April 27, 2021, Written by Sophia Kunthara – Reporter covering late-stage venture and startups, Crunchbase. Please see the original article here.

On-demand proctoring service Honorlock has raised $25 million in a new round of funding, the company said Tuesday. Owl Ventures led the round with participation from Defy PartnersArsenal Growth and other existing investors. 

Honorlock uses artificial intelligence and human intelligence to give students a smooth remote testing experience, CEO Michael Hemlepp said in an interview with Crunchbase News. While other proctoring services either tend to “overflag” students for supposed cheating or use humans, which can be intimidating, Honorlock uses a feedback loop that’s scenario-driven, so that students aren’t unnecessarily being reported for suspected cheating.

The idea behind Honorlock is to “earn (students’) trust in the beginning and reduce anxiety, and have a more concentrated experience so their performance improves,” Hemlepp said.

Honorlock only goes to the educational institution if it has hard evidence of cheating. That tends to be relatively rare, according to Hemlepp. Otherwise, a trained proctor can de-escalate a situation if Honorlock’s technology can’t see a questionable situation through. 

“This market that we got really excited about, we just hadn’t seen a team that thought a lot about the students and was using AI technology to solve the problem,” Defy Partners Managing Director Neil Sequeria said in an interview.

Higher-education institutions including the University of FloridaGeorgia Tech, and the University of Maryland are among the 300 institutions that use Honorlock for exam proctoring. When a school signs up to use Honorlock, all of its students come with it. Honorlock surpassed the 1 million-student mark last year, and is planning on onboarding another million students this year (for context, the market for higher-education students is about 20 million students, according to Hemlepp).

“Trying to create a testing environment that’s really supportive of all students and that de-escalation was something that was very differentiating,” Amit Patel, managing director of Owl Ventures, said in an interview. “The varieties of universities and higher-ed institutions really appreciated that fact.”

The past year or so has put edtech in particular in the spotlight, as schools have quickly had to adjust to remote learning. And for testing, that means figuring out ways to securely administer exams remotely. 

For Honorlock, that meant revenue grew 1,000 percent year over year as schools turned to the system for exam proctoring. The company added about 70 employees last year, reaching more than 100 employees total, and is planning on hiring another 70 or so employees this year. 

With the new funding, Honorlock plans on investing in its talent, technology, and strategy, according to Hemlepp, along with its go-to-market strategy. The company is also looking to expand its presence in the corporate space — which it’s already entered — to provide remote proctoring services for exams such as real estate licensing exams.

The new round brings Honorlock’s total funding to nearly $40 million. The company last raised money with an $11.5 million Series A led by Defy Partners in March 2020.