This year, investors have reaped big financial returns from betting on Zoom. Since March, when the global pandemic accelerated, the stock price of the publicly traded online video company has increased five-fold, to over $500 per share, by Wednesday’s close.
As it turns out, other companies building on top of Zoom can attract plenty of capital as well. One of them, newcomer ClassEDU, just raised $16 million in a seed round led by Deborah Quazzo of GSV Ventures and Emergence Capital’s Santi Subotovsky, who is also a board member of Zoom.
The Washington, D.C.-based startup isn’t shy about the platform it is piggybacking on. Its product is called “Class for Zoom,” and what it’s building is pretty much that—a suite of tools that let instructors take attendance, distribute and grade assignments, and deliver online assessments through Zoom.
If some of these functionalities sound like what one might find in a learning management system, that is no coincidence. ClassEDU’s co-founder and CEO is Michael Chasen, who previously co-founded and served 12 years as CEO of Blackboard, which remains one of the biggest LMS providers in the education market.
In an interview, Chasen says that the ideas behind this latest education venture percolated in March, as he watched his three children transition to online classes due to the global pandemic. He was particularly troubled by the fact that many of their classes were reduced to meeting just one hour per week.
“I feel like my kids were being left behind, and I think many other parents did, too,” recalls Chasen. He called up former Blackboard colleagues, and together they started building prototypes using the software development kit that Zoom makes available to third-party developers.
More than 100,000 schools and colleges across 25 countries currently use Zoom, according to company officials. At Arizona State University, students and instructors have held over 1.3 million Zoom meetings, totaling more than 26 billion hours, since the start of the pandemic, its chief information officer Lev Gonick shared on a virtual panel this week at the ASU+GSV Summit, an education technology conference.
Already, many teachers have adapted features originally designed for consumer and commercial purposes for their online classrooms. Students raise hands and ask questions in the chat. There are breakout rooms for small-group discussions.
ClassEDU aims to go further. While recreating a physical classroom online is nigh impossible, Chasen says he wants to replicate as much of that in-person experience as possible. “We want to recreate the virtual version of teachers walking around the classroom, seeing which students need help.”
Some of that entails adding small adjustments to existing Zoom functionalities, such as letting teachers see the order in which kids virtually raise their hands, or displaying students in alphabetical order. Other features include the ability to track how long students speak during class, or how engaged they were in the chat room.
Class for Zoom also has its own built-in gradebook and attendance tracker. And there is a proctoring feature that will alert instructors if a student has other browser windows displayed while taking a test. (In response to privacy concerns, Chasen says that students have to click “yes” to give permission to enable this.)
All of these tools are still in development. The company aims to make a version available for beta testing at the end of October, with plans for a full public launch by the end of the year. The product will be sold to schools as an annual subscription but Chasen did not disclose any pricing information.
For an education startup with no product (yet), $16 million is a hefty sum for a seed round. (Over the past five years, seed-stage deals for this industry averaged just a little over $2 million.) “Our target was a little lower than that,” says Chasen. But showing a demo to Subotovsky, the Zoom board member, the pitch attracted considerable interest from other investors “who were also parents themselves,” he adds.
Other financiers in this seed round include early Zoom investors Jim Scheinman of Maven Partners and Bill Tai, the company’s first committed backer. America Online co-founder Steve Case, Fred Shaufeld and Jessie Woolley-Wilson, the CEO of digital math curriculum provider DreamBox Learning, also contributed.
The capital will expand the team’s headcount from 50 to about 100, says Chasen.
In an interview with EdSurge earlier this month, Zoom’s recently hired global education lead, Anne Keehn, said that “we absolutely encourage integration with the platform.” Its app marketplace currently includes more than 100 tools in the education category.
Other startups have also been riding the Zoom boom to win venture funding. Grain, a company that lets users take notes and share clips from video calls on other media platforms, raised $4 million in April.