Rethink Education announces strategic partnership with nonprofit NewSchools Ventures Fund and appropriates portion of profits to the philanthropy
NEW YORK, May 1, 2013 /PRNewswire/ -- Education technology venture capital fund Rethink Education has entered into a strategic partnership with nonprofit NewSchools Venture Fund, contributing a significant portion of the fund's carried interest to the San Francisco-based philanthropy. The partnership will last for the life of the fund, a total of 8 years.
"We see a critical shortage of early-stage and growth capital entering the space, and recognize the need for a variety of funding opportunities that can accommodate a range of interested investors," says Rethink Education managing partner Rick Segal. "This marks an unprecedented step in the alignment of public and private education investors, and a powerful alliance between the two booming education technology centers of New York and San Francisco."
Education, currently the third largest segment of the economy behind health and energy, received only 0.3 percent of the total U.S. capital market dollars, and 1 percent of venture capital funding between 1995 and 2011. However, education investment is heating up quickly, with over $1.1 billion allocated for early-stage investment in 2012. The challenge will be investing those dollars in the companies that are best equipped to contribute to improved educational outcomes and productivity, and helping those organizations grow to scale.
The partnership leverages NewSchools Venture Fund's successful 15-year track record of working to close the academic achievement gap by supporting seed-stage companies and emerging nonprofit entrepreneurs, by matching it with Rethink Education's growth capital reserves and extensive investor network. "With a surge in the number of promising entrepreneurs and technology that's more pervasive and low-cost than ever before, we have a powerful opportunity to transform education so that it serves all students well," says Ted Mitchell, CEO of NewSchools Venture Fund. "This partnership with Rethink Education will fuel our ability to capitalize on this opportunity, by bringing capital and expertise to our country's most important sector."
Since 1998, NewSchools Venture Fund has aggregated philanthropic capital from individual and institutional donors, and provided both capital and hands-on management assistance to some of the country's strongest nonprofit and for-profit education organizations. "Our intention is to build upon NewSchools Venture Fund's robust network of education innovators and supporters by adding more extensive industry information and experience, greater resources, and new capital partners focused on the potential to harness technology to improve education," adds Rethink Education's venture partner Michael Walden.
Rethink Education managing partners Rick Segal and Matt Greenfield have extensive experience in education technology transactions and were involved as early-stage investors in Wireless Generation, which sold to News Corp. for $360 million, and with Schoolnet, which sold to Pearson for $230 million. Under the direction of Segal and Greenfield, Rethink Education will focus on both early- and late-stage companies in the NewSchools Venture Fund portfolio.
About Rethink Education
Rethink Education is an education technology venture capital fund investing in early-stage companies that have demonstrated success in implementing business models that leverage technology to re-imagine how traditional education is delivered. Rethink's investments include Education Elements, EverFi, Engrade, Pathbrite and StraighterLine.
About NewSchools Venture Fund
NewSchools Venture Fund is a nonprofit organization working to close the achievement gap by funding and supporting entrepreneurs who are creating innovative solutions to the problems in public education so that all children have the opportunity to succeed in college and beyond. Since its founding in 1998, NewSchools has invested $180 million in more than 70 nonprofit and for-profit educational organizations working to promote student achievement.
SOURCE Rethink Education
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