Lightspeed Venture Partners leads round in Orbis, sees opportunity in online medical education.
VCs have, for the most part, steered clear of education startups, save for a few areas where consumers are willing to open their wallets — things like standardized test prep and language learning. However, Lightspeed Venture Partners thinks it’s found a goldmine in nurse training. Today, the firm announced an $8 million round for IL-based Orbis Education, which helps universities web-enable their nursing programs, reduce their per-student costs and meet the country’s growing need for medical professionals.
As Congress hashes out a plan to expand medical coverage, the country’s demand for nurses is skyrocketing. The U.S. Bureau of Labor Statistics projects that by the year 2016, nearly 600,000 new nursing positions need to be created. That means schools must graduate 90% more nurses per year. However, universities are poorly incentivized to increase their nursing graduation rates, since such programs are 2 to 3 times as costly as other subjects, but universities can’t charge that kind of multiple for tuition. Restrictions on the student-to-instructor ratio can be as stringent as 8 to 1 for clinical programs. That, in part, is why 100,000-150,000 qualified applicants are turned away from nursing schools every year, despite the shortage, according to Orbis CEO Dan Briggs.
To help schools reduce costs and accept more applicants, Orbis replaces the brick-and-mortar classroom with the laptop. Theory courses are taught by university faculty via interactive online classes that include threaded discussions, real-time webcasts, projects, assignments and proctored exams. Students can complete the online courses according their own schedules, and hands-on clinical preparation is taught by appointed university faculty assigned to work directly with students.
So far, Orbis has partnered with San Diego State University, the University of Oklahoma, Marian University, Sharp HealthCare, St. Vincent Health, and Glendale Adventist Medical Center. The company plans to use the investment to expand into states with the most acute nursing shortages. California, where Orbis already operates, is in the worst shape; other targets include Texas, Florida, and Arizona.
Lightspeed Principal Andrew Chung, who led the investment, said that most other education verticals are already saturated — disciplines where classroom instruction constitutes the bulk of the educational experience (history, psychology, math) are covered by the University of Pheonix and similar online schools. However, programs that require large amounts of hands-on time “in-the-field” need the technology it takes to integrate apprentice-style education with theory courses. “This might be one of the last frontiers,” Chung said, but he did add that adjacent verticals like medtech and x-ray training are still ripe for investment.
Orbis is headquartered in Indianapolis, Ind.
Steven Loeb
