A private equity firm is investing $90 million in a cutting-edge anti-cheating startup a month after a college admissions scandal ensnared elite parents
- Private equity firm Great Hill Partners announced on Tuesday it had invested $90 million in Examity, an anti-cheating platform.
- Examity uses artificial intelligence and human proctors to ensure test-takers aren't cheating on college exams, professional assessments, and standardized tests.
- The investment comes just after a wide-ranging college admissions scandal that included several allegations of cheating widely-used standardized tests, including the SAT and the ACT.
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Colleges' anti-cheating measures have been largely low-tech for generations. Proctors, typically teachers' assistants or professors, may roam classrooms looking for evidence of illicit materials, whispers, or wandering eyes.
As more students take courses and exams online, ways to cheat have expanded exponentially, but ways to monitor them have not kept pace. Enter Examity, an online proctoring platform that raised $90 million on Tuesday from private equity firm Great Hill Partners. The company uses biometrics, artificial intelligence, and live monitoring via webcams, among other oversight measures, to ensure testing security.
Testing security has been in the spotlight in the wake of the wide-ranging college admissions scandal, which ensnared 50 people across the country last month, including wealthy parents who arranged for their children's standardized tests to be doctored.
The scandal hit private equity, with former TPG executive William "Bill" McGlashan among the parents indicted. The indictment said that, among other accusations, McGlashan arranged for his son's ACT answers to be corrected. His son then submitted his fraudulent score to Northeastern University in the fall. He has since withdrawn his college applications.
Great Hill Partners
"I think that event underlines the importance of integrity for testing, which is clearly a positive for the business," Busby told Business Insider.
With the new investment, Examity will expand beyond its current North America footprint and boost its sales and marketing resources, among other initiatives, Busby said.
It has plenty of room to expand. The majority of the company's business comes from higher education, a market that Busby said is only 10% penetrated. A third of students now took at least one course online in 2017, and that figure has grown consistently in the last few years, according to the most recently available data from the Education Department's National Center for Education Statistics.
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"The integrity of that brand and of that degree is the most important thing to these universities, so they need to make sure the people graduating from these schools and passing their courses are passing because they have knowledge of the content," Busby said. "They can't do that if they don't have certainty that performance on the exams is consistent with the abilities of the test taker."
Examity also works with companies that give corporate assessments and certifications, such as Amazon and MongoDB, another major growth area.
Busby said Great Hill's investment is its first in education technology, a sector that continues to pick up steam. Last year saw $16.34 billion in edtech investments, according to market research firm Metaari.
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