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A Brisbane-headquartered startup whose AI tools help teachers with assessments has been accepted into the next cohort of Silicon Valley accelerator Y Combinator, including US$500,000 ($763,000) in funding to "subsidise growth" as Edexia scales up following a recent launch in August.
Co-founder Daniel Gibbon tells Business News Australia the startup was given larger $2 million offers from two leading Australian venture capital firms, but he and fellow co-founder Nathan Wang chose the Y Combinator option as they believed it would be the "best launching pad" for the development of both the company and themselves as founders.
And that's not to mention the opportunities for US market expansion for a business whose clientele is currently limited to 12 Queensland schools - including Brisbane Grammar, St Margaret's and Gregory Terrace - and a few more sign-ups expected for the first term of 2025.
The founders are both friends and insatiable autodidacts, having met at university through a mutual friend and connecting over a shared passion for self-learning and startups. They first founded online tutoring marketplace 99 Plus Tutoring, and after achieving moderate success they pivoted their focus to find "the best way to have a positive impact on the education system".
Gibbon is aware of the impact Y Combinator had as a pivotal moment for another Queensland edtech Go1, whose co-founder Vu Tran has described the experience as 'lifting the eyeline' of founders in terms of their ambitions, helping them go on to build a unicorn at a valuation of more than $1 billion.
The news of Edexia's acceptance into the program also comes after Melbourne-based AI receptionist startup Phonely joined the Y Combinator club earlier this year, while Victorian edtech Sindy Labs was California-bound after being accepted into the Berkeley SkyDeck accelerator.
There are numerous Australian AI startups seeking this kind of validation, financial backing or, most importantly, paying clients. For Gibbon and Wang, working towards differentiation in a crowded AI marketplace came down to hundreds of conversations with teachers and researchers, identifying the biggest problems that needed to be solved, and iterating possible solutions.
Gibbon describes the time spent between founding the company in mid-2023 and launching the Edexia product in August 2024 as a "phase of trying to become domain experts in AI in education".
"We realised the best way to have a positive impact on the education system was actually to help teachers help students, rather than helping students directly," Gibbon tells Business News Australia while driving to one of the partner schools to engage with teachers for feedback.
"We thought the best way we could help teachers was in that assessment space. It’s the area that’s somewhat the most problematic, sometimes the most time consuming, but also arguably one of the most important for student development," says the 21-year-old.
The founders built the technology so that it would be trainable and "act exactly like a teacher" with moderation from the human teachers themselves, learning how to provide feedback, irrespective of the curriculum or task.
"Because it's learning like a teacher, it can learn even the most nuanced things and work in the most nuanced settings, and they can actually trust it and interact with it like they would a colleague," Gibbon explains.
"They should always still be moderating its output, because that way they’re still at the forefront connecting with their students.
"They can delegate it after they’ve trained it. They're training it to provide feedback exactly how they like, rather than the classic AI in edtech where it’s frankly not that great from the get-go and that's just it."
It is still early days for the technology, however, and Gibbon points to two areas that need improvement.
"The more multi-modal, the more complicated it is to actually get it to follow the given thought process in that assessment; it can currently do handwriting, graphs and images, but videos and dance performances are obviously quite complex. That applies to anything physical as well, like a student throwing a shotput and grading that," he says.
"The second element is incredibly nuanced decision making, like in a Year 12 creative essay. That's what we’re largely focusing on this term, getting it to work in those cases - even in the most complex maths assignments, the most nuanced English essays, and then slowly expanding into multi-modal capacity."
The entrepreneur believes the technology can be deployed anywhere, as the problems in education are similar worldwide.
"All over, teachers are drowning in work," he says.
"They’re simultaneously struggling with their current workload, but they need to be doing more for their students to actually help them develop even further.
"The approach is very similar, regardless of location. The only difficulties with the US are just going to be the sales funnel. We might have one or two more hurdles we have to cross."
Having worked in another edtech business and observing the marketplace for a few years, Gibbon is emboldened by the rapid traction Edexia has seen so far in Queensland.
"It seems like a real step change in ed tech in a way – the trial costs $5,000 to $15,000 for one term, and we’re seeing schools sign up in two weeks when it usually takes them years to start with edtech," he says.
"We can provide such a game-changing amount of value that it just seems like the times are changing, and it should be relatively easy to expand pretty much anywhere. The big question is making sure that we’re the first ones to really do that expansion.
"The important thing is having a really close feedback loop with schools, where they are constantly relaying points of frustration, points of improvement, points of actual value….we’re constantly iterating."
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