Silicon Valley Faces Controversy for its School

By Erika Ota Liedtke,
Technology and Innovation Writer

AltSchool, a company with the vision of implementing personalized learning through technology to help every child reach their potential is now rebooting. Founder and CEO of AltSchool, Max Ventilla, committed Mark Zuckerberg and other high-profile tech investors to invest $175 million to his startup. The company built approximately a nine grade school in California and New York with heavy investment in infrastructure such as ceiling-mounted video cameras, and technology-infused learning tools including custom apps and robots.

Now, five years after its inception, the for-profit venture has not been able to generate enough revenue to cover their over $40 million expenses per year – despite holding a tuition rate of $30,000 per year.

Ventanilla’s justification asserted in AltSchool’s “strategy, path to growth and finances,” and the startup’s shift to focus more in selling technology to other schools, which has already started to experience increased demand. The company estimated to hold over one thousand partners in the near term, with a pricing strategy that charges $150 to $500 annually per student for its technology. AltSchool has approximately $60 million in the bank, but is willing to take on debt if needed. Their strategy’s focus is on growth and potential expected cash flows from the sale of their innovative products.

Venture capitalists continue to invest in education-technology startups, as the education system is one of the few industries that has resisted technological invention. Even though AltSchool has tried to differentiate itself from other startups by building physical backgrounds and enhance them with “personalized” learning technology, it seems that the results are not as expected. AltSchool has renamed all their remaining locations, Lab School – and might experience additional closings

 

A version of this article appeared in the Tuesday, November 7th print edition.

Contact Erika at
erika.otaliedtke@student.shu.edu

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