Giving Compass' Take:

• New Markets Venture Partners finally closed its latest fund for Edtech education tools in late April, but plans to invest in recapitalization rounds for education companies. 

• What are the challenges in an edtech startup ecosystem that lead to funds closing? How can venture philanthropists mitigate them? 

• Read about how educators are the best edtech innovators. 

When New Markets Venture Partners first began fundraising for its second education technology investment fund, Barack Obama was in office, Brexit for up for debate and iPhones still had headphone jacks.

Now, more than two years later, New Markets is finally calling it a wrap. Its latest fund, dubbed “New Markets Education Partners II,” formally and finally closed on April 30, totalling $68 million.

The firm plans to invest up to $5 million into Series A, Series B and recapitalization rounds for education companies serving pre-kindergarten to professional learners, with a focus on digital learning, learning sciences, analytics and workforce development services.

Part of the reason, he said in an interview with EdSurge, was that New Markets took a “counterintuitive approach to raising money” that bucks conventional tech-investing wisdom. “We don’t focus on San Francisco and New York companies, but on cities that are off the beaten track,” he says. Making that pitch to funders, Palmer adds, “required a certain amount of persuading to show that the best education companies come elsewhere.” (Still, three of the New Markets’ seven investments from this fund are based in one of those startup hotspots.)

With measured expectations come measured results. New Markets’ may not have reaped the windfall returns that many tech investors swoon over, but it has seen eight exits over the past six years.

Read the full article about New Markets closes edtech funds by Tony Wan at EdSurge