Leadership in the Education Field
In 2017 there were 130,930 public and private elementary & secondary schools and 7,427 charter schools in the United States. The education system serves 56.4 million students and accounts for over $720 billion in funding from local, state and federal governments.The education sector is an important part of the U.S. fabric.
For years, teachers and school systems have collected and applied data in a variety of forms; grades are the age-old yardstick to track progress, standardized test scores are compared across states or districts to assess performance. Today’s technology has increased the opportunity to use data and analytics in the classroom and schools, capturing more metrics on engagement and performance than ever before. According to EdSurge, $1.7 billion was invested in education technology startups in 2019. This number rose to $2.2 billion in 2020. The disruptive nature of the Covid-19 pandemic was a tailwind for the education technology industry.
The educational ecosystem can be challenging to build for due to the sheer volume of stakeholders: teachers, students, parents, administrators and district administrators — each with different incentives and goals. Many startups focus on serving one stakeholder or a small subset of stakeholders — for example, gamifying learning to make it fun for students (Roblox), creating alternative environments called micro-schools where teachers can teach (VIPKid, SchoolHouse), or platforms that help administrators and counselors to optimize outcomes for students (Naviance). However, not many startups cater to the needs of 2+ stakeholders and are successful in their endeavor. This is why we are very excited to announce our investment in Innovare.
Why We Invested in Innovare
Innovare is the newest addition to the Chingona Ventures portfolio founded by AJ DeLeon, Luis Fernando DeLeon and Nick Freeman. Chingona Ventures first learned of Innovare because Fernando, Samara’s classmate at the University of Michigan, reconnected with her while Innovare was participating in the Latinx Incubator. Fernando, a former product leader at Google holds technical expertise as an engineer while his brother, AJ, who was Innovare’s first founder, brings the know-how of the education industry having spent close to a decade at the Chicago Public Schools and consulting for the Bill and Melinda Gates Foundation.
Over the past three years, we’ve observed the many accomplishments of Innovare and the team — including bootstrapping growth, doubling revenue almost every year, and growing the team. Innovare’s all-in-one strategy and analytics software solution empowers education leaders to impact students and communities. Innovare prioritizes the customer experience and is the only product offering data consolidation, management, analytics, and strategic planning in one place. The founding team’s innovative solution backed by their deep industry knowledge, provides leaders in the education ecosystem the ability to employ a data driven approach in their decision making.
- People — Deep Sector Expertise: AJ DeLeon brings 15+ years of experience in the educational ecosystem as a former administrator, school improvement coach, and data strategist. Luis DeLeon is a former engineer and consultant with 12+ years of experience in product management, product, and internal operations. Nick Freeman, the President and Co-Founder of Innovare, is a former data strategist in Chicago Public Schools, has an MBA, and serves as the sales leader focused on strengthening relationships with public and private sector organizations. We are confident in this management team’s robust professional experience and deep industry knowledge. It was crucial for us to see the team hold experience in the education space; this team knows how to sell into their market, understands the nuances of the sector, and they have a personal passion for education reform that benefits students, teachers and administrators.
- Product — Enhances customers’ ability to deploy a data-driven strategy: Innovare’s core value proposition to its customers is efficiency, simplicity, and access to data-driven insights. Innovare provides customers with three crucial capabilities — 1) single page web application that consolidates a school or organization’s disparate data into easy-to-use dashboards for tracking standard metrics (e.g. attendance, grades, engagement, compliance, and other operational requirements, all the way to leader-specific metrics), 2) offers strategy and planning tools that simplify organizational-level self-assessments and 3) used for project management and professional development (e.g. performance tracking/assessment/evaluation at the teacher level). Soon, Innovare’s app Inno™ will also leverage machine learning to provide strategic solutions to the most-common problems educators face, simplifying their work and saving them even more time and resources. We are excited this product is built by educators for educators.
- Profit — Subscription Model: Innovare generates revenue through a tiered annual subscription model. The tiers are determined based on the organization type (individual schools vs. networks vs. districts), number of data connections, API connections, dashboard views, number of users, among additional factors. We were impressed by the bootstrapped traction and growing revenues — we are a fan of the scrappy management team.
- Potential — Deep Understanding of the Customer: Innovare’s potential lies in its differentiated approach to the market and focus on tailoring its sales approach to individual decision makers rather than generic outreach. First and foremost, the team understands the pain points of customers and addresses those pain points through the product. The Company targets K-12 schools, school systems and nonprofits that work with those same organizations to impact student outcomes. Innovare is priced reasonably to ensure that budget restraints are never the reason why schools cannot leverage the product. This approach created a lot of goodwill among customers (network effects) and provided a moat against competitors’ higher prices. Furthermore, given the team’s knowledge of the education sector, the team operationalized its sales and marketing, catering to the granularities in the organizational structures of schools. We were impressed by the Company’s sales approach, which resulted in a high win rate, shorter sales cycle and strong customer retention. We like to see founders that can bring a differentiated approach to the market and execute the strategy in the market, just like Innovare.
- Portfolio — Edtech Chingona Ventures is excited about the potential for technology to improve the education system and support strategies deployed to educate children. Previously, we invested in Encantos, a platform inspiring kids to learn 21st century skills. We are thrilled Innovare aligns with our EdTech thesis and we are very excited about this partnership!