The dollar figure is small compared with other venture capital investments in the region, but the high-profile investors behind the deal represent a heady endorsement for a local upstart that operates well outside tech-centric Silicon Valley.
“These are the best investors in the world for what we’re trying to build,” said EverFi chief executive Tom Davidson. “These guys have built very significant, international networks of millions of people.”
Founded in 2008, EverFi provides public school systems and colleges with online programs that teach students life skills often missing from classroom curriculums. The firm has grown from a handful of employees to nearly 100.
Davidson said the firm’s programs reach nearly 4 million students across the country and tackle topics such as how to build positive credit and the ramifications of sending suggestive text and photo messages.
Davidson and investors say those subjects can be a direct impediment to learning yet many schools strain to focus on issues beyond academics.
“There’s so many demands on [schools] to teach to the test and focus on certain portions of the curriculum, [EverFi] is really addressing these aspects,” said Michael Walden, a venture partner at investor Rethink Education.
EverFi has managed to circumvent the biggest challenge for companies that count on customers in public education, especially in low-income areas with limited resources: getting schools to pay for the content.
The firm finances its high school programs through grants from corporations, foundations and wealthy individuals. (EverFi sells its college programs directly to universities.)
Davidson acknowledges that a business model dependent on third parties for payment can be hit-or-miss. But the contributors are often acting in their own best interest — for example, when a commercial bank sponsors a financial literacy program.
“There is an investment for these companies in making an impact on their community and growing customers,” Walden said. “It’s not just a giveaway.”
The latest funding round will allow the company to add new tutorials, reach additional school systems and hire employees for its Washington, Chicago and San Francisco offices. EverFi has raised $21 million from investors to date.
The Washington area has proved to be fertile ground for technology companies targeting education. In addition to the region being home to Congress and federal regulators, Washington boasts some of the industry’s big players, including BlackBoard, K12 and Sylvan Learning. (The education firm Kaplan is owned by The Washington Post Co.)
“You’re seeing, probably, the biggest, most aggressive financing environment for education start-ups that we’ve ever seen,” Davidson said. “People see it as one of the last great . . . markets that’s ripe for disruption.”