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Hoping to blend education and technology, DreamBox Learning has released its first product: a math game for kindergartners through second graders.

The Bellevue, Wash.-based company is entering a tough market at a time when most families have cut spending. But chief executive Lou Gray says that parents are still willing to make sacrifices for the sake of educating their kids.

DreamBox’s web-based software will compete with Knowledge Adventure’s JumpStart and Math Blaster math games. Both put more emphasis on fun, while Gray says DreamBox Learning K-2 Math teaches in a different way with fun themes like pixies, pirates, dinosaurs and pets. Kids can pick any of 36 different virtual characters, or avatars, to represent themselves in the game.

A beta test was conducted with 1,400 kids in 46 states, and both parents and teachers reported that the kids’ math scores improved with steady use of the program. Gray says the company’s GuideRight software adapts to kids’ learning styles and customizes lessons as needed (just like a human teacher). The product includes more than 350 math lessons.

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The company sells subscriptions to the game starting at $12.95 a month, with discounts for six-month and one-year subscriptions.

The company raised $7.1 million in angel funding from tech veterans. Board members include former Microsoft executive Brad Chase, ex-Expedia executive Byron Bishop, and Harel Kodesh, chief executive of Decho, a cloud services firm. The company was founded in February 2006 by Gray and Ben Slivka, chairman and former head of Microsoft’s Internet Explorer team.

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