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A new class of start-up

Boston’s reputation as an academic center lures a growing cluster of education-tech firms

By Michael B. Farrell
Globe Staff / March 11, 2012
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As Marc Zawel was finishing his master’s degree in business at the University of North Carolina Chapel Hill, he weighed the options on where to locate his start-up, which would offer college admission counseling via the Web.

He considered New York. He thought about Silicon Valley. Then he settled on what, in hindsight, was always the obvious choice: Boston.

“This is America’s college town,’’ said Zawel, whose company, AcceptU, operates in a 200-square-foot office in the Back Bay. “I don’t think there’s any other place in the country for an ed-tech start-up to be.’’

AcceptU is part of a growing cluster of technology companies focused on innovation in education and taking root among the region’s universities, education researchers, and textbook publishers. Hatched by former teachers with dreams of using technology to improve schools, or entrepreneurs who see opportunity in learning, these so-called ed-tech firms number about 100 in Greater Boston, each employing anywhere from two to dozens of workers, according to EdTechup, a monthly gathering for education entrepreneurs.

“Ed-tech is a hot topic right now,’’ said Marissa Lowman, the EdTechup founder.

The companies range from Web platforms meant to improve students’ test-taking skills to start-ups trying to make it easier to learn foreign languages. Many of these entrepreneurs are bootstrapping, using their own money to launch companies, while some are backed by venture capital firms or education publishing corporations.

Alleyoop, founded two years ago and launched publicly last month, is funded by Pearson Education Inc. and located in the textbook publisher’s Boston office. Alleyoop offers tutoring services through its website, providing drills to hone math skills and access to tutors - some as far away as India.

More than 30,000 students use the service, which much like Facebook requires them to register online to get access to math practice. Once users are on the site, Alleyoop tracks their abilities and offers help based skill levels. On completing exercises, students earn points, which they can trade for other services, such as on-the-spot tutoring.

The site plans to make money by involving parents who can buy more points so their children can access other services, such as educational videos.

Patrick Supanc, Alleyoop’s founder and formerly Pearson’s senior vice president of digital product management, said his company wants to target the segment of teens struggling in high school and in need of additional help outside of the classroom.

For example, if they have a test coming up that deals with proportions, students can log in to get instant help. “What we try to do is fix an immediate problem for kids,’’ said Supanc. “If we don’t serve their needs very quickly, they are gone.’’

This boom in ed-tech comes as national and state policy makers push for education reform and emphasize technology to drive change. Technology is not only increasingly showing up in classrooms, but also becoming more accessible to students carrying around smartphones and laptops.

It’s getting less expensive, too. New companies can build apps that run on an Apple iPhone at relatively little cost.

So far, however, investors have been slow to back these start-ups, which must break into a market dominated by publishing, test-prep, and other large educational corporations with longstanding ties to school systems. Deep-pocketed backers like Pearson are still the exception.

Kirby Salerno, for example, launched ClassroomWindow in Needham last August to create a platform to review educational materials. Think TripAdvisor for textbooks. The goal is to build an online destination for people to review educational products - chemistry textbooks or interactive whiteboards for the classroom - and give the buyers of these products a place to find out what worked and what didn’t.

Salerno has made about 10 pitches to investors in an effort to raise funds. So far, the start-up is bootstrapped with money from friends and family.

Despite the funding challenge, Salerno launched the beta service and currently has 500 products in the system open to reviews by educators. He aims to collect enough user-generated content from the reviews so that textbook publishers and other education companies will pay for access to his data.

“We want to redefine ways that schools buy products, and the ways vendors and publishers create products,’’ Salerno said.

Jean Hammond, an angel investor in the Boston area who has invested in two local education start-ups, agreed that raising money for these firms has been tough. But, she said, that’s beginning to change as more entrepreneurs come up with new products to change educational approaches.

Memrise, a London start-up with an office and investors in Boston, aims to change how people learn foreign languages by using games to teach vocabulary, grammar, and other elements of language. It offers a basic service on its website at no charge, but may launch premium paid services. That company recently raised $ 1 million in venture funding from investors including Avalon Ventures in Cambridge.

Meanwhile, the buzz around ed-tech is getting louder. Last week, the South by Southwest Interactive conference in Austin, Texas,played host to hundreds of education-tech entrepreneurs and investors. It’s just the second year the influential conference - known as a launching pad for successful tech start-ups - has created a specific forum for ed-tech.

But there are barriers to education innovation, ranging from students who don’t have access to the Internet to schools that can’t afford new technology.

“We need a lot of creative thinking to come up with ways for schools to adopt new technologies,’’ said Richard Culatta, deputy director of the office of educational technology for the Department of Education. “If we can harness the excitement of this whole thing, we are going to see some really effective ed tools.’’

He said the department is looking for ways to foster education-technology clusters around the country by encouraging more collaboration between academics, start-ups, and investors.

“We are excited about places where there is an entrepreneurial and developer community, a research community, and educational institutions,’’ he said. “This is education’s Internet moment.’’

Michael B. Farrell can be reached at michael.farrell@globe.com.

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