Industry News

Pearson Commits $50 Million to Edtech Startups

By Cait Etherington
April 15, 2019

Pearson Education, an offshoot of the Pearson PLC, has announced a plan to share $50 million in funding to promising companies in the edtech sector. Learning tools,AR-based education solutions, and bootcamps are all on Pearson’s radar as they go shopping for potentially fruitful investments in edtech. While the launch of the company’s new venture capital arm may come as a surprise to some onlookers, in fact, it is just the latest chapter in the company’s long history of innovation.

Pearson Education

Pearson PLC was founded in the 1840s by Samuel Pearson in Yorkshire, England. For many decades, Pearson operated as a construction company, but in the 1920s, Pearson switched from construction and engineering to publishing. While the switch from bricks to books may have been unusual, the company would go on to become the largest textbook publisher in the world.

With change in its DNA, it is no surprise that as the publishing landscape started to shift in the face of emerging digital technologies, Pearson proved especially adaptable. By 1998, as many traditional publishers were facing dire financial troubles, Pearson had already created a new company, Pearson Education, and had started to rapidly scale its online products. Unlike many of its competitors, Pearson was not only quick to adapt to the growing demand for digital books but also among the first educational publishers to appreciate the potential of augmenting online textbooks with related digital content. The company’s foresight enabled it to survive the digital turn and to rapidly expand during the early 2000s. Pearson now owns a wide range of brands including Prentice Hall, which is just one of the traditional publishers that failed to adapt to digitalization and was subsequently acquired by Pearson.

Pearson Ventures Extends Pearson’s Commitment to Driving Innovation

The creation of Pearson Ventures (Pearson’s new venture capital arm) may be consistent with the company’s legacy of innovation, but so far, Pearson hasn’t revealed many details about its new venture.

A new page on the Pearson Education website states that with a $50 million commitment, which will roll out over three years, Pearson Ventures will target companies focused on expanding market opportunities. A TechCrunch article published on April 10th offers a few details about what “doing things a bit differently” might entail.

As detailed in the TechCrunch article, Pearson Ventures will back up to five companies per year over the next three years. However, Owen Henkel of Pearson told TechCrunch, they have no plans to lead rounds, purchase large stakes in startups, or control terms. Pearson Ventures will solely operate as a co-investor alongside other VC funds. Henkel also confirmed that Pearson Ventures will not, as one might expect, serve as an acquisition pipeline for Pearson Education.

As Henkel told TechCrunch, this is about “keeping Pearson’s ear to the ground” so they are on top of emerging trends in the edtech field. Henkel added, “For us, it’s about learning, not about staking our flag in something we want to buy later.”

While Pearson Ventures is a new initiative, this isn’t the first time Pearson has played an investor role. Previously, Pearson’s Affordable Learning Fund invested $20 million in other education companies.

Image source: seth-schwiet-40984-unsplash.