Over the past two years of the pandemic, many industries have experienced economic turmoil. However, the EdTech (Educational Technology) sector has benefited from accelerated growth and investment during this period of economic uncertainty.
Lockdown measures resulted in the mass closures of schools and universities, pushing these institutions to adapt to remote teaching; education has been digitalised more so than ever; and EdTech companies have therefore been able to capitalise on this opportunity.
The EdTech sector in the UK grew by 72% in 2020, surpassing the global average by nearly four times. London has accounted for approximately $750m of investment in the sector and was ranked third by deal count after San Francisco and New York.
Globally, EdTech investment reached $36.4bn in 2020, an exponential increase from $18.7bn in 2019 and $16.3bn in 2018. Investment in the EdTech sector has continued strongly into 2021. The EdTech market size value in 2021 is estimated to be $106bn with commentators forecasting revenue in 2028 of $377.9bn. The sector is expected to generate a compound annual growth rate of 19.9% from 2021 to 2028.
EdTech Growth in North America and Asia-Pacific
In October 2021, Seesaw, an American EdTech company that provides a platform for student engagement, received a total funding amount of $13m, with the most recent investment from Providence Equity Partners, a private equity firm that focuses on media, communications, education and technology investments. North America accounts for the largest share in the EdTech market, heavily supported by the vast amount of private equity and venture capitalist investments in the US EdTech sector. This factor will most likely keep North America as the dominant region in the global EdTech market.
Nonetheless, the Asia-Pacific region has been predicted to experience the fastest compound annual growth rate of 22.6% from 2021 to 2028. This anticipated growth is linked to the increase in tech devices such as smartphones and laptops and an expansion of internet usage in some emerging countries within this region. For example, India is a market-leading country in the Asia-Pacific EdTech sector. In September 2021, Eupheus Learning, an Indian EdTech company, raised $10m from the private equity firm Lightrock India. The company has stated that they intend to use the funds to expand their product portfolio and enter new markets. This highlights the need for companies to grow their client base and increase their competitiveness in order to succeed in the EdTech market.
As we continue through the pandemic, adapting to a new norm, it is clear that EdTech is here to stay. Although the recent exponential growth of the market has stemmed from necessity, educational institutions have seen the benefits of adopting technology in education. A hybrid model of learning that combines in-person teaching with EdTech products, whether remotely or within the classroom, is likely to be the lasting outcome of EdTech's use in the pandemic. This model creates more flexibility for both students and institutions. Therefore, there is likely to be an increase in demand for even more sophisticated EdTech products that provide a seamless and engaging teaching platform for both educational institutions and students. Investors will inevitably take this into account when looking for their next project.