may think library, but the $3 billion private company
provides universities, schools and libraries a wide range of tools and services from content to e-commerce.

In the ‘wow, are they still around?’ category, Encyclopaedia Britannica and World Book are both headquartered in Chicago and both of are experiencing strong traction selling curriculum and
research products to school districts and libraries.

Start-Ups.
Chicago is home to a diverse range of companies leading the shift to digital:

NoRedInk
, which won the “innovation challenge” at Education Nation this year, was started by a Chicago teacher.

Investors and Bankers. “
Chicago-based funds have completed over 15 venture investments,” according to Christopher Nyren, “in the education market and
represent over $1.5 billion in combined assets under management.”

Leading venture investors and some of the education investments include:

“Chicago and Midwest funds have completed over 30 private equity investments in the education market and represent over $8.5 billion in assets under
management.” said Nyren, “No geography features more such experienced investors as right here withSterling, Riverside,Chicago Growth, Primus, HCP,Prairie, Prospect, Concentric, and more.”

Chicago is home to talented advisors and merchant bankers including Deborah Quazzo atGSV Advisors and Christopher Nyren and Todd Maurer at Educated Ventures.

“Overall tech space is getting hotter with the creation of Excelerate and 1871,
and the impact investing/angel investing is scene is growing centered around Impact Engine ,” said Ryan Blitstein.

Chicago rivals New York as an education industry leader and may be second to the Bay Area in edtech startups and funders. There are great universities and
foundations supporting innovation in early learning and afterschool. Aside from a few bright spots and despite strong philanthropic support and the
potential stability of mayoral control, Chicago Public Schools remains chaotic and largely impervious to the innovations and edupreneurs that abound in
Chicagoland.

Thanks to Christopher Nyren, Margot Rogers, Kemi Jona,
Patrick Haugh,

Ryan Blitstein and other contributors to this two part series. NoRedInk and AdvancePath are portfolio companies of Learn Capital where Tom is a
partner.

The opinions expressed in Vander Ark on Innovation are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.