Secretive online education startup DreamBox Learning is taking the wraps off this week, with the Bellevue company unveiling details around a new product that is designed to help kids between the ages of 5 and 8 learn math skills.

Co-founded by Lou Gray, Benjamin Slivka and a third founder who is no longer with the company, DreamBox raised $7.1 million in angel financing last fall. At the time, the company didn't want to say much about the product direction or overall focus.

The new math product is still months away from launch, with DreamBox planning to unveil it this fall. The company will charge a subscription for the online activities, which will be sold to parents who want to help their kids get ahead in math. Lesson plans can last up to one year depending upon the speed at which kids master the skills.

"We have found that children who enter school with a crisp understanding of math actually do better later in academics," said Gray, the former president of UIevolution. "It is one of the single greatest predictors."

Source: DreamBox

One of the key differentiators for DreamBox is the ability to create custom lesson plans based on the student's learning style. The math product, for example, has more than one million different paths that a student can choose.

"When a kid comes to use it, they think it is a game, but their parents and the teachers ... know that it is a really in-depth math learning product," said Sarah Daniels, vice president of marketing.

At this point, DreamBox has partnered with three local schools that are testing the patent-pending activities.

DreamBox employs 21 people, with the company just starting the process of investigating a second round of capital.

There's been a lot of activity in the online education market in recent months, including GlobalScholar.com and LiveMocha recently raising funds. Others in the space include EnVision Math and Knowledge Adventure's JumpStart series.

Kids also are spending time in virtual worlds such as Club Penguin, which have more of an entertainment than learning focus.

DreamBox has some of those elements, with kids able to choose their own characters or a theme that resonates with them, say dinosaurs. As the company rolls out products for older kids, it plans to incorporate more of the community functions found in some of the popular virtual worlds.

But the success of Club Penguin is resonating with the team at DreamBox, who believe that it shows younger kids and parents are embracing the Internet. But Daniels believes if parents are given a choice they will pick activities that are rooted in deep educational lessons.

"When we talk with parents, they say: 'huh, if my kid thinks that your product is half as entertaining as Club Penguin and I know that they are actually learning it and teachers are giving it a thumbs up, oh my goodness, I know where I am going to ask my kids to spend their screen time other than Club Penguin,'" she says.