Education Sector Takes on Funding: Koofers Receives $2 Million

Koofers, a site that helps students swap old tests, share notes, view grades, and post opinions of teachers, just received an infusion of $500,000 of a $2 million dollar round of financing. They were also recently named one of the top 25 finalists (out of 600) of Facebook's fbFund developers competition, which already received $25,000 from and in the running to receive the grand pot of $225,000. They'll be using the money to expand to more campuses past the 25 that they're already at.

Their name refers to an old term coined "coofers" in the early 1940's, which refers to old tests or homework that are available to students to study with for new tests. The term is actually specific to Virginia Tech where the startup was founded. LaunchBox Digital, an incubator similar to Obsidian Launch and Y Combinator, helped with the initial seed financing that got followed up by New Atlantic Ventures and Altos Ventures in the recent round.

The investment round follows a trend of similar investments that are geared towards educational sectors and startups that aim to help students and those interested in continuing education. Here are some examples:

1. Brightstorm raised $6 million in venture funding last october to provide educational videos.
2. Cramster pulled in $3 million to connect study buddies.
3. uProdigy won the Products & Services category last year in MIT's $100k competition to link Ph.D.'s in India to provide 24/7 ondemand tutoring for students in the US.
4. Babbel raked in an undisclosed amount of VC funding in July to help people learn new languages online.
5. Grockit raked in $8 million for their social e-learning game that awards points for helping others learn. Its sort of like live study groups online.
6. Wiggio, a startup that provides online group colloboration tools for school project groups, also raised a fairly substantial seed round.

The list goes on, put there is clearly a trend that suggests VC's are interested in companies that facilitate or provide new ways to learn. Perhaps its because education will always be in demand. Tuition at universities continues to increase, too. Does the increasing cost of education reflect a lack of innovation and an inefficient system that isn't improving to provide better education to more people? My suspicion, is yes.

I have always thought that our education system is inadequate, even at top tier universities. It is one of the reasons that propelled me to seek my own opportunities to learn directly through actual experience rather than indirectly through textbooks. Some courses of study, like medicine, require the indepth studying of books and materials before actual practice than others. But, for those who are studying anything business related, why study it when you can learn more, and more quickly, by actually doing it? Finance students should be required to invest their own money and practice. They'll have more incentive to improve and learn, and if they aren't willing to invest their own money (and take on risk), then they shouldn't be managing others' money.

I would also say that I learned more starting a painting company, writing business plans, pitching VC's, and learning from failure from the attempt of launching a seed funded mobile startup, than I did in all my classes at Boston College. Its partly because you learn how different disciplines interconnect and that navigating them takes practice.

Although these types of startups don't necessarily seek to improve the education system directly, there is some question to whether their goal to make it easier for students to do better, has any correlation to the suggestion that our education system is inadequate. I'm not sure.

Although I see a lot of needs in this arena, I question whether I would invest in a site like Koofers. Primarily, because it doesn't have any competitive advantage other than racing to market with their product as quickly as possible. But, that competitive advantage, if you can even call it that, breaks down quickly when you can consider their application can be recreated fairly easily. So, it basically comes down to a marketing game of who can acquire the most users the fastest. But, they don't have too much traffic, especially for how long they have been up. I would suspect that if this type of application is really needed and truly helpful, then it would spread fairly quickly.

Post a quick comment to say whether or not you would make a similar investment.