Series-A. Global EdTech Trends

10 Oct 2018. The evolution of the Global EdTech Series-A round over the last ten years

HolonIQ Series A Evolution

$10m Top Quartile Deal Size, up $4m in 4 years

Last week we shared the evolution of $5m+ EdTech Deals over the last 20+ quarters, now approaching two US$5m+ edtech deals every day around the world. Which prompted the question by many, why the $5m mark?

EdTech, like most other verticals, is experiencing a tectonic expectation shift across stages — seed deals look like As, As look like Bs and so on. There are material differences across markets as well, China’s EdTech rounds are much larger than the rest of the world for example. So we needed to pick a dollar threshold that represented a significant investment, beyond the reach of edtech angel or seed, so we picked the 2018 Median Series A mark and here is what that evolution looks like over time.

Over the last 20 weeks, our machine learning algorithms and submissions through our Investor Connect program have given us fascinating insight into over 700+ Series A-Rounds from all around the world. 200+ of the rounds are undisclosed in deal size and over half of the rounds are silent on valuation.

We are still building out our data but the sample size is large enough to make a few general observations:

Series A rounds in edtech are acquiring a roughly 25% ownership position. This is in line with broader VC trends.

Median and Top Quartile EdTech Series A rounds are roughly half that of general VC Series A rounds

Series A deal size seems to follow the general volume trends. The run-up from 2013 to 2015 peak, recovery in 2016/17 and a material acceleration through 2018.

Median reasonable stable. Note the median from 2010 to 2017 dips down through the cycle and recovers back to $4m in 2016/2017 before the $5m median in 2018.

Most of the growth is at the top end. Whereas the top quartile deal size has nearly doubled from 2013 to 2018.

Q3 2018 EdTech Deal Flow Snapshot

Global EdTech Deal Volume has skyrocketed in Q3 2018, now approaching two US$5m+ edtech deals every day around the world. An edtech Investor panel in New York this month boasting GSV, New Market Venture Partners, ReThink, University Ventures and hosted by SJF Ventures remarked that it has never been easier for edtech entrepreneurs to raise money, or harder for investors to compete for deals than it is today.

Q3 2018 saw 75 edtech deals at or above US$5m, smashing the Q4 2015 record of 55 deals and Q4 2017 record of 52 deals. In fact, Q4 has been the record quarter for every year bar one of the last six years, suggesting 2018 may well beat every year since the 2015 record by at least 60 deals if it comes in at the same level as Q3, let alone eclipses it.

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