Key Investors in LA Schools’ $6M AI Chatbot project Stay Silent

During the recent summer period, executives at AllHere, a company contracted by Los Angeles schools to develop a highly anticipated $6 million AI chatbot, reassured one of its investors.

Back then, Boston Impact Initiative leaders were wrapping up the company’s annual impact assessment, believing that AllHere was performing well and offering a tech-driven solution to tackle chronic student absences. The equity-focused investment firm now realizes that their perception was off the mark.

“There were conversations with the company and it was doing really well,” mentioned CEO Betty Francisco in a recent phone call to The 74, contradicting the reality that AllHere was on the brink of collapse, leaving her questioning the accuracy of prior reports.

The company, which had received significant investor funding of around $12 million, faced severe difficulties as it announced the majority of its staff had been furloughed last month, and its innovative AI chatbot for the Los Angeles Unified School District was deactivated, ultimately resulting in the departure of its founder and CEO, Joanna Smith-Griffin.

Francisco disclosed that while her firm played a limited role in AllHere’s fundraising efforts, major institutional investors are now collaborating with the company to chart its next steps.

The unfolding plan and circumstances prompting such actions remain shrouded in mystery. Despite The 74’s attempts to obtain comments from multiple key figures associated with AllHere, including its founder, venture capital investors, and board members, only Francisco was willing to offer insights into the company’s situation.

Previously lauded investors who championed AllHere’s adoption of AI in schools have retreated from public discussions following the company’s recent setbacks. Andrew Parker from Spero Ventures, a key figure who envisioned a bright future for AllHere, declined to comment for this narrative.

AllHere’s journey, marked by financial turmoil, mirrors the initial challenges faced by Smith-Griffin after AllHere’s inception at Harvard University. The company’s evolutionary path eventually led to the creation of an AI-powered chatbot for Los Angeles schools, a venture that raised concerns about the protection of student data due to alleged shortcuts taken by AllHere to meet the district’s aggressive demands.

While publicly heralding the transformation of AllHere into an AI innovator, its investors’ involvement appears to have inadvertently contributed to the company’s downfall on a more significant scale.

‘Disturbed by the allegations’

Several members of AllHere’s board of directors, comprising individuals well-versed in education policy, declined to comment on the unfolding situation. The unraveling of information about AllHere’s challenges primarily came from the L.A. Unified district, which confirmed Smith-Griffin’s departure and the company’s imminent sale.

Investigations spurred by the district’s inspector general’s office into allegations of misusing student data call into question the company’s efficacy and adherence to privacy standards. Superintendent Alberto Carvalho, while expressing concern over the allegations, emphasized the need to address these issues responsibly.

A proposed task force aims to investigate the circumstances surrounding AllHere’s operations within the district and ensure technological applications align with established policies and safeguard student data effectively.

“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 received negative feedback regarding its patent application for a chatbot addressing student absenteeism, leading to a setback in its technological pursuits.