24-year-old SDSU grad raises $5 million for college startup CourseKey
Local tech startup CourseKey, first launched by a teenager at San Diego State University, has raised $5 million from venture capitalists to grow its software business.
Founder Luke Sophinos, now 24 years old, said the new cash brings CourseKey’s total investments to $9 million since the company’s inception in 2015. Now, the company is equipped to build out its software into a more useful suite of tools for colleges, universities and other learning institutions.
When first launched, CourseKey made a simple software tool that allowed professors to take attendance without a manual roll call. Students would log in online and enter a code displayed at the front of the classroom. CourseKey’s software then ensured the student was near the classroom using GPS and Wi-Fi recognition.
That simple idea rocketed Sophinos into a bit of an entrepreneurial star in San Diego. While still a fledgling CEO, Sophinos got the support of Qualcomm’s former CEO Paul Jacobs and former president Steve Altman, who were CourseKey’s first investors. Sophinos dropped out of school and was later chosen for a coveted fellowship program for college drop-outs created by Peter Thiel, the outspoken and sometimes controversial Silicon Valley venture capitalist. Although Sophinos has since returned to San Diego State University to graduate, he said the fellowship gave him two useful years with access to Thiel’s network of scientists, entrepreneurs and investors.
San Francisco-based Builders VC led CourseKey’s new Series A round, with participation from Entangled Ventures, Bisk Ventures, and Social Startups Limited Partners, along with contributions from Altman and Jacobs, among others.
No longer just an attendance tool, CourseKey builds out its suite
Today, CourseKey’s software is more sophisticated than it once was. After students download the CourseKey app (as required by professors who use the technology), the software can pick up ultra-high frequency tones emitted by the professor’s computer to verify attendance. This method ensures students are within the four walls of a classroom, and not just nearby.
The startup’s app can also be used for reading textbooks online, polling students mid-lesson, or conducting quizzes and tests.
All of those tools are handy for teachers and students, but CourseKey recently decided to take on a new set of customers: the academic institutions themselves. Whether it’s a small private college or a larger university, these organizations are interested in customer retention (AKA student retention).
“There’s not really a system in place for quality retention,” Sophinos said. “Roughly half of kids graduate within six years, which is crazy.
Keeping a student enrolled all the way through to graduation is good for the student (if a diploma is the goal), but it’s also good for the institution’s bottom line.
And it turns out that CourseKey’s software can be used as a goldmine for student behavior data. Is John Doe not showing up for class? Is he not engaging in classroom quizzes? Then he might be at risk for dropping out.
“If we can offer the institution real-time data, then they can see who is dropping off and intervene before it’s too late,” Sophinos said.
Next steps for CourseKey
CourseKey has developed a data analytics platform that gives institutions a real-time look at their retention risks and offers up reports and insights on how to intervene.
In this realm, CourseKey has some big competitors, including Instructure, a $1.5 billion public company that makes edtech software Canvas. Instructure now has a local office after acquiring San Diego edtech startup Porfolium in March for $43 million.
The new tools are helping to diversify CourseKey’s income stream, offering some stability and predictability to the startup’s growth. Instead of waiting for individual classrooms or professors to adopt the tool, whole universities are signing multi-year contracts, Sophinos said. Now, the startup can charge a recurring fee to the institution, selling its technology as a software-as-a-service.
Today, CourseKey is used at more than 80 locations and has roughly 100,000 paying users.
The company currently employs 22 at their headquarters in San Diego. With this new round of funding, the startup has hired five additional employees and plans to add about eight more in the next 18 months in sales, customer service and engineering.