Reuters Riiid Inc, a South Korean AI tutorial startup, on Monday said it raised 175 million from SoftBank Group Corps Vision Fund 2 as it looks to shake up the world of standardized testing, and take its technology to public schools.
Venture capitals funding of education tech surged with the pandemic to 16.1 billion globally in 2020, up from 7 billion in 2019, according to research firm HolonIQ. The bulk of this funding has been for services consumers have to pay for such as Chinese online tutorial service Zuoyebang, which raised over 1.6 billion late last year.
Startups targeting public schools, especially in the United States, have found it harder to elicit venture capital, which has often cited the challenging sales landscape. Critics say the pandemic and technology have further widened the education wealth gap.
Riiids AI tutor started making money in Japan and South Korea with test prep services for the English assessment test TOEIC. It also licenses its technology to test prep companies and businesses looking to create training programs for employees.
Standardized tests like the SAT and ACT have been seen to be perpetuating inequality as wealthy families can afford expensive tutors. Riiid executives believe the testing industry is due for a shakeup, and AI test prep platforms which offer a realtime evaluation of the students progress can eliminate stressful onetime tests that are expensive and can last for hours. The company is trying to offer this technology to…