Building Communities Free Enterprise Staff  | August 18, 2016

How Edtech Startups Are Enriching Salt Lake City’s Economy

Every startup hub has a unique reputation. New York City is known for its financial technology companies, Silicon Valley is king of apps and software, and Boston is driving innovation in the health care space.

But what about Salt Lake City? No, this city isn’t pushing the limits of skiing technology as you might expect – rather, it’s emerged as one of America’s premier destinations for education technology companies.

Salt Lake City’s edtech standouts include Pluralsight, an on-demand education training website that raised $135 million in 2014, which was the largest venture-funding investment for a Utah company at the time. Meanwhile, local technology company Instructure, creator of an online course management system called Canvas, raised $40 million last year and boasts clients around the world.

Nearby, software company MasteryConnect raised $5 million from Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, in 2015. The startup’s platform helps teachers monitor student performance, assess content and share relevant information with school administrators and parents.

A 2016 report co-authored by the U.S. Chamber of Commerce Foundation and Washington-based startup campus 1776 cited the city’s flourishing edtech sector as one of its greatest strengths. Growth in the industry saw tremendous momentum and ranked eighth out of the 25 cities surveyed. There’s good reason for that snowball effect, according to Rusty Greiff, managing director and general partner at 1776.

“Companies that bring in talent to support their growing operations sometimes end up pushing out executives who see an opportunity to start their own company,” Greiff said in an interview. “When you have so much talent in one place, sometimes that talent becomes restless and wants to start something of their own.”

He would know. Greiff has worked at education and e-learning companies—such as Sylvan Learning and Learnist—across the country for more than 15 years. He believes the number of edtech companies already operating in the area bode well for Salt Lake City’s continued development as an pedagogy-oriented startup hub.

“When there are companies that find their wings and become successful like a Pluralsight or Instructure, they create a new type of energy and opportunity for other startups,” he explained. “I don’t think it’s a surprise that these companies have a direct impact on the city’s economy. When you have highly educated, highly talented employees who relocate to Salt Lake City, it contributes to local innovation that pushes other startups to bigger heights.”

Meanwhile, the city’s tech community is making a conscious effort to capitalize on the huge demand for more tech-friendly tools in education. Last year, local accelerator BoomStartup launched an education-specific startup program to help the city’s increasing number of edtech entrepreneurs grow their businesses.

Entrepreneurs in the competitive three-month program received office space, early-stage seed investment and a host of services, including legal and financial help. Despite receiving hundreds of applications for its programs, the first edtech class last year accepted only eight startups.

“We saw a real need for education tech tools and that more startups were entering the space,” BoomStartup Program Manager Scott Campbell said. “We wanted to offer something unique.”

Sunny Washington, CEO of local startup Ardusat, is a BoomStartup graduate and one of the many edtech entrepreneurs based in Salt Lake City. Her company sells an online education package that includes space kits, specialized curriculum and hardware. The package allows students to create their own experiments in outer space using commercial satellites and then analyze and share their data.

Last year, the company announced it had secured a $1 million investment from Space Florida, a state aerospace economic development agency, and other investors to expand its platform.

“Part of the great thing about the city is that it has universities that focus on entrepreneurship and are strong in education, which makes it a perfect match,” she said. “There are so many talented people and experienced entrepreneurs who have worked in the space already here, so it’s easy to find the right type of people to start your own business from the ground up.”