After entering the "Shark Tank" and coming away with a deal in 2014, Chicago tech startup Packback pivoted away from its original concept as an online textbook platform to artificial intelligence software for college courses. That was in 2016.
Now eight years later, its founders feel good about the decision they made as every tech startup today is now looking at AI and how to incorporate it into their platforms.
The company announced a strategic investment from equity firm PSG this week for an undisclosed amount to further accelerate the startup's growth.
"What [Packback] realized was in their pursuit to help provide inexpensive textbooks to students, they actually uncovered a much deeper pain point, which was students weren't receiving the value from their education that they wanted and educators felt they weren't equipped to deliver value to their students," Kelsey Behringer, who became Packback CEO last year, told Chicago Inno. "We've never thought of ourselves as an AI company. The goal was always how can we drive and increase motivation in our student population."
Behringer stressed that having made the pivot years before the boom, Packback is "years ahead" in its AI development journey, whereas some startups are just starting out.
Packback has grown from less than 50,000 students at the time of the company's Series A raise in 2017 to more than 1.8 million unique student users as of last week. Its AI-powered platform offers digital writing assistants to students and provides scaffolded, AI-powered support to make grading easier for educators.
A 2021 study conducted in partnership with 10 higher education institutions indicated that students using Packback received higher grades than the control group.
Packback currently has 120 employees with an office located at 125 S. Clark.
Troy Williams, investor from Achieve Partners, watched the company from afar for a number of years before ultimately investing as it expanded out its platform.
"The company had been in existence for at least six years before we invested in it, and at the time had less than $1 million in revenue," he told Chicago Inno.
Williams invested only after advising the founders to add a feature — an AI-moderation classroom discussion concept — "years before" anyone was thinking about AI in education, and selling that as a standalone product. Achieve Partners invested in Packback seed round before leading the startup's Series B round.
"We grew that from less than $1 million in revenue to around $20 million in revenue," he said. "They are using AI basically to save professors time from having to read every student's post. You have 300 students in class and they are going to post twice a week over the course of a semester. Professors that may have multiple classes don't have time to read all that."
Williams thinks that AI is going to infiltrate every area of our lives, not just education.
"We're moving to a future where it's more about what you know and not how much time it took you to get there, and AI and other assessment products will help do that," he said.
