Formative Raises $70M to Revolutionize Student Learning & Analytics

The Evolving Landscape of Educational Assessment

In numerous educational systems, tests are considered a primary method for evaluating student knowledge retention and ensuring fair assessment through standardized examinations.

However, some argue that this approach has limitations. Today, a startup focused on alternative assessment and teaching methods has announced a substantial funding round following significant growth.

Introducing Formative: A New Approach to Learning Evaluation

Formative is a platform designed for K-12 educators. It allows teachers to create custom assessments or utilize assignments from existing digital resources and learning platforms.

The platform facilitates real-time assessment of student performance, enabling instructors to adjust their teaching strategies accordingly. It then employs progressive assignments to comprehensively track a student’s knowledge acquisition.

Formative has recently secured $70 million in funding, which will be allocated to expanding the platform’s reach and capabilities.

Funding Details and Growth Trajectory

Summit Partners led the funding round, with participation from previous investors including Fika Ventures, Mac Ventures, and Rethink Education. While the company hasn’t disclosed its valuation, this investment is categorized as a minority stake.

This funding represents a significant milestone for the startup, which was established in Santa Monica, CA, in 2013 and had previously raised less than $7 million.

The investment reflects Formative’s impressive performance. Driven by increased interest in digital learning tools – a trend accelerated by the Covid-19 pandemic and the shift to remote learning – Formative reports that its platform is now utilized in 92% of U.S. school districts.

Over four million students have engaged with “Formatives” (the term for assignments on the platform), and the company is experiencing approximately 700% annual recurring revenue growth.

Future Plans and Expansion

Formative intends to use the funding to develop more robust analytical tools for teachers, administrators, parents, and students.

The company also plans to expand its presence into international markets, currently focusing on English-speaking countries. Crucially, Formative aims to contribute to a broader re-evaluation of what constitutes a high-quality education and how it should be delivered.

Data-Driven Insights for Enhanced Learning

“A key objective is to serve as a gateway for evaluating the rigor and effectiveness of various curriculum streams,” explained Craig Jones, CEO and co-founder of Formative, in an interview.

“We are leveraging the extensive data collected – billions of student responses – to provide valuable insights into student learning for all stakeholders. This data can be used to improve teaching practices and enhance student outcomes.”

The Origins of Formative

Jones, a former science teacher, and Kevin McFarland (the COO) conceived the idea for Formative while pursuing MBAs at UCLA. They investigated how alternative pedagogical approaches could outperform traditional learning methods.

The startup’s name reflects the concept of formative assessment, which involves ongoing evaluation and adjustments to teaching to support student learning. This contrasts with summative assessment, which focuses on evaluating learning at the end of a unit or course, though both approaches can be complementary.

Digitization and Scalability

While the principles of formative assessment have long been recognized, Jones and McFarland realized that digitizing the process would enable it to be scaled effectively.

This would facilitate efficient assignment delivery, data collection, visualization, communication, and analysis.

The Impact of the Pandemic

The past year and a half have seen a significant surge in demand for digital learning tools. Schools and teachers already invested in these tools increased their engagement, while others rapidly adopted them to address the challenges of school closures.

This trend benefited the entire edtech sector, with companies like Kahoot also experiencing substantial growth and expanding their offerings.

Formative’s Response to the Crisis

Formative responded by launching the Covid-19 Assistance Program, offering free access to its platform. The platform is typically offered in tiered pricing, starting with a free basic service, and increasing to $12 and $17, or custom pricing for larger deployments.

Approximately 5,000 teachers and schools signed up for the free service, and many continued using it even after schools reopened, demonstrating an evolving integration of technology in education.

A Hybrid Approach to Learning

“We’ve observed a significant shift in the U.S., with more devices in classrooms than students,” noted McFarland. “Many schools are adopting a hybrid approach, utilizing devices strategically rather than relying on them constantly.”

He added, “They’re using a device as a tool, not a toy. We strive to support this flexible, hybrid learning environment.”

Seamless Integration and Accessibility

Formative prioritizes seamless integration with existing learning materials and platforms. It also provides digitized versions of popular publications, making them easily accessible and assignable through the platform.

The company positions itself not as a content provider, but as a facilitator, enhancing the accessibility and usefulness of existing educational resources. It also integrates with learning management systems to streamline the overall learning process.

Investor Confidence

This model has garnered support from both educators and investors.

“Formative accelerates learning for students, saves time for teachers, and quantifies results for school and district administrators,” stated Tom Jennings, an MD at Summit Partners. “We believe Formative possesses a unique combination of rapid growth, innovative products, satisfied customers, and a dedicated team. We are confident that our partnership will enable Formative to accelerate product development and global expansion.” Jennings will be joining Formative’s board of directors.

Correction: The company was founded in 2013, not 2011.