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In the last few years, over 50 EdTech startups, including Woz U, have found both a home and a path to commercial success in Phoenix, Arizona. Despite its distance from the original Silicon Valley located in the San Francisco Bay Area, Phoenix has become a “Silicon Valley of EdTech.” But, what has fueled the massive growth in the area and why should investors look to Arizona for the next EdTech success story? In this article, we delve into the past, present, and future of Phoenix EdTech.
Phoenix’s history as an incubator for EdTech startups begins in the 1980s and ‘90s with the rise of the Apollo Education Group, who founded University of Phoenix, one of the first commercially successful for-profit colleges with both online and live courses. According to Frank Healy, a former employee of Apollo, the enormous amount of money spent by the Apollo Education Group helped create a space conducive to EdTech. “Because of the dollars they were spending, all the businesses flocked here,” recounts Healy.
Ten years after launching their online program, the University of Phoenix had over 100,000 students enrolled. In 2008, University of Phoenix was the top recipient of student financial aid in the US, with $2.48 billion in funding. Just two years later, the University of Phoenix would reach peak enrollment of over 470,000 students and revenues of $4.95 billion. Although the University of Phoenix would later encounter criticism and lose nearly 75% of their student enrollment in the following years, the rise of the University of Phoenix helped establish a culture of innovation in the area.
Two of the nation’s most successful EdTech startups in recent years are located in Phoenix: Parchment and CampusLogic. Founded in 2003, Parchment is an EdTech solution that allows students to store and send their official transcripts digitally to employers. Since launch, they’ve helped graduates send over 20 million transcripts and credentials across the globe.
CampusLogic is another success story from Phoenix that won the top EdTech investment of 2018 in postsecondary education with an investment of $55 million. CampusLogic’s mission is to help students easily navigate the process of obtaining financial aid to reduce student debt.
Phoenix also owes its role as an EdTech haven to the success of Blackboard, one of the most popular Learning Management Systems (LMS) in the United States. While headquartered in Washington D.C, Blackboard recently established new offices in Phoenix, which has attracted even more EdTech talent to the area.
According to Arizona Technology Council CEO Steven Zylstra, these businesses helped created a clustering effect in the area, which helped other startups and companies to share resources and expertise. Additionally, the entrepreneurial culture of Arizona has helped the EdTech industry in Phoenix expand.
Despite a wealth of EdTech startups in the Phoenix area, capital has been much more difficult to come by. With a lack of local venture capital and private equity groups, EdTech companies in Phoenix have had to look outside the state for funding. However, this hasn’t caused them to slow down one bit. Statistics from EdTechAZ show that EdTech companies in the valley have secured more than $100 million in venture capital funding in just the last several years. And, as “Phoenician” EdTech companies continue to rise, the area itself is gaining a reputation for producing great EdTech companies.
Arizona’s status as an innovator in education has also helped EdTech flourish in Phoenix. In the Center for Education Reform’s 2017 Parent Power Index, Arizona was listed as one of the top three states in the U.S. for school choice. Charter schools in Arizona have been cited as helping the state become a leader in offering choice for K-12 education as well as disrupting traditional education in the U.S. On the postsecondary level, universities like Arizona State University have helped create an innovative mindset in the area. In fact, ASU has been ranked as the most innovative university in the nation for four years in a row by U.S. News and World Report.
Based in nearby Scottsdale, Arizona, Woz U has found itself at home among like-minded innovators in EdTech. Since launch in late 2017, Woz U has received incredible support from local K-12 schools, universities, and businesses. Woz U has even gone global, partnering with local governments around the world to provide students with the tech skills they need to succeed.
As an organization, Woz U has worked tirelessly to create a K-to-Career pipeline that prepares students for the future and helps them transition from each step of their formal education to a career in the real world. Our unique pipeline seeks to bridge the skills gap and also helps employers keep their current employees’ skills up to date while they search for new talent. And, Woz U’s greatest advantage is that it doesn’t compete with traditional education—it supplements it.
In traditional Arizona fashion, Woz U continues to establish relationships with fellow innovators in education and business leaders to help build a better future for the next generation of job seekers.