The next big growth market: education

Parents are nervous, so it might be time invest in education stocks

Half Moon Bay, Calif.--A novel trend emerged at the Think Tomorrow Today conference here this week: educational investing.

Not as in "the government must invest more in education." Instead, a number of companies that specialize in managing schools or creating curriculum have begun to crop up on the in radar screen. And some are growing fast.

Mosaica Education, for instance, is expected to hit revenues of $120 million this year, according to CEO Michael Connelly, up from $65 million in 2003. Mosaica runs charter schools in many inner cities in the U.S. as well as in Abu Dhabi. The schools Mosaica runs are public (the revenue comes from government grants) but the company tries to import concepts from private schools.

In its schools, parents have to volunteer for at least an hour once a month, he said. Curriculum goals are set for students at the beginning of the year and students, teachers, the principal and parents must sign off on them. Teacher bonuses are tied to performance.

"The most important thing we do is parent involvement," he said.

Overall, kids see a test score increase of around 15.6 percent after a year in the schools, according to Connelly. (It's a complex formula and we will do more stories on this subject, so if you have questions, hold tight for now.)

p> Other educational companies appearing at the conference included Brightside Academy (child care centers), Experiencia (immersive learning programs), Flashpoint (digital media arts colleges), The Savvy Source for Parents (social network for families on things like preschool and summer camp) and SchoolNet (school performance management systems).

That's six education-related companies making pitches to investors at a conference usually dominated by semiconductor designers, cell phone companies and Internet companies. But it makes sense: opportunities in investing often come up through demographic changes, according to Michael Moe, founder of Think Equity partners and the sponsor of the conference.

Education, of course, has been a huge issue in the past several years. Parents are far more obsessed about getting their kids on the right educational track earlier than in the past. Countries like Singapore and Qatar have inked deals with name universities to help bring U.S. style colleges to their countries. Every politician talks about the need for a more educated workforce.

Interestingly, Moe has pointed out that the University of Phoenix has been one of the better performing stocks in the past 15 years.

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About the author

    Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.

     

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