Silicon Valley Turns Its Eye to Education

The education technology business is chock-full of fledgling companies whose innovative ideas have not yet proved effective -- or profitable. But that is not slowing investors, who are pouring money into ventures as diverse as free classroom-management apps for teachers and foreign language lessons for adult learners.

Venture and equity financing for ed tech companies soared to nearly $1.87 billion in 2014, up 55 percent from 2013, according to a new report from CB Insights, a venture capital database. The figures are the highest since CB Insights began covering the industry in 2009. While rising sharply, the values of ed tech financing deals are chump change compared with the money flowing into consumer software. The smaller sums going into ed tech illustrate the challenges facing start-ups as they try to persuade public school systems to adopt their novel products. Companies often must navigate local school districts with limited budgets and slow procurement processes. To bypass the bureaucracy, many start-ups are marketing free learning apps and websites directly to teachers in the hopes that their schools might eventually buy enhanced services.