Foundational literacy and numeracy skills — in some cases bolstered by the use of generative AI — are likely to be major areas of focus in the investments made by a prominent venture-philanthropy fund over the next few years.
Those areas were heavily emphasized by the NewSchools Venture Fund in funding it provided last year to education companies, and they will remain big themes as the organization prepares to award $100 million over the next two years.
NewSchools, a venture philanthropy fund focused on the education space, invested $13 million across 54 products and initiatives as part of its 2024 funding round, including $2.6 million for 17 organizations in the learning solutions space. The organization is getting ready to invest in another round of companies, with applications due Jan. 8.
As a philanthropic venture fund, the organization raises money from donors, like philanthropist MacKenzie Scott and the Bill and Melinda Gates Foundation. It channels that funding into three main strategic areas: the creation of new charter and district schools; learning solutions, such as core and supplemental products; and the future of the teaching profession.
Within all three focus areas, the organization is also placing an emphasis on serving students with learning differences.
From 2021 to 2023, NewSchools invested $113 million across 421 ventures, 70 percent of which were led by people of color. Sixty two percent were led by women. The organization is now working on its next investment round, which is aimed at providing $100 million within the next two years across all three focus areas.
NewSchools’ work in the learning solutions space is largely centered on foundational literacy and numeracy skills, and it is especially interested in exploring ways generative AI can help teachers and students cultivate those skills.
Companies backed by the fund receive one-year, unrestricted grants of amounts between $150,000 to $250,000, as well as one-on-one-coaching, and networking with peer organizations.
While the organization is focused on foundational skills, it is looking to extend those efforts for students throughout K-8 grades, and prioritize comprehension and critical thinking skills in English/language arts and algebraic thinking in mathematics, said Cameron White, who leads NewSchools’ learning solutions focus area.
“We chose those areas because they’re the outcomes that we know communities and school systems care a lot about, and that’s where a lot of the value can be created,” White said. There’s the potential for those investments to have a broader impact across society, he added, because students can also put those skills to use outside of the classroom.
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Generative AI is a central focus of the organization’s investments, as well, particularly educational products and programs that that can increase students’ access to research-based instruction and personalized learning.
NewSchools has previously backed companies that have AI-capabilities. But the organization is now looking toward building a “long-term strategy around emerging technology and how it relates to instruction,” White said.
For example, one of the companies awarded funding in NewSchools’ 2024 class is Open Literacy, which is building on its experience in the literacy tutoring space to develop a generative AI-powered tool for aligning lessons to students’ current level of understanding.
“It’s helping teachers be able to create lessons that are driving [academic interventions] in their classroom, and solve this really important pain point where teachers don’t always have the capacity to customize the lessons,” he said.
“Generative AI can make part of that easier, and then we can focus on that moment of connection between the teacher and the student.”
Other applications for funding NewSchools has received over the past year include AI-powered teaching assistants to help implement research-backed instructional practices, and products that seek to engage English learners’ families in their learning.
As NewSchools looks toward its next funding round, White said the learning solutions’ team is looking at early-stage ideas, either from startups or efforts launched within organizations in the market, that are focused on promoting K-8 reading and math growth.
It’s also interested in how research and evidence-based approaches can be built into these new products and efforts early on in the development process, he added.
“We’re trying to understand what evidence do people have, coming in — what alignment with research?” White said. “But also, how can we build their capacity early on to do some of that work?”
Given financial challenges in the market, especially in the wake of federal stimulus funds ending and uncertainty around the levels of future federal funding for K-12, NewSchools is also looking closely at whether companies seeking its support have innovative business models, are finding new funding streams, or experimenting with approaches such as outcomes-based contracting, he said.
NewSchools’ work comes as the overall funding environment for education startups and companies in the space has become challenging. Venture capital funding for K-12 has declined dramatically over the past year, leading some education companies to look for alternate forms of financing, or for larger organizations to acquire them.
While the final deadline to apply for NewSchools’ 2025 funding opportunity is Jan. 8, organizations that apply by Dec. 10 have the option to receive additional help completing the application.
White says he tells organizations to look at the moment as “an opportunity to clarify your value in this new post-ESSER world,” and as a chance for organizations to solidify their product-market fit, demonstrate their positive effect on schools, and develop sustainable growth strategy.
