Google Capital invests $40 million in online education giant Renaissance Learning

Google is betting big time on the online education space.

Google Capital, one of the Mountain View company’s venture arms, announced today it is investing $40 million into Wisconsin-based Renaissance Learning, a K-12 cloud-based assessment and learning analytics company with over 1,000 employees.

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“We didn’t need the capital, but it definitely opens the door,” for many other opportunities, said Renaissance Learning CEO Jack Lynch.

With this infusion, Google now owns a small percentage of the company.

Renaissance Learning is a major player in the online education space. It is majority owned by European equity firm Permira. Lynch said revenues are robust (although he wouldn’t give me a figure) and that over 20 million students currently use the system. Renaissance Learning’s solutions are in use at one third of the nation’s schools. The company has a valuation, he said, of $1 billion.

The company’s cloud-based analytics allow teachers to track student performance and progress across multiple subjects. The harvested data then presents educators with alternative solutions when pupils encounter problems in reading, writing, math, and language courses, for example.

Our tools provide “very precise insight into what students will know in order to [help educators] calculate and determine better sequencing,” Lynch said.

Teachers access the cloud data through desktops and tablets. If a 4th or 5th grader encounters problems with, say, figuring out fractions, the teacher inputs the data into the cloud, and through the Renaissance analytic channels, solutions are immediately proffered.

Lynch said his systems are simple to use for educators.

Analytics also allow teachers to group query students in order to ask, for example, “how many of our kids in the 4th grade are actually below 4th grade proficiency?” Lynch said.

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The tools enable what Lynch called ‘strategic intervention’; in other words, educators can use the tools to make adjustments for the students on the fly, on a case by case basis.

Google Capital reps did not respond to questions by press time. The fund has previously made two investments, with Survey Monkey and Lending Club.

Renaissance Learning is not Google’s first direct educational investment. In 2011, Google Ventures invested $3 million in Subtext, a startup producing e-learning applications for the iPad, which Renaissance later acquired.