Reach Edtech Outlook 2017

1. a Reach K-12 Edtech Outlook 2017

2. Reach supports the most promising entrepreneurs developing technology solutions to address challenges in early childhood, K-12 and higher education. We invest in early-stage companies that develop tools, applications, content, and services to improve education opportunities for all children. 2© 2017 Reach Capital. Confidential. All rights reserved. About Reach Capital

3. 3 At Reach, we believe in... Learning that... Technology that... ● Have a sense of purpose and actively pursue it ● Are empathetic, caring, and connected ● Work together to solve problems and improve the world ● Enables and respects a person’s agency and voice ● Exposes one to broad perspectives, places, and challenges ● Enables meaningful human interaction ● Minimizes boundaries and deepens connections between people ● Enhances and scales effective practices ● Increases access to quality education Communities where people... © 2017 Reach Capital. Confidential. All rights reserved.

4. a Education is at an inflection point Tech-enabled learning is here

5. 5 Digital immigrants learned to use computers in the workplace Digital immigrants learned to use computers for school Digital natives grew up with computers, video games, and social media Mobile natives always connected; integral part of life BABY BOOMERS 1946 – 1964 MILLENNIALS 1981 – 2000 GEN X 1965 – 1980 GEN Z 2000+ © 2017 Reach Capital. Confidential. All rights reserved. Today's students are mobile and always connected Photo sources: Express Newspapers 2015, Mr. Martin's Web Site, MacStories 2017, Independent Digital News & Media 2017

6. 6© 2017 Reach Capital. Confidential. All rights reserved. Then Now 67%of millennials agree they can find a YouTube video on anything they want to learn Learning is now bite-sized, on-demand, and accessible anywhere Think with Google Photo sources: Amazon, Buzzfeed

7. a K-12 schools are making headway

8. 8© 2017 Reach Capital. Confidential. All rights reserved. PC Revolution Begins: first computers in school 1:5 Computer:Student 2:3 Computer/Tablet:Student 1977 2000 2016 NCES Schools are moving rapidly to one device per child Photo sources: Computer History Museum, Ben Schumin, Google

9. 9© 2017 Reach Capital. Confidential. All rights reserved. of state-mandated tests in 2016 were available in a digital format Then Now 85% EdTech Strategies Online test policies drive schools' tech investment Photo sources: Military OneSource, Education News

10. a 10 New Devices Shipped to Schools Low-cost devices meet school demand © 2017 Reach Capital. Confidential. All rights reserved. • 20M Chromebooks are used by students and teachers weekly • Microsoft offers suite of low-cost devices starting at $189 • Apple launches a $299 iPad for education New York Times

11. a Classrooms are connected but need more bandwidth

14. 14© 2017 Reach Capital. Confidential. All rights reserved. … but more bandwidth is needed 22%but only of districts have enough bandwidth for 1:1 learning 94%of districts have enough bandwidth for online testing EducationSuperHighway Photo sources: Education News, Edsurge

15. ADMIN SOFTWARE - Internet access expands applications - Focus on backend systems and compliance HARDWARE - Computer lab era - 90% of edtech spend is hardware - Apple dominates in schools CONNECTED CLASSROOMS - Proliferation of low-cost devices - Student apps take off 15© 2017 Reach Capital. Confidential. All rights reserved. With connected classrooms, edtech broadens focus to instructional resources and content 1990s 2000s 2010s

16. a Content is breaking free of the big publishers

19. © 2017 Reach Capital. Confidential. All rights reserved. 19 Digital materials will soon overtake print in U.S. 89% of school technology leaders expect instructional materials to be at least 50% digital within three years BMO

20. 20© 2017 Reach Capital. Confidential. All rights reserved. Digital content frees us from static textbooks thousands of sources4 major publishers district-prescribed curriculum teacher-curated content adapted in real-time7-year adoption cycles Photo source: G.I. Jobs

21. • Lessons, assessments, and activities are unbundled • Anyone can publish • Purchases made by subscription or on-demand Content marketplaces disrupt established publisher model 21© 2017 Reach Capital. Confidential. All rights reserved.

22. 22 Teachers Pay Teachers marketplace upends traditional publisher model teachers in U.S. downloaded at least one resource from TPT total earned by teacher authors on TPT in 2016 $100M 14 teacher authors have earned over $1M on TPT 2 3out of Teachers Pay Teachers © 2017 Reach Capital. Confidential. All rights reserved.

23. a Over past 3 years • S&P 500 up 24% • Pearson down 58% • Houghton Mifflin down 32% 23 Publishers are on the decline Jan 2015 Jul 2015 Jan 2016 Jan 2017 Jul 2016 Jul 2017 PercentChange © 2017 Reach Capital. Confidential. All rights reserved.

24. a Teachers drive rapid adoption and enable new business models

25. 25© 2017 Reach Capital. Confidential. All rights reserved. Teachers drive viral growth of ed tech products 40M monthly active users 20M users in 3 years 90% of schools in 5 years Edsurge, Edsurge, ClassDojo

27. 27© 2017 Reach Capital. Confidential. All rights reserved. Decision-makers rely on teachers and increasingly students for edtech recommendations 100%of superintendents 95%of principals Improving Edtech Purchasing Rely on end-user recommendations for K12 edtech purchase decisions

28. 28 Teacher choice Abundance of digital resources © 2017 Reach Capital. Confidential. All rights reserved. Massive user adoption Upsell to schools / districts Upsell to families Premium featuresFree product Freemium business models are behind the fastest growing edtech products

29. ENTRY POINT Sell to school- and district-decision makers, who push product down to classrooms Product is free for teachers and students who drive school- and district-level purchases CONTRACT SIZE $10K+ / district $1K - $5K / school SALES CYCLE 6-9 mo < 3 mo SALES REPS Field-sales ($$$) Inside-sales GROWTH Driven by field-sales Driven by teachers 29© 2017 Reach Capital. Confidential. All rights reserved. Freemium flips traditional top down sales model TOP DOWN Institutional sales BOTTOMS UP Freemium institutional

31. Teacher-love drives growth and school sales for Newsela 31© 2017 Reach Capital. Confidential. All rights reserved. Newsela Teachers love product and evangelize High teacher engagement enables sale to schools Viral growth driven by social media Teachers & students access for free High quality, leveled news articles engage students Schools pay for analytics and other high-value features

33. 33© 2017 Reach Capital. Confidential. All rights reserved. Parents and kids first learn about Epic in school and bring it home to continue reading Families learn about Epic from teachers Families purchase Epic for home use Teacher referral builds parental trust in brand Students use Epic at school for free Students access thousands of books in digital classroom libraries Parents support and reinforce reading behaviors at home

34. a How has this impacted learning? We’re getting better and better at doing what we’ve always done.

35. 35 Technology super-charges student writing © 2017 Reach Capital. Confidential. All rights reserved. Manual typewriters Student writing looks professional Electric typewriters Publishing is faster and easier Chromebooks, Google Apps, AI Writing is collaborative and feedback rich Desktops, MS Word The writing process is digital and iterative BABY BOOMERS 1946 – 1964 MILLENNIALS 1981 – 2000 GEN X 1965 – 1980 GEN Z 2000+

36. 36 Tech-enabled instruction is multimedia, two-way, and differentiated © 2017 Reach Capital. Confidential. All rights reserved. Chalkboards Teachers supplement lectures with visuals Whiteboards Students with allergies spared from chalk dust Sync’d student devices Students receive differentiated content and can respond in real time Interactive whiteboards Teachers supplement lectures with multimedia BABY BOOMERS 1946 – 1964 MILLENNIALS 1981 – 2000 GEN X 1965 – 1980 GEN Z 2000+ Photo sources: Slate, NY Post, IntMath Valley View Elementary

37. 37© 2017 Reach Capital. Confidential. All rights reserved. While tools have improved, today’s classroom experience can still feel surprisingly old-school BABY BOOMERS 1946 – 1964 Hairspray set in 1962 GEN X 1965 – 1980 Fast Times at Ridgemont High 1982 MILLENNIALS 1981 – 2000 High School Musical 2006 GEN Z 2000+ Photo sources: Hairspray, New Line Cinema; Fast Times at Ridgemont High, Universal Pictures; 10 Things I Hate About You, Buena Vista Pictures, WYPR Sparrows Point High School, MD 2017 TODAY’S CLASSROOMHOLLYWOOD IMITATES LIFE

38. a Now consider workplaces of the future ... automated by robotics, artificial intelligence and machine learning ...

39. 39 The nature of work changes as more and more activities are automated McKinsey 81% Predictable physical activities 69% Processing data 64% Collecting data Work activities with the highest automation potential © 2017 Reach Capital. Confidential. All rights reserved.

40. a Workers will need to work more closely with technology … and acquire new skills that will be in demand in the new automation age McKinsey Global Institute

41. a “Automation could make us all more human” 41 Automation creates opportunity for workers to make use of innately human skills Top skills needed in 2020 Developing others Problem solving Emotional intelligence Creativity McKinsey, World Economic Forum Photo sources: BeanCap, LuxeBeat © 2017 Reach Capital. Confidential. All rights reserved.

42. a We believe that now is an opportunity to transform learning

43. a Reach poses a challenge to the edtech ecosystem: How might we… … harness technology to change learning and help people meet the next generation of opportunity?

44. 44© 2017 Reach Capital. Confidential. All rights reserved. How might we... Increase access to educational opportunity? Streamlined school choice and enrollment Free digital library with over 25K+ titles for schools Platform that enables non-literacy specialists to support struggling readers

45. 45 Presents sets of news articles that examine personal identities from diverse communities Students around the world collaborate on projects about language, culture, & global issues © 2017 Reach Capital. Confidential. All rights reserved. Animates and publishes stories of students’ personal struggles in their own words How might we... Expose students to new perspectives?

46. Connects students with industry professionals 46 Connects students with peers who have faced similar challenges Connects students with alumni mentors © 2017 Reach Capital. Confidential. All rights reserved. How might we... Make meaningful connections between people?

47. 47 Students produce videos using Green Screen by Do Ink © 2017 Reach Capital. Confidential. All rights reserved. Students express themselves and learn from others on Flipgrid Students write for a global audience on Pobble How might we... Give students a voice and a real audience?

48. 48© 2017 Reach Capital. Confidential. All rights reserved. problem solving learning how to learn critical thinking creativity collaboration How might we... Teach skills essential for personal success and societal impact?

49. a Frontier technologies help educators to do what educators do best

50. a 50 Chatbots scale student support from enrollment to graduation AdmitHub AdmitHub offers 1:1 student support at scale through AI-powered mobile messaging REAL-TIME, PERSONALIZED SUPPORT - Sends nudges - Gathers important data - Fields FAQs AVAILABLE 24/7 - Meets students on mobile - Answers questions instantly CONNECT - Students are connected with empathetic college counselors for more meaningful conversations 90%Of students engaged with the Chatbot in Georgia State’s first year Photo Source: AdmitHub © 2017 Reach Capital. Confidential. All rights reserved.

51. a “I love Pounce, it’s not pushy.” “I like how convenient it was. I didn’t have to look through my emails. I just went to text.” 51 Students love AdmitHub, especially those who are underrepresented Summer Melt Case Study, AdmitHub © 2017 Reach Capital. Confidential. All rights reserved. 32% Greater engagement from traditionally underserved Pell Grant population 94% Of students recommended AdmitHub’s chatbot for future students

52. 52 AdmitHub helps scale 1:1 support and frees counselors to focus on critical conversations AdmitHub Of the 185,211 messages sent, less than 1% needed university staff intervention “We would have had to hire 10 full-time staff members to do the amount of messaging that ‘Pounce’ did.” —Scott Burke, AVP for Undergraduate Admissions at Georgia State University (GSU) When’s the housing deadline? Which parent do I use on FAFSA? When will I know if I got accepted? This is my dream school, but I don’t think I can afford it. © 2017 Reach Capital. Confidential. All rights reserved.

53. 53 AdmitHub’s real-time, tailored support improved enrollment outcomes at Georgia State University How an Artificially Intelligent virtual assistant helps students navigate the road to college +3.3 percentage points 21.4% Decrease in Summer Melt 16.9% Increase in flawless FAFSA 14.9% Increase in loan counseling © 2017 Reach Capital. Confidential. All rights reserved.

54. a 54 With AI-assisted grading, educators can give constructive, timely feedback en masse Gradescope streamlines the tedious parts of grading so educators can focus on what they do best: giving great feedback HOW IT WORKS - Students submit work online, or educators scan & upload - Using AI, Gradescope automatically groups similar responses - Educators provide granular, constructive feedback for the group of responses all at once Handwriting recognition and AI automatically group similar responses Constructive feedback provided by educators at scale © 2017 Reach Capital. Confidential. All rights reserved.

55. 55 AI-assisted grading transforms grading -- and learning! “The course is much better off because we are able to implement this type of frequent assessment and give students better feedback, all within 24 hours.” Chris Mayfield James Madison University "I feel like my life has changed. Not only did [Gradescope] cut down the time drastically, the quality of the end result was dramatically better … It resulted in a grading criteria that was so clear, structured and consistent that the students also enjoyed it." Samuel Dickerson University of Pittsburgh “Gradescope has revolutionized how instructors grade homework and exams. I don’t use that word a lot, but once you’ve used this tool, there’s no going back.” Armando Fox, UC Berkeley © 2017 Reach Capital. Confidential. All rights reserved.

56. a TeachFX provides teachers analytics and insights on classroom dialogue HOW IT WORKS - Teachers record their lesson using a mobile app - Voice analytics technology distinguishes voices of different speakers - Teachers see a visualization of speech patterns over the course of a class 56 Voice analytics provide insights that can help teachers facilitate more student dialogue I decided to adjust my curriculum to include more simulations and focused discussions … The students were more engaged than I had seen them all year. Students were speaking over 80% of the class! Lucas Richardson History teacher, Pembroke Hill, MO I thought student talk was going to be a lot more. Seeing the quantitative data was shocking at first. I want to improve, to raise my student talk percentage. So I'm working toward that. Matt Hicks English teacher, Rockhurst High School © 2017 Reach Capital. Confidential. All rights reserved.

57. 57 Together, we can create communities where people - have a sense of purpose and actively pursue it - are empathetic, caring, and connected - work together to solve problems and improve the world Photo sources: The Teaching Channel, Mystery Science, Tinkergarten, YouCubed

58. 58 Join In @reachfund info@reachcap.com Submit your company Search EdSurge's job index Follow Us Work in EdTech Build a Company https://medium.com/ @reachfund http://www.blended.blog/ © 2017 Reach Capital. Confidential. All rights reserved.

59. a Thank You

Reach Edtech Outlook 2017

Chian Gong

Reach Edtech Outlook 2017