NewSchools Partners With Rethink for More Investment, Development

NewSchools Venture Fund is entering into a partnership with the Rethink Education Fund in a move that could provide millions more in education investment financing, according to a report by Mokoto Rich writing for the New York Times.

The partnership highlights an exciting time for education investment with an explosion of interest and money.

According to the MoneyTree Report, an analysis of Thomson Reuters data by PriceWaterhouse Coopers and the National Venture Capital Alliance, venture capital investment in education businesses has grown 80 percent since 2005 to more than $632 million last year.

Rethink Education was founded last year with a focus on education startups and has agreed to give some of their profits to NewSchools, which is a nonprofit that began by funneling donations to charter schools and now invests widely in education businesses and groups.

NewSchools has financed various charter management organizations, such as Khan Academy and Aspire Public Schools. Reports indicate they've invested around $260m over the past decade and a half, while receiving funding from prominent education donors such as the Walton Foundation and the Bill & Melinda Gates Foundation.

"There may not be a need for another venture firm to fund e-commerce businesses that sell high-fashion clothing," Mr. Greenfield said. "But in education there is a real shortage of capital for the things we think matters." Rethink has raised $40 million and invested in nine companies.

NewSchools has branched out recently into investment in for-profit ventures, such as Engrade and Grockit – ventures that seek to make money off of developing grading programs for teachers and social media focused test preparation. However, critics of these enterprises feel concerned that the businesses have ulterior motives that may not best serve the interests of the student body.

Diane Ravitch, a prominent education historian/activist and co-founder of Network for Public Education, is one such doubter. She's wary of investors making money off an education system funded by the taxpayer. She also advocates against charter schools in general, tenure changes and high stakes testing.

Ted Mitchell, chief executive of NewSchools, said there was a role for companies in public education. "We are attempting to direct philanthropic dollars at innovations that are going to do the most for poor kids and for the system as a whole," he said. "We believe for-profit entities have just as much capacity to do that as not-for-profits, and they ought to take a run at it."

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