EdTech Startup Guide

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EdTech Startup Guide, June 2021

3EdTech Startup Guide | June 2021

In 2020, the global pandemic changed the education landscape, including how we meet, share information, and ask for help. It shifted much of what used to happen in classrooms to remote locations, and accelerated the digital transformation of institutions around the world. With some students and teachers returning to the classroom, others continuing to learn remotely, and some relying on hybrid options, building learning environments that are secure, scalable, and accessible is critical. These changes carry their own set of challenges but also open new possibilities as we continue to respond to COVID-19 and try new strategies.

As educators continued to identify the best ways to engage with their students, parents and caregivers transitioned their living rooms into classrooms and were exposed to the education of their children like never before. At the same time, learning institutions at all levels needed to find solutions to expedite the shift from the traditional classroom to remote learning.

Fortunately, there are thousands of EdTechs who focus on helping educational institutions make this transition and plenty of opportunities for EdTechs just coming into the market to make a measurable impact. This rapid change in education has translated into a renaissance for EdTechs around the world.

To navigate this new landscape, EdTechs are using AWS solutions to power the changes needed to accommodate customers with speed, scale, and accuracy while helping to deliver more engaging learning experiences, improving customer relationships, developing forward-thinking data strategies, and building new revenue streams.

The pandemic prompted an immediate shift, and could have long lasting implications for how the education community operates. As a result, early stage EdTechs need to be proactive as they enter this new environment and start thinking early and often about the current state of the market and how to utilize cloud solutions as they navigate.

Based on key learnings and direct interaction with AWS customers around the world, we identified seven trends EdTechs should keep top of mind as they navigate 2021 and beyond.

Amazon Web Services, Inc. (AWS) enables education technology (EdTech) companies to accelerate the development of secure and scalable technology solutions that support students and educators every day. AWS helps EdTechs realize the full potential of cloud computing with dedicated business and technical resources to support their growth.

From idea to IPO and beyond, AWS supports EdTechs as they start, grow, and optimize their business to deliver on their mission for education. Our passion for equity in education is rooted in our leadership principles. We are curious and have a desire to help all learners succeed.

AWS EdStart, the AWS EdTech startup accelerator, is designed to help entrepreneurs build the next generation of online learning, analytics, and campus management solutions on the AWS Cloud.

The accelerator is designed to enable EdTech startups to move faster through benefits such as equity-free financial support through AWS Promotional Credit, technical training and support, access to a global community of EdTech experts, and more.

Overview ...............................................................................................................3 2021 EdTech Trends

1. Online & Distance Learning .....................................................................5

2. Rapid Innovation .....................................................................................10

3. Market Expansion ....................................................................................14

4. Artificial Intelligence (AI) & Machine Learning (ML) .........................17

5. Accessibility & Inclusion .........................................................................20

6. Social Emotional Learning (SEL) ..........................................................22

7. Fundraising .............................................................................................25

Next Steps ...........................................................................................................30

Contents

Overview

About AWS & AWS EdStart

EdTech Startup Guide, June 2021

5EdTech Startup Guide | June 2021

There is an increased demand for online and distance learning technologies globally. Even though this trend was building momentum in 2019, it has been exponentially catapulted as a result of the pandemic. The year 2020 changed how educators approach the traditional classroom model and transformed both parent and student expectations for learning. These changes have driven technical advancements, increased knowledge of the impacts of online learning, proven the value of decentralized approaches to education, and launched the creation of new companies. Customer expectations of learning, including how, when, and where to learn, have both changed and grown. Through technology advancements, students can now learn almost anything at the click of a mouse or a swipe of a mobile phone screen. They expect to have well informed and easily digestible content at their fingertips. This shift is supported by the increased efficacy of learning through online and distance learning technologies.

According to a study conducted by the 2020 World Economic Forum, students retain 25-50 percent more material through online learning compared to the traditional classroom model. Couple this with a 40-60 percent decrease in the amount of time needed to learn material presented in e-learning environments. Through studies like these we are learning how valuable new technologies can be for learners, so it is doubtful that this trend will go away any time soon.

Technology Considerations: Education ministries, colleges, and schools around the world are rapidly adopting remote learning and working to maintain business continuity and provide students with continued access to education. From quickly scaling learning management systems or launching virtual classrooms and setting up remote help-desks, AWS and EdTechs are providing mission critical infrastructure

that is enabling our education customers to continue delivering against their missions, safely and efficiently. As a result, many AWS customers are reaching out for help on how to most effectively shift more learning to the cloud.

From PreK to higher ed, educational institutions have seized the opportunities that EdTechs can provide during these unusual times. Of these technologies, the AWS Cloud has had an outsized impact in transforming the efficiency and effectiveness of schools and colleges around the world, as education leaders have transitioned to remote learning.

Last year, as Italy went on national quarantine, AWS worked with EdTech bSmart Labs to provide students in Italy access to virtual classrooms using audio and video-calling service Amazon Chime SDK. Thanks to this new service, 30 percent of schools in Italy are now conducting their classes online.

1. Online & Distance Learning Technologies

1. Online & Distance Learning: Demand for online and distance learning exponentially increased as a result of the pandemic. Even though students will eventually return to the classroom, hybrid learning opportunities are here to stay.

2. Rapid Innovation: EdTech is quickly growing and innovation needs to be at the forefront as education models shift.

3. Market Expansion: Setting up foundations that can scale globally from the start will help set you up for success as your company scales and expands.

4. Artificial Intelligence (AI) & Machine Learning (ML): Integrating AI and ML can help you reduce costs, increase your reach, provide accessible options to your customers, and improve student outcomes.

5. Accessibility & Inclusion: Incorporating different ways to engage with your product such as speech to text, or text to speech, provide opportunities for neurodiverse learners to access your solution.

6. Social Emotional Learning (SEL): SEL considerations are critical to support students during and coming out of the pandemic, and educators are being asked to incorporate into their lesson plans.

7. Fundraising: As EdTech budgets become larger, it’s important to understand the different types of funding available to your startup.

The EdTech Startup Guide is a summary of trends, industry insights, best practices, and resources for entrepreneurs to consider as they build the next generation of online learning, analytics, and campus management solutions on the AWS Cloud. For questions regarding this guide, please reach out to AWS EdStart at awsedstart@amazon.com.

“ The AWS EdStart team provided us with technical guidance and helped us to reduce costs, allowing us to cut our development spend by

thousands, and launch five months ahead of schedule. At ROYBI, we call the AWS EdStart team our family, and that is how much we appreciate their support. AWS has helped us fulfill our mission and promise to our

customers in prioritizing their privacy, enabling us to provide secure cloud-based technology around the world without boundaries.“

— Elnaz Sarraf, Founder and Chief Executive Officer, ROYBI Inc.

7 Trends For EdTech to Navigate 2021 & Beyond:

EdTech Startup Guide, June 2021

7EdTech Startup Guide | June 2021

“By using the Amazon Chime SDK and with the commitment and competencies of our fantastic team, we were able to build multi-party video interaction capabilities into our virtual classroom application for schools in Italy in under eight days, and the feedback from teachers and students using our application has been excellent,” says Emanuele Putignano, Chief Executive Officer, bSmart Labs.

This same trend continued in Latin America where AWS worked with Universidad de Los Lagos in Chile to scale its learning management system on AWS to support over 11K students in less than a week. This happened without disrupting daily operations while maintaining optimal performance regardless of the additional digital demand. AWS is also supporting Brazil’s largest K12 system, Somos Educação (Cogna Educação – COGN3) in extending online education to more than 1.3M students and faculty. In Brazil, AWS is providing the São Paulo state government, with the cloud computing infrastructure to offer online classes at no cost. As the first digital initiative of its kind in Brazilian public schools, this will benefit approximately 1M high school students.

If you would like to incorporate online and distance learning into your existing EdTech solution, you may want to consider implementing:

• Real-time communications such as messaging,

audio, video, and screen sharing

• Live video and audio streaming

• Audio transcriptions

Two AWS services that support these advancements include Amazon Chime SDK and Amazon Interactive Video Services (Amazon IVS). Amazon Chime is a communications service that lets you meet, chat, and place business calls inside and outside of your

organization, all using a single application. Developers can use the same communication infrastructure and services that power Amazon Chime, as well as add audio calling, video calling, and screen sharing capabilities directly to their applications using the Amazon Chime SDK.

Amazon IVS is a managed live streaming solution that is quick and easy to set up, and ideal for creating interactive video experiences. You can send your live streams to Amazon IVS using streaming software and the service does everything you need to make low-latency live video available to any viewer around the world, letting you focus on building interactive experiences alongside the live video. An example of a customer using real-time video communications components to help students with online learning is Class2Class.

AWS EdStart Member, Class2Class, Inc. is a collaborative learning platform and global network that provides universities, businesses, and organizations with an interactive and neutral “third space” to connect, create, and manage project-based courses together. Each year, millions of students travel abroad to study and enrich their personal development and global perspective through international student exchange programs. This is a very costly exercise for millions of students. There is a huge need for online learning environments due to its student-centered, cost-effective, and equitable means of advancing international education.

To solve this challenge, Class2Class developed ImmerseU, a virtual exchange learning platform. The platform helps colleges and universities create and enhance collaborations through its online environment, by fostering cooperation globally across classrooms, nonprofits, governments, and the private

sector. With AWS, Class2Class created a secure and affordable global platform to give students equitable access to cross-cultural exchanges and empower democratized learning.

The platform enables instructors to model 21st century skills for collaboration, critical thinking, problem solving, perseverance, grit, project-based learning, interconnected thinking, pro-social behavior, and intentional community building.

“Through AWS EdStart, we have gained access to cutting-edge cloud tools, including

reliable and stable data storage, video support, artificial intelligence (AI) applications, and help

expanding into China, as well as invaluable training, webinars, and marketing support.”

— Matthew Hightower, Chief Executive Officer & Co-Founder, Class2Class, Inc.

Despite the global economic recession across multiple industry

sectors, the education space, and specifically the digital learning

space, has never been more poised for growth, innovation and

transformation. According to HolonIQ, “EdTech is growing at

16.3% and will grow 2.5x from 2019 to 2025, reaching $404B

in total global expenditure. Even at this level, EdTech and digital

expenditure will only make up 5.5% of the $7.3T global education

market in 2025.” And according to EdSurge, such growth in

education spending and expansion of digital learning exploded

EdTech investments to a record of $2.2B in 2020.

“Catalyst @ Penn GSE is excited to work with AWS EdStart to help

advance innovation in worldwide education. Working in concert with

AWS EdStart, Catalyst helps education entrepreneurs create their lean

business canvas, design scalable prototypes and prepare evaluation

models that help ventures secure capital and sustain their competitive

advantage.”

— John Gamba, Director and Entrepreneur in Residence,

Catalyst @ Penn GSE

“For educators, data privacy is a concern. With the massive shift

to remote learning, student privacy experts are recommending

that school districts use caution with new EdTech applications. To

help circumvent this, EdTechs can easily put safeguards into place

through using a data integration partner such as GG4L. We offer an

integration platform as a service feature that acts as a trusted digital

engagement hub protecting the personally identifiable information

(PII) data for schools. Keeping up with data privacy regulations can

be expensive and time consuming, resulting in a barrier to gaining

business. GG4L works with the AWS EdStart program with a common

goal of offering secure digital solutions to significantly reduce the

data privacy overhead for early stage EdTech companies.”

— Robert Iskander, Founder and Chief Executive Officer,

Global Grid For Learning

“AWS EdStart has been a key partner to many of our companies

including Immersed Games, and Tyto as they’ve transitioned and

scaled across the last year. They’ve played a huge role helping

with all of the adaptations that have resulted as an outcome

of COVID-19. In order for EdTech companies to sell into schools

and colleges, they are required to meet specific accessibility

requirements and AWS EdStart has helped our portfolio companies

meet these requirements.”

— Jean Hammond, Co-Founder and General Partner,

LearnLaunch Accelerator

“School procurement has evolved significantly in the past few years

and schools have become more discerning customers as a result.

According to Teacher Tapp, only 8 percent of schools trust the claims

made by EdTech vendors and 79 percent of schools want clear

proof that it works. To prove the efficacy of your EdTech, the British

Educational Supplier Association (BESA) discovered that ‘User Views’

(teacher reviews) are now a key consideration in the procurement

process, with 46 percent of schools consulting them prior to purchase.

This is up from 29 percent in 2017. Another key factor to be aware

of is that multi-academy trust’s (MATs) influence 23 percent of

primary school purchases and 33 percent of secondary school

purchases. This is up from 11 percent in 2017, and the role and

importance of MATs in procurement looks set to increase with Gavin

Williamson, Secretary of State for Education, United Kingdom

recently stating “the Government is looking at how to get more

schools into multi-academy trusts.” In summary, EdTech companies

that can demonstrate the efficacy of their solution through

teacher-generated feedback are set to gain a competitive advantage

over those who cannot.”

— Jay Ashcroft, Co-Founder and Chief Operating Officer,

EdTech Impact

EdTech Startup Guide, June 2021

Industry Insights FromAWS EdStart Collaborators

EdTech Startup Guide, June 2021

11EdTech Startup Guide | June 2021

EdTech is a rapidly expanding market. According to HolonIQ, the global education market is expected to surpass $10T in annual spend by 2030. Sixty three percent of this will be spent on PreK to K12. Over the next 10 years, we will see more than 350M post-secondary graduates and over 800M more K12 graduates than there are today. These numbers tell us just how imperative it is that the education industry adapts to population growth. It’s important to also advance technologies in developing regions, and create new solutions to support an unprecedented number of learners seeking re-skilling and up-skilling.

Recently, we have seen how critical cloud-native EdTechs are to the sustainment and advancement of global education. We have learned how people suffering from natural disasters and pandemics are able to continue their education outside of the classroom. As a result, education is benefitting from an uptick of new technologies enabling greater successes than ever before.

Technology Considerations: It’s impossible to overstate the importance of innovation. Failure to innovate means

that your business risks falling behind. Traditionally innovation can be difficult and expensive. Creating new tools from scratch, implementing new ideas, and experimenting can be hard to define, resource-intensive, and require a lot of time and investment. Innovation can vary, ranging from developing new products or services, personalizing customer experiences, or entering a whole new market segment.

If you are thinking about incorporating innovative new ideas into your existing EdTech solution, but not sure where to start, consider the following features:

• Chat-bots and virtual call centers for students,

teachers, and caregivers to quickly get access to

FAQs

• Amazon Alexa Skills

• Personalized content and learning pathways

• Study materials for Mobile Devices

To create a question-and-answer chat-bot (QnABot), you can use Amazon Lex and Amazon Alexa to provide a conversational interface for your Q&As. You can quickly get started with an AWS CloudFormation template that provides everything you need in an easily deployable package. This chat-bot allows your users to ask questions and get quick and relevant answers. It can also ask questions to your users and process responses.

Amazon Alexa is Amazon’s cloud-based voice service available on hundreds of millions of devices from Amazon and third-party device manufacturers. With Alexa, you can build natural voice experiences that offer customers a more intuitive way to interact with the technology they use every day. We offer a collection of tools, APIs, reference solutions, and documentation to make it easier to build for Alexa. You can get started with the Alexa Skills Kit here.

Amazon Lex is a service for building conversational interfaces into any application using voice and text. It provides the advanced deep learning functionalities of automatic speech recognition (ASR) for converting speech to text, and natural language understanding (NLU) to recognize the intent of the text. This functionality enables you to build applications with engaging user experiences and lifelike conversational interactions. Learn more about Amazon Lex.

AWS EdStart Member, Knowt Inc. created an app that uses AI and ML to automatically generate quizzes and flashcards from learning materials to help students study and teachers create assignments. At the height of the pandemic, Knowt, realized that teachers needed a way to quickly create and deliver remote assignments. Teachers had to shift from recirculating physical assignments to creating online projects from scratch in a matter of days. To solve this, Knowt developed custom AI models to

2. Rapid Innovation

process unstructured text from multiple sources to make quizzes and flashcards instantly enabling users to shift from taking notes in class to studying in seconds.

In 2020, this functionality was also extended to teachers giving them the ability to create and distribute assignments in minutes. As a result, students can use their own notes, to make personalized quizzes and flashcards. As they continue on their path to innovation in 2021, Knowt is adding new features, which enable students to collaborate with shared notes and discover material from hundreds of textbooks.

“Development issues are common when building something innovative and new. Certain challenges

require extra care and attention. In our effort to launch our newest version, we faced many

challenging issues. The AWS EdStart team was there to guide us through them. They tackled our

problems with the same ownership and urgency we had. Without their support launching on our

launch date would not have been possible.“

— Abheek Pandoh, Chief Executive Officer,Knowt, Inc.

Industry Insights FromAWS EdStart Collaborators

“EdTech innovation provides a unique opportunity for education equity, and employment creation which helps to, bridge the digital divide in India. At TiE Bangalore, we see our collaboration with AWS EdStart as an opportunity to enable this expansion by providing ongoing education, mentoring, and white glove treatment to startups.”

— Madan Padaki, President, TiE Bangalore

“Germany is the largest education market in Europe, with the highest education budgets to spend. Due to the pandemic, the market is rapidly accelerating, and creating new opportunities for EdTechs. As a result, do your research on your local market and target your service or product in order to have the opportunity to participate in the larger budget allotments that are becoming available.”

— Tobias Himmerich, Founder and Chief Executive Officer, EDUvation

”Singapore has identified EdTech as a vertical that will emerge stronger post pandemic with various opportunities arising across the region. Due to this, collaborating with AWS EdStart is perfect for us as we strive to build and strengthen the EdTech ecosystem in Southeast Asia. We work closely together and as a result, we our able to provide our EdTech startups with a strong support system as they scale internationally and move into other markets.”

— Alex Ng, Managing Director, EduSpaze

“Technology empowers education, and education leads to innovation, and the AWS EdStart program helps accelerate Chinese EdTech innovation. As a platform to integrate entrepreneurial elites and industrial resources in the industry, we work with AWS EdStart to jointly promote the reform and development of the education industry.”

— Mingyi Chai, Executive Director, Oriental Education Institute

“Out of the many thousands of startups we see each year, many of the most innovative and promising companies are in the education and workforce vertical. The pandemic has only accelerated the innovations challenging the way we learn, teach and work. With investment interest in this industry taking off, early stage education innovators are in need of mentorship, coaching and business plan development to get access to early capital. gener8tor is excited to be in the mix of reputable organizations that are providing these resources to education’s disruptors.”

— Eddie Olson, Managing Director,OnRamp Education and Workforce Innovation Accelerator

EdTech Startup Guide, June 2021

15EdTech Startup Guide | June 2021

Many EdTech founders are mission-based with aspirations to solve the most pressing needs of their communities. Historically, many EdTech startups were founded with the intention of supporting their local communities rather than customers around the world. However, as technology has democratized learning and communities are expanding beyond customers located in close proximity, the sphere of EdTech influence has grown exponentially.

This shift has evolved founder’s approaches to customer demographics and target users, as many founders realize that their customer base is global rather than local. Setting up the foundation for a global approach from day one allows companies to be more agile. It reduces long-term costs, saves time, and supports innovation.

Technology Considerations: The AWS infrastructure is the most secure, extensive, and reliable cloud platform, offering over 200 fully featured services from data centers globally. When deploying your applications, you have the flexibility to select a technology infrastructure that is closest to your primary target of users. This is important for EdTechs who want to scale beyond their direct community, or distribute content around the world.

3. Market Expansion

If you are thinking about expanding into additional markets, you can enable your solution to:

• Provide users with the ability to develop or access content from anywhere

• Help make sure localized content is available to support a diverse set of users

• Be compliant with data sovereignty laws

To do so, we recommend thinking about using Amazon CloudFront or Amazon Translate. CloudFront is a fast content delivery network (CDN) service that securely delivers data, videos, and applications to customers globally with low latency and high transfer speeds to help provide global content to your users. Amazon Translate is a neural machine translation service that delivers fast, high-quality, affordable, and customizable language translation, to help with language localization.

With Amazon Translate, you can localize your websites and applications for diverse set of users, easily translate large volumes of text for analysis, and efficiently enable cross-lingual communication between users in real time.

AWS EdStart Member, Genially developed an all-in-one online content creation tool to enable anyone to build interactive and animated presentations, images, and infographics to improve the communications experience.

Genially developed this tool to help people communicate in easier, more effective, and more creative ways. As a startup, it initially ran into challenges scaling its solution. With guidance from the AWS EdStart team, the Genially team took advantage of AWS Elastic Beanstalk, CloudFront, and AWS Lambda, to scale its content creation tool to over 8M people.

“We decreased our IT operating costs by 50 percent by migrating to AWS. This was very helpful, and we were able to invest that money into other areas of our company. Without AWS we could not have implemented a

solution that runs on any browser around the world. We have democratized a service that in the past would be impossible, expensive, and slow.”

— Chema Roldán, Founder & Chief Executive Officer, Genially

This resulted in decreasing their costs by 50 percent, scaling to more than 8M users, and adding 30K new users every day while delivering its content to users globally.

17EdTech Startup Guide | June 2021

Industry Insights FromAWS EdStart Collaborators

AI and ML are powering today’s EdTechs. With more data available than ever, EdTech’s are able to either create their own AI and ML models or take advantage of many out-of-the-box solutions. AWS has made AI and ML highly accessible with the goal of putting it into hands of every developer. With the accessibility of the cloud, coupled with the explosion of data, it has also become accessible to all stages of business.

ML is no longer restricted to tech giants or academic researchers; it’s available to anyone with an interest in using it. We are seeing EdTech startups build entire business models based on AI and ML. It’s easier than ever to analyze, translate, and/or transcribe audio and video or deliver personalized content to parents, students, teachers and administrators. The benefits of implementing are vast and it’s still early days, EdTechs are discovering what’s possible as they strive to deliver safe, accessible, effective, and personalized learning experiences to their users.

Technology Considerations: AI and ML are transforming education and fundamentally changing teaching and learning. Educators are using it to spot struggling students and taking action to improve success and retention, and researchers are using it to accelerate new discoveries and insights. EdTechs are using it to expand the reach and impact of online learning content through localization, transcription, text-to-speech, and personalization.

If you haven’t incorporated AI and ML into your solution already, learn about some of the key benefits of integrating it below. AI and ML can:

Improve Student Outcomes: AI and ML are transforming how education institutions track student performance and spot issues. It’s also enabling the development of personalized learning approaches and helping educators develop tailored learning pathways for individual students, while institutions are using it to enhance the campus experience and enable self-service capabilities.

Increase Online Learning Reach: Traditionally, video lectures, discussion groups, and other online learning content has been cost-prohibitive for transcription and translation at scale. Deep learning powered translation, transcription, and text-to-speech services can now provide accurate and low-cost options to make content accessible and safe for students around the globe.

Accelerate Research & Discovery: Research teams without deep data science and expertise can also now leverage AI and ML to accelerate research and drive discovery, along with content search and discovery for scientific and research document repositories.

Edinno is seeing a surge across the global EdTech startup community both in company formation and emerging boot camp, accelerator, and investor support. Currently, the trend of mastering your home market, and then quickly pivoting to scale globally to English speaking countries is pervasive. Edinno is meeting and connecting with founders every week who are interested in learning about global expansion and working with them to figure out how, when, and why to do it.

“Edinno is excited to collaborate with AWS EdStart to continue the democratization of information and human capital for new founders through events, platforms, and information. Together, we developed a new EdTech founder series as a part of a broader new initiative to create stronger organizational relationships that will help foster and nurture collective support for EdTech founders around the world.”

— Ben Bungert, Co-Founder, Edinno

4. Integration of AI & ML

Industry Insights FromAWS EdStart Collaborators

EdTech Startup Guide, June 2021

AI and ML can be integrated into almost any EdTech solution including:

• Making your contents searchable using content-based tagging

• Recognizing and extracting information from audio and video

• Developing personalized learning experiences

If you are interested in integrating any of the above solutions, consider using Amazon Sagemaker, Amazon Rekognition, or Amazon Personalize.

Amazon Sagemaker helps build, train, and deploy ML models quickly by bringing together a broad set of capabilities. Amazon Rekognition makes it easy to add image and video analysis to your applications using proven, highly scalable, deep learning technology that requires no ML experience to use. You can identify objects, people, text, scenes, and activities in images and videos, as well as detect any inappropriate content. Amazon Personalize enables developers to build applications with the same ML technology used by Amazon.com for real-time personalized recommendations, with no ML expertise required.

Honorlock has revolutionized the way education institutions protect the academic integrity of online courses and assessments. Used by three of the ten largest universities in the US, Honorlock’s proprietary features provide educators with the assurance that their test is protected, and students with the flexibility of proctored exams whenever and wherever they need it. Honorlock is dedicated to providing world-class service and support 24/7. Honorlock wanted to provide a less anxiety ridden exam experience that maintained the highest level of integrity and security when delivering exams remotely.

As a solution, Honorlock uses a hybrid approach using AI, powered by Amazon Rekognition, to monitor the student without a live proctor watching the exam. Only when the AI detects suspicious behavior such as a smart phone, new person or voice, will a live human proctor intervene, but even then, communication is done via chat-bot and not face-to-face.

Honorlock accelerated their migration to AI and ML services and were able to scale from over 2K concurrent exams to over 100K and support 24M Amazon Rekognition calls an hour.

“The AWS EdStart program has been instrumental in Honorlock’s recent success in a few notable ways. First and foremost, there is the exposure to, and availability of, the subject matter experts the program makes

available to AWS EdStart Members. We also found great value and assistance in the AWS Promotional Credit which helped to offset AI and ML costs, and allowed us to invest that capital into areas of the

business to unlock additional growth opportunities.”

— Andy Hernandez, Senior Director of Product Engineering, Honorlock

“At UIncept we have seen almost 80 percent of our EdTech entrepreneurs focused on K12 and test preparation, with a smaller number of startups focused on higher ed, vocational, and corporate segments. In the next two to three years, we anticipate that we will see new AI-based EdTech startups within the K12 and test prep domains that will fundamentally change how teaching and learning is done today. We are working with AWS EdStart to capture these emergent startups at an early-stage and working with these organizations as they support and scale to change the future of education.”

— Manish Gupta, Founder, UIncept

“Working with the AWS EdStart is exciting. It is helping us unlock the power of learning communities for our EdTech founders and enabling them to develop the next generation of online learning resources.”

— Nikhil Sinha, CEO, OneValley

“We should see simulation solutions for labs and virtual environments emerging, as well as the use of AI in learning. There is an opportunity for EdTech solutions to improve school and financial management processes. AI can be used to do this, and is also a technology that should be part of everyday learning.”

— Thiago Chaer, Co-Founder and Chief Executive Officer,Future Education

EdTech Startup Guide, June 2021

21EdTech Startup Guide | June 2021

Providing equal access to high quality learning opportunities and closing the digital divide with accessible products is important. According to the World Bank, there are over 1B people around the world with some form of a disability. EdTechs and education institutions are thinking big about leveraging the AWS Cloud to build inclusive solutions for learners with cognitive and physical disabilities. With the access gap widening and more students relying on technology to learn, incorporating assistive learning technology into the education experience is critical.

Technology Considerations: Quality, inclusive, and relevant education for all helps break the cycle of poverty and reduces inequalities worldwide. According to the Charter for Compassion, a marginalized identity is anyone who feels or is “underserved, disregarded, ostracized, harassed, persecuted, or sidelined in the community.” Marginalized groups include but are not limited to immigrants, refugees, those who are developmentally delayed or physically disabled, and people of differing gender, race, sexual orientation or socioeconomic status. As education continues to shift to an online format, the potential for marginalized learners to fall behind increases due to the limited number of resources and tools available to help these students succeed. Inclusive cloud innovation can level the playing field for students. Instructors at California State University (CSU) - Chico use Blackboard Ally, which leverages the AWS Cloud to make digital learning content more accessible by automatically running course materials through an accessibility checklist. Behind the scenes, Ally leverages ML algorithms to identify common issues with learning content. Ally integrates into the learning

5. Accessibility & Inclusivity

management system (LMS) and outputs include different modalities of original content like Semantic HTML, audio, electronic braille, and language translation. Within the LMS, instructors gain access to institutional reporting on student usability and accessibility scores. The university started phase one of Ally with an overall content accessibility score of 35 percent, which is close to the national average, but after six weeks of working with a pilot group, that number reached 80 percent. Students at the University of Massachusetts (UMass) Amherst use Echo360, which runs on the AWS Cloud, to access engaging, active learning environments that extend beyond the classroom. Echo360’s cloud-based platform provides a classroom video capture and distance learning platform that enables students to review recorded lectures and classroom activities alongside a transcript. Echo360 uses Amazon Transcribe, an automatic speech recognition service, to add speech-to-text capability and closed-captioning. Transcripts are then catalogued to provide a smarter search experience.

For students at UMass Amherst, increased access to real-time content creates a more equitable learning environment where all learners have the same tools. For example, a student with a sensory disability (for instance, a student who has difficulty hearing) can experience a lecture with transcribed class content.

If you’re thinking about integrating accessible technologies into your EdTech solution, consider the following:

• Speech to text and closed captioning to assist with hearing difficulties

• Text to speech to help those who may have vision challenges

• Mobile ready solutions for improved access

Two AWS services to support these include Amazon Polly and Amazon Transcribe. Amazon Polly is a service that turns text into lifelike speech, allowing you to create applications that talk. Amazon Polly’s text-to-speech (TTS) service uses advanced deep learning technologies to synthesize natural sounding human speech. With dozens of lifelike voices across a broad set of languages, you can build speech-enabled applications that work in many different countries.

Amazon Transcribe makes it easy to add speech to text capabilities to your application. It uses a deep learning process called automatic speech recognition (ASR) to convert speech to text quickly and accurately. Both of which, can help you make your technology more accessible to others. Domlexia in Brazil provides digital learning facilitation solutions for neurodiverse students in an integrated way, bringing identification and training tools to learners, parents, teachers, therapists, and schools. Their challenge was to determine how to provide materials to facilitate learning for those with dyslexia, dyscalculia, dysgraphy, and attention deficit hyperactivity disorder (ADHD).

As a result, Domlexia provided digital learning facilitation solutions for neurodiversity students in an integrated way, bringing identification and training tools to learners, parents, teachers, therapists, and schools to help learners improve their skills and overcome learning challenges.

With AWS, Domlexia is able to bring online, personalized solutions to their customers, irrespective of where they are and what devices they use, along with address under-privileged and marginalized sections of the student community by building innovative solutions.

“With AWS, we have the possibility to securely store student data and performance so that we can use it to further improve their learning. In this way, AWS helps create more adaptive learning.

The support from AWS EdStart and the credits provided through the program have enabled us to provide part of our service for

free, resulting in over 10,000 downloads, and the ability to extend our services to underserved populations.”

— Nadine Heisler, Co-Founder, Domlexia

EdTech Startup Guide, June 2021

23EdTech Startup Guide | June 2021

In a recent EdWeek Market Brief survey of 321 district administrators, 67 percent of respondents said they intended to spend federal stimulus dollars on social-emotional learning (SEL) support. A hot topic in the education space, SEL is becoming more prevalent due to a sharp rise in both awareness of and recognition of holistic student wellness as a contributing factor to success.

The need for SEL support is further exacerbated by the historic events occurring worldwide including a global pandemic, political turmoil, and issues of racial inequity. School leaders are beginning to understand and respond to the need for additional support such as helping students understand self-care, professional development for teachers on how to lead discussions about SEL topics with students, and by providing help for families by integrating technology into the classroom that supports this.

Technology Considerations: Educational institutions are still responding to SEL challenges that have become more complicated since the start of the pandemic. New learning models, and rising health and safety costs, are forcing leaders to rethink ways to deliver a quality education in a more cost-effective, agile, and scalable way. Despite these challenges, educators report that technology has made it easier and faster to innovate, and meet students’ evolving needs.

One of the concerns associated with online learning and the lack of social interaction among students is its potential effect on the mental health of students and faculty. In fact, a recent survey of 300 university presidents by the American Council on Education identify student mental health as a primary concern. One solution that education institutions can implement to help students and faculty with their mental health is to set up hotlines and chat-bots, which can help health professionals spend more time with remote students who are struggling. With the continuation of online

6. Social Emotional Learning

learning some schools have shifted their mindset and implemented cloud-based contact centers to help schools virtually answer student and staff questions at any time, whether late at night or early in the morning.

For example, when the pandemic hit in the US, Los Angeles Unified School District (LAUSD) , which serves almost 700k students, needed to move fast. With AWS, LAUSD was able to stand up call centers using Amazon Connect within a matter of days. These call centers were used for the school district to field IT questions, provide remote support, and enable staff to answer calls. They also opened an additional mental health hotline for those in need of help to manage fear, anxiety, and other challenges.

“In March 2020, we had to make the tough decision to put safety first and close our campuses. We put together a COVID-19 help hotline, and that’s really where AWS

stepped in and helped establish a cloud-based contact center for Los Angeles Unified,” says Dr. David Baca, chief of schools of the mental health hotline that has 20-25 clinicians and three administrators who staff the hotline each day. Our clinicians try to get callers to verbalize their feelings and provide coping strategies.”

Since the establishment of these call centers, agents have handled over 40K incoming calls, allowing LAUSD to provide a sense of continuity to their students, staff, and their families. With the ongoing pandemic, and online learning expected to continue, integrating solutions such as these to support SEL is critical.

EdTech Startup Guide, June 2021

25EdTech Startup Guide | June 2021

In 2020, a report from market research firm HolonIQ tallied over $16B of venture capital raised by education companies across the world, with China and India accounting for over 77 percent of that total. In the US, EdTech startups raised over $2.2B in venture and private equity capital across 130 deals, according to the EdSurge EdTech funding database. That’s a nearly 30 percent increase from the $1.7B invested in education previously. It is predicted that EdTech spend will increase by $2.4B in 2021, up from $35.8B to $38.2B. Fundraising Considerations: With funding becoming more plentiful, it’s important to understand the types of fundraising opportunities available to continue to scale and grow your business. To understand the different forms of funding available, please see the sidebar on Page 27.

Regional Breakdown Globally we are seeing consistent themes, yet each region is unique. The global EdTech market segment is anticipated to reach 285.2B by 2027, growing at a compound annual growth rate (CAGR) of 18.1 percent from 2020 to 2027, according to a new report by Grand View Research, Inc.

The US education market for EdTechs continues to flourish, fueled by an optimistic attitude towards EdTech amplified by the global pandemic. As educational institutions return to face-to-face learning, there is mounting pressure for districts to include a hybrid or entirely virtual option for students that may feel more comfortable learning from home. Striking the right balance between in-person, hybrid, and virtual is fueling increased use in software for learning, organization, and administration, leading to an increase in EdTech sales and lead opportunities.

7. Fundraising

Also, in the US, funding is being provided at the state and federal levels to make it possible for children to have the opportunity to attend preschool, especially children coming from families living below the poverty line. Federal funding for preschool programs usually comes in the form of Title-I grants dispersed by the United States Department of Education. Likewise, over the past ten years, federal early learning programs have seen steady, with significant progress through increased, bipartisan investments from both Congress and the White House such as the American Rescue Plan.

The Fiscal Year (FY) 2021 budget agreement included, among other increases, an $85M increase for the Child Care and Development Block Grant and a $135M increase to Head Start and Early Head Start. There is special emphasis placed on working with at-risk or special needs children. In fact, money is being made available, in the form of Special Education Preschool Grants to fund preschool programs for special needs children.

In addition, funding models for EdTech is changing, with non-traditional and non-dilutive funding opportunities becoming more attractive to early stage EdTechs. Given the significant increase in the amount of financial investment in EdTechs, entrepreneurs are taking advantage of funding sources at an earlier stage than would previously be available, as well as are leveraging debt-based financing and other non-traditional sources. Another underlying thread prevalent in the US education system is the need for EdTechs to consider every student when designing solutions for the classroom.

Being diligent on issues related to diversity, equity, and inclusion can help entrepreneurs ensure that inherent biases are eliminated and every student is considered.

Ways to do this include:

• Launching cloud-based contact centers to provide customers support 24/7

• Integrating chat-bots to immediately answer questions real-time

• Analyzing student communication and work for indications of support

One way to implement a cloud-based contact center is by using Amazon Connect a low-cost, omnichannel cloud solution for remote helpdesks, counseling hotlines, or other departments that need to provide inbound and outbound support. Amazon Connect provides a unified contact center for voice, chat, and task management, and offers high-quality audio capabilities, natural interactive voice response (IVR), and interactive chatbots that operate seamlessly with web and mobile chat contact flows.

For customer conversations that require additional work (e.g., email, ticket, or claim), follow-up tasks are created in Amazon Connect Tasks without the need to switch between applications. Watch a demo to learn more about how you can incorporate into your solution.

“With the return to schools this fall, teachers and administrators will be facing learning gaps and

mental health needs beyond the typical summer slide and SEL skill-building. These needs will

require greater interoperability to monitor school’s progress, to measure the many dimensions of each student across education platforms, and tools that unite a student’s continuum of care. At the district

level, administrators will need to link student outcomes with technology investments to prove

out ROI (Return On Investment) and strategically deploy resources to address inequities.”

— Koji Takahashi, Managing Partner,EduLab Capital Partners

EdTech Startup Guide, June 2021

Like the rest of the world during the pandemic, the Brazilian education market needed to suddenly use technology to enable classrooms and implement new teaching practices, making content available remotely to students. With the shift lasting for over a year, it is now estimated that schools will not return to pre-pandemic operating models, and that education institutions will need to accommodate this by definitively adopting existing technology solutions or by adopting new technologies in the wake of this process.

According to the April 2021 report by the Innovation Center for Brazilian Education CIEB, in partnership with the Brazilian Startup Association ABStartups, Brazil currently has 566 active EdTechs, and of these, 65 were identified as early stage, with potential to meet the high demand for innovation in the education sector. Approximately 70 percent of these new EdTechs were created within the past year, with 50 percent concentrated on Southeast Brazil, and 33.8 percent focused on the software as a service (SaaS) business model. Of the total active EdTechs, 50 percent include a digital content offering as a part of their solution.

Of the 208 EdTechs who responded to the report’s qualitative interview, about the impacts of COVID-19, 63.8 percent said they maintained or increased their revenue in 2020, forty percent hired and 88.8 percent maintained their teams, with no need to do layoffs, showcasing that as we exit the pandemic, there are great

opportunities for existing EdTechs to consolidate and new ones to emerge.

In Europe and the Middle East (EMEA), the pandemic continued to accelerate EdTech adoption and investment on a global level reaching $16.1B, with VC investment only reaching $447M in Europe and the Middle East during 2020, significantly lagging behind the US, India, and China. We expect VC funding will increase in 2021 as the industry grows further and institutional adoption increases. Despite the varying degrees of a successful transition to online learning throughout the region, the EMEA education market, will still be catching up with other parts of the world over the next two to three years.

Moreover, European EdTech solutions are being exported globally due to high-quality solutions, a prestigious education market, and skilled problem-solvers. Based on this, we have seen acquisitions of startups that have demonstrated success during the pandemic.

With over 5,000 EdTechs, the EMEA segment has varied in its approach to collaboration and development of the EdTech ecosystem. With education systems differing across the region, the level of adoption and standardization has varied significantly. Within Europe, the Nordics have excelled at collaborating together, whereas the Middle East countries are solving their challenges on an individual basis.

“Now is an opportune time to create disruption in early childhood education (ECD). There is increased attention on the importance of early development programs and increased funding sources at the

local, state, and federal funding for the earliest learners (0-5 years). Hotspots of innovation include child care, screening and assessment,

and parenting education. Advances in the use AI, ML, and voice technologies make it possible to create equity for all families.”

— Michael Dougherty, Partner, Promise Ventures Studio

The governments in the Middle East and Africa (MEA) are adopting smart education as a means of economic development and prosperity. Therefore, they focus on development of skilled professionals for the booming MEA EdTech and Smart Classroom market. Governments across the region are constantly investing ~20 percent of their nation’s government expenditure on the education sector, which is a significant amount compared to average allotments. Additionally, the government is supporting e-learning initiatives focused on increasing education delivery, and the government is also pursuing different ways that students’ parents can directly communicate with their teachers.

Presently, children and individuals under age 24 represent nearly half of the region’s population. This presents a huge opportunity for the EdTech and smart classroom solution companies catering to schools, colleges, and universities in this region. According to a report published by Marketquest.biz, the EdTech and smart classroom market in MEA is expected to grow from $3,565M in 2019 to $7,626M by 2027; and is estimated to grow at a CAGR of 9.8 percent from 2020 to 2027.

The future of EdTech in the EMEA will continue to revolve around ROI and increasing standardization. As education transitions towards a more data-driven approach, it will allow comparisons to be made across countries and across borders that will facilitate rapid growth.

Grants: A startup small business grant is monetary funding from the government or an organization that is given in order to help small companies and nonprofits succeed in building and growing their business. Unlike loans, you don’t have to pay this money back.

Friends & Family: For those who are able, you can consider reaching out to your network of friends and family for small amounts of cash.

Angels: An angel investor (also known as a private investor, seed investor or angel funder) is a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. Often, angel investors are found among an entrepreneur’s family and friends.

Venture Capital (VC): Approach VCs when you need large amounts of money and know your startup can deliver a return. The main objective of VC funding is return on investment (ROI) to satisfy investors. VC funds bring their expertise and support the startups within their portfolio in order to accelerate growth.

Corporate VC (CVC): CVCs are funds that are fully owned by one company willing to invest in startups for many reasons.

Accelerator Or Incubator: Accelerators advance growth of an existing company while incubators develop disruptive ideas. Accelerators focus on scaling a business while incubators focus on innovation.

Pitch Competitions: A pitch competition is a contest where entrepreneurs present their business concept to a panel in the hope of winning a cash prize, investment capital, brand awareness, and networking opportunities. Pitch competitions can be a way to introduce yourself to the world of VC and angel investors. Prizes for these competitions, can be AWS Promotional Credit, one-on-one time with key fundraising stakeholders or mentors, and even cash prizes.

Fundraising Types

Industry Insights FromAWS EdStart Collaborators

EdTech Startup Guide, June 2021

29EdTech Startup Guide | June 2021

Industry Insights FromAWS EdStart Investor Community

“Know your numbers and your customers. I always want to hear about product pricing (now or in future) and how you landed on your price. Show thoughtfulness about the market and how customers are also (maybe your best) investors in the product. Think about where you see the product in the overall ecosystem or space that you are building in. How does your company fit into the overall puzzle of your given sector? I also want to know how much runway the investment will buy you. The lean-ness of the company is a key component to establishing confidence in the team.”

— Jessica Millstone, Managing Director, Copper Wire Ventures

“On the funding side, we expect EdTech to again have a record year, however money is disproportionately being allocated to follow-up rounds, instead of new seed investments. Therefore whilst amounts are high, numbers of deals are lower than we would expect. We recommend measuring early metrics for your business and watch how they grow. Your customer acquisition cost and lifetime value will be important metrics that will guide your valuation.”

— Tamas Haiman, Co-Founder, SuperCharger Ventures

“Understand the money flow, buying cycles and how to empower your customers through evidence-based solutions to accelerate learning.”

— Rita Ferrandino, Co-Founder, ARC Capital Partners

“When you meet with us there are several key questions that we ask, (a list is on our website). Is there a technological problem or bottleneck that you have solved? What do you do or make? Describe the key product(s) and its features. Is the company addressing a major problem preventing an economic mobility gap (e.g. loss points within education/workforce journey)? We are interested in investing in companies that solve the education / work skills gap.”

— Mark Grovic, General Partner and Founder,New Markets Venture Partners

According to Grand View Research, Asia Pacific is anticipated to register the fastest CAGR of 22.6 percent from 2021 to 2028. This growth can be attributed to the rising usage of the internet and smart devices among the masses. In recent times, developing countries, such as India, have witnessed a wave of affordable broadband connectivity, resulting in numerous companies reaching out to the population. This highlights an opportunity across the region for a set of new players to enter the market that focus on the next half billion users.

In India, by 2022, online education offerings across K12 are projected to increase 6.3 times to create a $1.7B market while the post-K12 market is set to grow 3.7 times to create a $1.8B market. This is going to create meaningful opportunity for incumbent players as well as space for multiple new startups. Creating platforms that focus on personalized learning, AI and ML, student engagement, and a focus on accessibility (scalable, cloud infrastructure) will help empower learners across the region and continue to fuel new EdTechs.

Looking at Asia, in China, according to 100ec.cn, the EdTech market was projected to expand 22% YOY to 423B yuan ($64B) in 2020, with EdTech users surging 23% to 331M people. As a result of the pandemic, online learning has skyrocketed, while also reducing the education disparity between students in rural areas and coastal cities. Unlike the US focus on higher ed, K12 constitutes the largest segments of China’s EdTech market. Competition in China’s EdTech sector is fierce with numerous players. Marketing costs and heavy discounts to attract and retain customers are eating into profitability, and only the strongest EdTechs are surviving, with differentiation or specialization acting as the key to achieving long-lasting growth and profitability.

Outside of China, in Taiwan, early stage EdTech startups are also on the upswing, with the Taiwanese government implementing competence-driven formal education and bilingual country policy, resulting in a demand for additional EdTechs in the market. Although the government previously planned to invest in the smart classroom, a majority of the budget went to hardware solutions and big enterprises rather than software applications and startups.

Next to Taiwan, Hong Kong (HK), despite the small local market, is seeing early stage EdTechs booming with schools more willing to adopt EdTech solutions from startups. Prior to COVID-19, schools had experience using online classrooms giving them an advantage when implementing “school from home” programs. However, since many of mainland and international students might not return to school, they are experiencing smaller enrollments and as a result may be forced to freeze their existing EdTech budgets.

EdTech Startup Guide, June 2021

31EdTech Startup Guide | June 2021

It is an exciting time in the EdTech industry and an excellent time to launch your company. As an EdTech startup AWS is here to help you, below are a few resources to get started.

1. AWS EdStart: The AWS EdTech startup accelerator helps entrepreneurs build the next generation of online learning, analytics, and campus management solutions on the AWS Cloud. The accelerator enables EdTech startups to move faster through benefits such as equity-free financial support through AWS Promotional Credit, technical training and support, access to a global community of EdTech experts, and more. There’s a reason more startups build on AWS than any other provider: We’re here to help you succeed, from ideation through establishment. AWS EdStart helps EdTech entrepreneurs build solutions that are secure, scalable, and cost effective. If your company has big dreams for revolutionizing education, apply for AWS EdStart whenever you’re ready to start your journey.

2. AWS Training & Certification: You can bring in new staff to handle the shift. But the reality is that training your existing team is faster, more scalable, and less expensive. We provide training, either in a classroom or online, making it flexible for your workforce to learn at their own pace. We can help bring wider cloud skills to your business that will continue to unlock the full potential of the cloud once you’re ready for the next steps.

3. AWS Partner Network (APN): Get help from our comprehensive network of partners, from consulting to technology. We have experienced delivery partners that can help your business get the most out of the AWS Cloud, and deliver on your specific cloud objectives.

4. AWS IQ: Complete projects faster with AWS Certified freelancers and consulting firms. Pay directly through AWS only when work is complete and you are satisfied.

5. AWS Marketplace: A digital catalog with thousands of software listings from independent software vendors that make it easy to find, test, buy, and deploy software that runs on AWS. Explore education and learning solutions in AWS Marketplace.

6. AWS Events & Webinars: AWS has an active learning community where you can attend upcoming events, training, networking conferences, demos and more. Register for some of our upcoming events.

7. AWS Startup Kit: The AWS Startup Kit provides resources to help startups begin building applications on AWS. Included with the Startup Kit is a set of CloudFormation templates. These templates create fundamental cloud infrastructure building blocks including an Amazon VPC, a bastion host, and an (optional) relational database. The templates are available here.

Next Steps

Special thanks to the AWS EdStart Members, Collaborators and industry experts highlighted in this guide.

• Roybi• Class2Class• Knowt• Genially• Domlexia • EdTech Impact• GG4L• LearnLaunch• Catalyst at Penn GSE• Eduspaze • Eduvation• Oriental Education Institute

• TiE Bangalore• Edinno• UIncept• OneValley• Future Education• Supercharger Ventures • Honorlock• EduLab Capital Partners• Promise Ventures Studio• Copper Wire Ventures• New Markets Venture Partners• Arc Capital Development

Learn more about AWS in education and AWS EdStart today.

aws.amazon.com/education