EdTech is having an incredible year and Q3 is shaping up to be the star performer. We are tracking at $4b of EdTech VC investment YTD with July alone contributing $1b of the total.
At the end of each day, we hold a stand-up to walk through the major deals, events and developments in education around the world. Something happened in July and we are still running it to ground, but in brief, we saw a major pickup in edtech VC deals over US$5m, now running at one per day on average, somewhere in the world but most likely the US, China, India or the UK.
Last week we projected 2018 will be a record setting US$6 billion EdTech VC investment year, almost doubling 2017. But given just 10 companies, the Global EdTech Unicorns, have attracted nearly $3.5 billion of investment over the last 5 years, we thought it was important to take a look at activity and underlying deal volume to get work out if the mega-deals were masking an underlying slow-down or if indeed, the pace was picking up.
But how did we end up here?
The chart to the left shows the monthly count of edtech venture capital deals of US$5 million or more, worldwide, since the beginning of 2013. The dots represent the number of deals and the line represents a six-month moving average of round counts to show the general trend.
2015 was the peak of VC deal value and volume in the US and the year China overtook the US on both fronts. EdTech was having its time in the sun, ‘The new FinTech‘ they said. However 2016 and 2017 normalized what now looks like an outlier on a steady climb.
2018 is the question and Q3 doesn’t look ‘on trend’ at all, surging ahead with 40 deals over $5 million as of mid August with half of the quarter yet to come. We are projecting 60 deals over $5 million which would set a new quarterly record over Q4 2015.
July 2018 was a US$1 billion EdTech venture investment month globally. This brings 2018 to US$4 billion year to date – on track to deliver US$6 billion for the full year based on this momentum but assuming we won’t see a repeat of July in the next five months.
Globally, July’s investments are nearly as much as the average annual US investment over the past five years in a single month. July saw a number of late stage venture rounds in China, the US and India with a strong block of Series B rounds including the UK. China invested US$600 million, the US close to US$300 million and India over US$120 million, building on strong momentum.
All of this data is fresh from HolonIQ’s global intelligence platform, built from scratch over the past 12 weeks. We acquire 80% of our data through machine learning algorithms that parse unstructured and semi-structured open source data, programmatically extracting key data points. 20% of our data comes as direct submissions from startups, investors and network partners around the world. Intuitively we know there are more deals out there we have not identified or scrubbed yet, but with each day we see another $5m deal close, our algorithms get smarter and our QA team closes in on a fresh, reliable, global data set we look forward to sharing soon.
International Education in 2030
Q3 marks more than $5B of Education VC invested through 2019. We expect to see $6.5B for the full year from a lower number of larger transactions.
Part 2. Launching our 4,900+ OPM Program dataset, sizing up the new $3.5B+ OPX category and sharing our Open Source OPX Capability Framework.