The Key Investors Who Once Touted L.A. Schools’ Failed $6M AI Chatbot Go Silent

Earlier this summer, leaders at the ed tech company AllHere, contracted by Los Angeles schools to build a heavily hyped $6 million AI chatbot, offered assurances to one of its investors.

At the time, principals with Boston Impact Initiative were finalizing the firm’s annual impact assessment of AllHere, a 2016 startup that offered a tech-driven solution to chronic student absences. Officials with the equity-focused investment firm were left with an impression that was, it turns out, far from reality.

“There were conversations with the company and it was doing really well,” CEO Betty Francisco told The 74 in a brief telephone conversation earlier this month.

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AllHere was actually on the verge of collapse and now, Francisco is questioning whether her firm may have been played.

“We are trying to also understand what happened,” she said of the news that the company, the recipient of some $12 million in investor capital and much praise for being an AI education innovator, was in serious straits . Last month, a majority of its staff were furloughed, AllHere announced on its website ; the ambitious AI chatbot that it built for the Los Angeles Unified School District was unplugged and its founder and chief executive officer, Joanna Smith-Griffin, was out of a job.

Francisco said her firm was a minor player in AllHere’s venture capital fundraising and that the larger, institutional investors were now working with the company “to figure out the plan.”

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What that plan might be — and what necessitated it in the first place — remains a mystery. In the month since The 74 first reported on the company’s downfall, key figures in AllHere’s rise have gone underground. The 74 sought comments from more than a dozen company officials, including its founder, investors at prominent venture capital firms and members of its board of directors. None, aside from Francisco, would speak publicly about the company.

It’s a major shift for AllHere’s backers, many of whom work at impact investment firms that fund startups through a social justice lens. These figures were once outspoken about AllHere and their shared place in the race to inject AI into schools. Among those who have gone silent is Andrew Parker of the firm Spero Ventures , whose fundraising efforts landed him a seat on AllHere’s board of directors. In a 2021 blog post, he described AllHere’s AI-powered answer to chronic absenteeism, one of the pandemic’s most lasting impacts , as a profound innovation in the way schools communicate with parents. The company, he boasted, was a smart bet.

“Being this primary conduit of communication is a terrific business opportunity, and it’s how AllHere will thrive in the years to come,” wrote Parker, who declined to comment for this story.

AllHere’s latest financial woes aren’t the first time that Smith-Griffin felt the pressure of a company mission gone wrong. Shortly after Boston-based AllHere emerged from a startup incubator at Harvard University, where Smith-Griffin was enrolled, its technological approach to bolster student attendance fell flat.

“The first iteration of AllHere failed spectacularly,” Smith-Griffin, a former Boston charter school teacher and family engagement director, said in a 2017 interview on a Harvard Innovation Labs podcast . “And it was one of the best things that could have happened to us.”

In response to those early startup woes, Smith-Griffin changed course. She ditched her initial idea of using data to create lists for teachers of the students most likely to become chronically absent — a service that educators told her wasn’t much help — and pivoted to an automated text messaging service that sent personally tailored “nudges” to parents in the guise of a friendly chatbot.

The $6 million chatbot that it would eventually build for L.A. schools — an animated sun named “Ed” meant to interact individually with and accelerate the learning of some 540,000 students — was in a different class entirely. AllHere, according to a former employee-turned-whistleblower, put students’ personal information at risk by taking shortcuts to meet the school district’s ambitious demands.

Meanwhile, AllHere’s investors publicly touted that it was the infusion of cash and leadership from altruistically inclined impact firms that transformed the company from one with an under-baked product to an AI innovator in the K-12 space. An examination of these firms’ outsized role suggests that AllHere’s venture-influenced embrace of artificial intelligence may have led it to fail once again — this time on a much grander scale.

‘Disturbed by the allegations’

Reached by phone, four members of the company’s board of directors — including several with extensive and well-known education policy credentials — declined to comment for this story. In fact, much of the information about AllHere’s unraveling has been filtered through an unusual channel: The school district it left in a lurch.

It was an L.A. Unified district spokesperson who first told news outlets that Smith-Griffin was no longer with AllHere and that the company was up for sale. Smith-Griffin, who records show lives in North Carolina, couldn’t be reached for comment.

Investigators with the district’s independent inspector general’s office have launched an inquiry into the former AllHere executive’s claims that the company misused L.A. students’ personal data and Superintendent Alberto Carvalho last week proposed a task force to find out what went wrong. The inquiry, Carvalho said, will dig into the district’s procurement process and claims the chatbot handled students’ personal information in ways that violated district policy and basic data privacy principles.

“I’m disturbed by the allegations,” Carvalho said in an interview with the Los Angeles Times while speaking simultaneously on AllHere’s behalf.

“We’ve had — our team has had — conversations with the company about those allegations,” Carvalho said. “The company has denied those allegations.”

The task force, an LAUSD spokesperson said in a statement, will create a framework for the district to “continue leveraging technology responsibly.” AllHere, which has been paid about $3 million so far, won the five-year contract after a competitive bidding process, the spokesperson said, and was selected “because it was most aligned” with the district’s vision for the chatbot and “was an established educational technology company focused on personalized and interactive AI solutions to improve student attendance.”

‘A truly amazing board’

After the pandemic shuttered in-person learning nationally and student absences surged to unprecedented highs , Rethink Education, an ed tech-focused impact investment firm that provided early capital to AllHere, saw an opening. A case study by Impact Capital Managers says that Rethink provided the company with more than cash flow; it oversaw a “strategic transition,” specifically “a pivot towards an AI chatbot” that observers would later say was outside the scope of AllHere’s capabilities.

Rethink Education partner Ebony Brown offered AllHere critical connections to influential education players and helped it build “a truly amazing board” of directors, according to a 2021 blog post by Matt Greenfield, Rethink’s managing partner. She successfully recruited Jeff Livingston, a former senior vice president at McGraw-Hill Education and a Bill & Melinda Gates Foundation consultant , and Janice Jackson, the former CEO of Chicago Public Schools.

“Ebony got introductions to several former superintendents of large districts, secured a meeting with Janice, and delivered an impassioned and ultimately successful pitch,” Greenfield wrote. The addition of Livingston and Jackson to the AllHere board was strategic, according to the case study, noting that they “have been instrumental in securing deals with major school districts and in developing a customer acquisition playbook to expand the company’s nationwide presence.”

The extent to which board members’ helped AllHere land the LAUSD contract is unclear. Livingston and Jackson both declined to provide comment for this story. Greenfield and Brown didn’t respond to multiple requests for comment.

Brown, who also gained a seat on AllHere’s board, then sought to improve the company’s visibility, helping Smith-Griffin “secure a spot as the featured entrepreneur” on the Forbes 30 Under 30 list for education leaders in 2021. A year later, Smith-Griffin served as a Forbes 30 Under 30 judge alongside Purdue University president and former Indiana governor Mitch Daniels and Deborah Quazzo, a managing partner at the investment company GSV Ventures.

GSV is heavily involved in education technology companies. In April, Smith-Griffin and Carvalho unveiled the district’s buzzed-about chatbot at the high-profile annual conference in San Diego co-hosted by the venture firm and Arizona State University.

“The Forbes profile,” Greenfield’s post notes, “in turn led to inbound interest from venture capitalists, multiple term sheets [documents outlining the terms under which VCs fund startups] and a round” of investments totaling more than $8 million.

On June 12, just two days before AllHere announced that it had furloughed most of its staff, the company got bad news from the U.S. Patent and Trademark Office. Officials rejected AllHere’s patent application for a chatbot that addressed student absenteeism, finding that the tool didn’t present eligible technological advancements.

The office wrote: “No inventive concept exists sufficient to transform the abstract idea of ‘student monitoring’ into a patent-eligible application of that idea.”