Here's What's Behind Oakland's NewSchools Surge in Funding

Oakland-based NewSchools Venture Fund, a major funder of charter management organizations and education entrepreneurs, recently entered into a partnership that will likely accelerate their charter giving in a big way.

Education technology investor Rethink Education — which since being founded last year, has developed a solid portfolio of cutting-edge ed-tech pioneers — will share a portion of their profits with NewSchools.  

"We see a critical shortage of early-stage and growth capital entering the space, and recognize the need for a variety of funding opportunities that can accommodate a range of interested investors," Rethink Education managing partner Rick Segal said in a statement. "This marks an unprecedented step in the alignment of public and private education investors, and a powerful alliance between the two booming education technology centers of New York and San Francisco."

The education venture firm has established itself as a major player in charter funding in the last 15 years. In fact, anyone involved in charter fundraising has likely heard of the organization, and they have a vast network of mega-wealthy donors. Backers include top Bay Area funders like Hewlett, Packard and Fisher; national funding leaders from Gates and Walton to Broad, as well as a long list of wealthy individual donors.

NewSchools has also developed a portfolio of high-profile charter networks and ed-tech innovators. CMOs KIPP and Rocketship Education have received financial support from the organization, as well as ed-tech leaders like Grockit and Khan Academy. In the last few years, NewSchools has also began to invest in for-profit educational entrepreneurs.  

The idea behind NewSchools is much like a traditional venture capital firm, but instead the organization "defines success as social impact rather than financial return." It’s an interesting concept, and the fund often provides crucial support for early-stage and growing education organizations.

For charter fundraisers — especially those that serve low-income students — the organization should definitely be considered as a funding source. Since being founded, they’ve invested more than $260 million, and the new partnership could potentially accelerate their education giving.

As a venture firm, NewSchools is always looking for investment ideas — especially those that match their mission, benefit low-income and underserved students, and provided innovative and cutting-edge solutions. That’s great news for charter school fundraisers, as NewSchools will likely continue to be a leading source of seed funding and financial support for ed entrepreneurs.