Neverware raises $3 million to save school computers

By Erin Griffith , written on December 30, 2013

From The News Desk

New York edtech company Neverware has raised $4.156 million $3 million in new equity funding, which a prior $1.7 million in funding into its Series A round, according to an SEC filing. [Note: CEO Jonathan Hefter has clarified that this round was for $3 million, not the $41.56 million I previously wrote, as the filing includes past funds raised. Neverware's total funding across rounds is $4.7 million.]

Neverware provides technology to schools that helps them salvage outdated or dying computers. The company launched in January of this year and has implemented its solutions in 50 New York City schools, plans to expand nationally and into more areas within school technology with the new funds raised.

Rethink Education led the round, with partner Michael Walden joining the board. Previous investors include Thrive Capital, Rapture Ventures, Nihal Mehta, General Catalyst Partners, The Collaborative Fund, Khosla Ventures and Mark Suster.

Education software and services is a $7.8 billion market. Of course, the lion's share of that is not spent on maintenance. Neverware says it saves schools 40 percent to 50 percent on their hardware maintenance costs, taking a bite out of the money going to Citrix and VMWare with solutions tailored exactly to a school's needs. The company has also reclaimed old computers from government departments and fixed them up to be used in schools.

I've written before about the issues around schools' budgets for technology -- principals don't have a lot of control over what they can buy, and they often have to decide between hiring another teacher and investing in technology.

What's more, Neverware's emphasis on cost-saving and recycling versus "shiny and new" is exactly the kind of startup taxpayers crave in the midst of shady school deals with high-end manufacturers like Apple. LA Los Angeles Unified School District (LAUSD) superintendent John Deasy's plan to spend $30 million outfitting each public school student with an iPad has experienced a public backlash, especially once the public learned Deasy owns Apple stock and has appeared in Apple promotional videos touting the contract, prior to a "bidding" process for the contract.

Selling technology into schools is not easy (unless you're Apple, apparently), as many startups have learned the hard way. Even in-demand companies with innovative workarounds to the lengthy, difficult procurement process have given up. Chalkable, which had done just that by partnering with older, legacy edtech providers, recently sold itself to a partner (STI) to focus on its product instead of going door to door with the schools.

Neverware will have that same challenge no matter how in-demand its offering is. The difference now is that it's got $3 million to figure out how to solve it.

Neverware's experiences with selling into schools is different than if it were trying to educate principals on a new product category, Hefter says. "We're very directly addressing a problem they have right now. It's a very simple pairing of problems to a solution."

Illustration by Hallie Bateman