In 2012, education technology firms attracted $1.1 billion from venture capitalists, angel investors, corporations, and private equity—an order of magnitude more than the industry was pulling in 2002. Startups Coursera and Udacity, which offer high-quality online college courses to the masses, have each received more than $20 million from investors. Big corporations are buying their way into the industry, with Rupert Murdoch’s News Corp. leading the way in 2010 by dropping $360 million to acquire ed-tech firm Wireless Generation and luring education superstar Joel Klein away from his gig as the head of New York City schools.
But will the rush of cash translate into a radically transformed education landscape? When this kind of money flowed into tech companies in other sectors of the economy, we saw radical improvements in everyday transactions, as well as some dramatic booms and busts.