SV Leaders Invest $3M in Hybrid Education

Source: VentureBeat, May 2011

They’re among a dozen or so Silicon Valley personalities who’ve put money into Rocketship Education this year. Rocketship is a network of “hybrid” charter schools that put kids in front of computers for a large amount of the school day. Many in the education industry hope Rocketship’s model will prove Silicon Valley can disrupt (and make money in) the k-12 school system.

That’s a tall order, given more than a decade of poor returns in k-12 ventures. In fact, in 2009, Bill Gurley told me he wouldn’t invest in education anymore because there’s no market for it in the U.S.  That hasn’t yet changed. Regarding the Rocketship money, he clarifies that “this is a donation—not a VC investment.”

But Rocketship CEO John Danner is hoping he can convince investors to make bets, and not just gifts. “K-12 technology in particular has been one of the worst outcomes for venture capital,” Danner admits. “It’s really been miserable for startups to get any traction. One thing we need to do is learn how to make the distribution system a lot more frictionless.

Danner hopes to demonstrate that the evolution of technology is transforming education into an industry where venture capitalists “can both do good and do well. Once we get there we will unleash an enormous amount of capital on the problem.”

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