Forced to move classes online quickly this spring, colleges worked with what they had: the learning management system and generic videoconferencing software. Those tools did the job, but some in the education technology space saw an opportunity. 

That is reflected in a recent run of investment into new companies providing online platforms and programming, particularly videoconferencing tailored for education.

"Investors are looking to see whether there are long-term bets to make" across the ed tech sector, said Howard Lurie, principal analyst for online and continuing education at Eduventures Research. "All of it's governed by a realization that the remote learning pivot is not temporary. It will extend out to the balance of 2021."

And likely beyond.

Colleges were expanding online before the pandemic hit, and surveys highlight a shift to centralized purchasing and control of technology platforms and services, Lurie said.

The pandemic-induced move online is drawing attention to what colleges need to continue that transition. 

Investors are pushing companies to "fill a space that they can invest in," said Phil Hill, a partner at the ed tech consulting firm MindWires.

As for videoconferencing platforms for education, he said, "there's a big hole there."

Making Zoom better

The limits of traditional videoconferencing software in education applications have been on display in recent months. Two companies emerging to address the need for tailoring are taking divergent approaches: tweaking an existing platform with add-ons or creating a new company entirely.

Dan Avida, CEO and co-founder of Engageli, a company borne from the pandemic, is taking the latter approach. 

"People are not using Zoom because they love Zoom. They are using Zoom because that's the only thing they had," contends Avida, who with his wife, a founder of Coursera, watched as their daughters feigned participation in online classes. (Who are we to judge?)

Avida searched the market in the hopes of finding a more engaging video platform to recommend to their school. Finding none, the pair and collaborators developed an alternative. Engageli combines active learning features such as polls, quizzes and small-group breakouts, called "tables" (top image), with videoconferencing. The system also keeps tabs on how much students are participating, which can help instructors decide whom to call on. 

"It allows universities to really scale up synchronous instruction," said Avida, who brings experience growing tech companies.

Other companies trying to improve "Zoom University" are building onto that platform.

That includes ClassEDU, whose co-founder and CEO Michael Chasen — who also co-founded and led Blackboard — cited Zoom's wide uptake and scalability as reasons creating an add-on for the software, rather than building a separate platform, was "a no-brainer."

Chasen is undaunted by the potential risks of basing his software, called Class for Zoom, on that of another company. Chasen likens Zoom to Salesforce, which welcomes developers to create features and functions that augment its sales management software. 

"Zoom is the next platform for people to build on top of, we're just one of the first players doing it," Chasen said. Plus, he added, many schools have already invested in Zoom. 

Class for Zoom offers similar features as Engageli. And their makers both bring considerable industry clout. ClassEDU, in addition to its founder's ed tech pedigree, counts early Zoom backers among its investors. And Engageli has a Coursera founder and a former 2U executive in its founding ranks.  

Both companies are also beginning to work with colleges. Engageli recently began a pilot with a few institutions and plans to include one or two dozen by year-end. ClassEDU plans to launch Class for Zoom in beta mode in the next two weeks, and Chasen said people from more than 2,000 schools across K-12 and higher ed have asked to sign up. 

Zoom, too, is making changes, a company spokesperson told Education Dive in an email. Those include the way the class is visualized on the screen, the ability to incorporate apps like Coursera, and better recording and transcription functionality. It also gave instructors more control over the classroom, and it says it has improved security on the platform to try to address the issue of intruders interrupting virtual classes and meetings, also known as "Zoom bombing."

Still, investors and others see promise in Zoom alternatives. ClassEDU raised $16 million in seed funding last month, and Engageli drummed up $14.5 million. 

They're not the only companies drawing financial support to try to enhance online learning. Headroom, which focuses on videoconferencing, raised $5 million. Podium Education, which produces online classes for colleges to use, recently raised $12 million. That company has been likened to MasterClass, which raised $100 million this spring. 

Online course provider Udemy raised $50 million at the start of the year. And online program manager Noodle Partners snagged $16 million in June, while Coursera — which made its platform free to colleges for a time this year — raised $130 million.

In all, the U.S. ed tech sector raised $803 million in venture capital during the first half of 2020, EdSurge reported, which is on par with the prior five years.

Can colleges just drop Zoom?

The move online this spring disrupted the ed tech procurement timeline, accelerating decisions that typically take months or even years to process and execute. That means companies taking Engageli's approach will compete in a market in which many potential customers have recently increased their business with an existing videoconferencing provider.

But the pandemic has also left colleges anticipating more long-term online programming, which may have them seeking a tailored option.

"Making Zoom better has a very low barrier to entry," Hill said, suggesting schools could create custom add-ons. However, he continued, a from-scratch alternative could deliver a product designed for the education market. 

Whether the latter could overcome the barrier of schools having invested heavily in existing platforms is "a big open question," Hill said. "There's just a much bigger hurdle they have to jump over."

Trace Urdan, a managing director with investment bank and consulting firm Tyton Partners, acknowledges universities tend to be risk-averse. But he thinks instructors may be more comfortable navigating and switching user interfaces. 

"I ultimately am rooting for the companies that have a tool that's designed for this specific use case, and I'm hoping that those options will flourish and prevail in the market and that it won't be that Zoom just sort of crushes the oxygen from everyone else," he said.

But colleges won't likely all pick the same solution, said Jason Palmer, general partner at New Markets Venture Partners. He figures there will be three to five companies "blooming right now" that will succeed, including Zoom and possibly Engageli. 

"There will be multiple winners here," he said.