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August 11, 2017 in Education, United States

Why Phoenix is the Next Edtech Hub

Why Village Capital chose to host its most recent education workshop in Phoenix, a city poised to be a major edtech hub.

Originally printed in the Arizona Republic

Many entrepreneurs today feel pressured to begin their businesses in Silicon Valley and conform to what they believe a tech startup should look like. Venture capitalists and investors have a blind spot for companies not located in California, New York or Massachusetts, with 78% of all startup investments in the US going to companies within those three states.

However, more and more evidence is suggesting that successful businesses (and the investors who finance them) believe the future of startups lies outside of Silicon Valley.

While Phoenix is still under the radar as a tech hub, those who live there and are involved in the community know that edtech startups are an integral part of the city’s growth, with more than 50 edtech startups headquartered in the area, including Apollo Education Group, Parchment, and CampusLogic. These companies are introducing new and innovative technologies that help improve educational outcomes in K-12, as well as help adults find new and fulfilling careers. In addition, Edtech AZ, a new professional organization, aims to help connect Phoenix’s growing edtech community.

Phoenix also has a robust higher ed community that makes it an excellent test bed for startups to launch pilots with real potential customers. Many universities are open to working with startups, including Grand Canyon University, University of Phoenix, and a large number of community colleges in the area, such as the Maricopa Community College system. Last year, Arizona State University launched its ASU-Draper-GSV Accelerator to source, fund, pilot, and credential products created by higher ed startups.

Entrepreneurs create the jobs of the future. According to the Kauffman Foundation, nearly 100 percent of the net new jobs created in the US over the past 30 years are from startups. And entrepreneurs have been attracted to Phoenix in recent years, thanks to a low cost of living, high quality of life, and abundant talent from major universities in the area, such as Arizona State University with its 70,000 students. Two startups, Schola Solutions and Skookii, which are part of the prestigious LearnLaunch accelerator program in Boston, both chose to be headquartered in Phoenix.

Edtech startups are important in today’s marketplace. Currently, there is a skills gap that has left millions of high paying jobs vacant because there isn’t enough expertise throughout the country to fill them. Many Americans have faced the uncertainties of a shifting job market in which they need to learn new skills, change careers, and prepare for a future in which their current industries may no longer exist.

Phoenix is in a unique position to solve this major problem by creating solutions and platforms aimed at retraining the national workforce and providing students that traditionally get overlooked with a clear pathway from college to a career or alternative career pathways. Improving education technology not only benefits students, but also helps create jobs in a rapidly advancing technology sector.

Phoenix is an example for other cities in America to emulate — showing that regions can use regional advantages to attract and support major industries. The city has positioned itself well for the future as its cluster of edtech companies tries to change the world and creates a ton of local jobs in the process. As a venture capitalist who works with startups all over the country, I’m impressed with how Phoenix has attracted some of the best talent in edtech, and I look forward to seeing how the community grows in the coming years.

Marissa Lowman (@marissalowman) is head of Village Capital’s education practice. She previously worked at Learn Capital and co-founded LearnLaunch, an edtech community, accelerator, and co-working space in Boston. Learn more about Village Capital’s Education: US 2017 Program with AT&T and read more articles on the Village Capital Medium page.

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