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Knewton completes USD12.5m financing led by FirstMark Capital

Knewton, an educational technology company, has completed a USD12.5m round of funding led by FirstMark Capital, a New York City-based venture capital firm.

Returning investors include Accel Partners, Bessemer Venture Partners, First Round Capital, and angel investor Reid Hoffman.

Knewton’s new financing will accelerate expansion to meet the demand for its adaptive learning engine, which uses proprietary algorithms to identify and address each student’s needs.

"As the demand for online learning continues to explode, we believe Knewton will fundamentally transform the test prep industry and then the broader education market with its industry-first adaptive learning engine," says Amish Jani, managing director at FirstMark Capital and newly appointed member of Knewton’s board of directors. "Knewton perfectly aligns with FirstMark’s investment strategy: to invest in visionary companies with game-changing technologies and exceptional management teams; and to aggressively support the growth of New York City’s investment and entrepreneurial community."

Knewton’s platform tracks virtually every action by every student and prioritises concepts for study each day based on which concepts a student is weakest in. It then delivers these concepts in whatever learning modality is best for that individual student, such as bite size, media format, time of day, and the number and difficulty of accompanying practice questions.

Knewton has brought the platform to market with a suite of test prep products, and is now working on opening the platform for anyone to use. This technology can be applied to a broad range of educational markets.

"It’s been a watershed year for Knewton. Our revenues have been doubling every quarter, our customer satisfaction scores are as high as Apple’s, and our adaptive learning technology is proving to be even more powerful than we anticipated at this stage," says Knewton founder and chief executive Jose Ferreira. "Knewton students are achieving tremendous score improvements, and we’re excited about our next go-to-market strategy: opening our platform and letting anyone power educational content with our adaptive learning technology."

In March 2010, Knewton unveiled its SAT prep course powered by the company’s proprietary adaptive learning engine.

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