Join us online at COVERGENCE OCT 22-23
The University Tech/Startup Gap Fund and Accelerator Summit
- 20 in-depth gap fund/accelerator program reviews
- Breakout and group discussions on common challenges
- Corporate and Investor partnering panels
- Networking web-site and associated materials
When Dana Stephenson began to court Arizona State University two years ago, he was looking for a higher ed client for his education technology startup. Instead the university wound up as one of his most important investors.
What began with faculty interest in Stephenson’s Canadian company, Riipen, which connects students with class projects offered by actual businesses, led to conversations with a university accelerator that invests in edtech startups and connects them with faculty to launch pilot programs. So far, its pilot has five courses that will lead to 243 student experiences.
“They didn’t want to do a small faculty-driven pilot,” says Stephenson, whose startup is based in Vancouver. “They wanted to do this right, which made it really exciting for us.”
Stephenson and Riipen are now among 19 companies to raise a total of $710,000 to date from ASU’s ScaleU accelerator, which started in 2016 under the more cumbersome name of the ASU Draper GSV EdTech Accelerator. Despite the name change, GSV and Draper Associates are still partners with the accelerator, says Bennett Dwosh, director of strategy and venture acceleration for ASU Enterprise Partners, the resource-raising arm of the university.
ScaleU exists at a time when edtech-focused accelerators, such as StartL, have come and gone as universities continue to launch programs to help fledgling companies. While some university accelerators and incubators focus on industries like life sciences, edtech specific accelerators with university ties currently operate, including StartED—which serves edtech entrepreneurs, faculty and students at New York University—and the Iowa EdTech Accelerator, launched in 2019, which counts the University of Iowa as a partner.
ScaleU accepts around five to eight companies each year, Dwosh says, and invests $10,000 to $50,000 per company at the start of the engagement in exchange for about .5 to 2 percent equity stakes and free or discounted services for ASU faculty conducted as part of the startups’ pilots. The money for ScaleU comes from operational funds within ASU Enterprise Partners earmarked for edtech companies that support the university’s mission.
The accelerator has already earned its investment back in two alumni companies—CampusLogic, which raised $55 million in 2018, and Gradescope, acquired by Turnitin the same year. ScaleU’s returns went to the academic and administrative groups that participated in the pilots.
Along with Riipen, other new additions to ScaleU’s portfolio include career discovery platform AstrumU, micro-internship simulator InsideSherpa and EX-IQ, which turns documents and audio files into interactives.
Companies selected for ScaleU are usually raising a late-seed or Series A round of venture capital funding. It’s discovered companies in a variety of ways, including at its annual ASU+GSV conference in San Diego. While ScaleU began with a cohort model of accepting a group of companies at once, it switched early on to a rolling acceptance to account for custom pilot program times.
Some tools have conducted pilots that lasted three months while more complicated ones, like those that deal with financial aid, require as much as 18 months. Riipen, for example, expects its yearlong pilot to conclude in August. “We want to be more nimble and helpful for the companies,” Dwosh says.
ScaleU finds faculty and staff to launch pilots for the startups in its accelerator and validate the product’s impact at scale. Sometimes, the ScaleU team has delayed implementing an interested startup’s products and services until the right use case emerges.
Dwosh says one key to gaining buy-in from staff, faculty and students is to get them involved as early in the semester as possible to avoid any interruption to work or studies. “We’re not looking to add tech for the sake of tech,” he says. “It has to solve the needs of the students.”
Going forward, Dwosh says that he’d like to work with more companies involved in retaining students and connecting students with work opportunities and potential employers. Administrative tools that help universities with growing online and offline populations also interest him.
ScaleU pilots that result in long-term relationships with the university are “more common than not,” he adds. Even if the pilot doesn’t result in ASU as a customer, entrepreneurs learn about how to improve their products and services. “There can be a lot of value in finding out what is successful and what is not,” he says.
For Stephenson, the Riipen CEO, ScaleU became helpful as an adviser with a direct path to proving the company’s platform. Riipen added to its projects library thanks to ASU’s business relationships and learned how to work with multiple departments within a university to better implement its platform. Once the pilot finishes, Riipen will have more proof of how its platform can meet the expectations of a university the size of ASU.
The lessons will prove important as Riipen spends some of its latest funding round, which a ScaleU participated in, to grow in the U.S. And after its pilot, Riipen hopes to expand its ASU partnership to include more student users. “Large institutions can be difficult to navigate,” he says. “You have to find the right champions.”