Every January, we look back on the prior year to reflect on Venture Capital investment in education technology around the world. This January marks the close of an extraordinary decade for education technology with just short of $50B in funding backing a vision to transform the way the world learns and support the United Nations Sustainable Development Goal four (SDG4).
Through 2020, the shock of the global COVID-19 pandemic has resulted in disruption to learning on an incredible and global scale, with the rapid acceleration of technology uptake supporting education continuity at all levels and highlighting the massive inequalities in technology access and community connectivity. Venture Capital investment in EdTech has witnessed a corresponding surge, with the historically large markets of China and the US continuing to grow, along with the spectacular rise of India as an EdTech powerhouse.
While Asia-based K12 B2C investments represent the largest slice of dollars invested in EdTech through 2020, almost half the volume of VC transactions in EdTech (number of deals) through the year were focused on Workforce (Vocational, Corporate Training and Professional UpSkilling), illustrating the underlying dynamic at play as the world moves through significant workplace and demographic change. At a sub-sector level, digital infrastructure to support education institutions’ delivery of learning, such as management systems, learning environments and digital content, make up around a quarter of the 2020 transactions.
China accounted for almost two-thirds of VC funding in 2020, with investment in the US and India each at around $2.5B. $8B, or over half of all EdTech VC in 2020, was raised by EdTech Unicorns. Fundraising from Unicorns in China accounted for half of the total global VC investment in EdTech in 2020. The same dynamic can be seen in India on a smaller scale, whereas the US maintains a broader and perhaps more diverse foundation of smaller fundraising rounds.
Over the past 10 years, Asia’s share of EdTech venture capital investment has been steadily increasing to now, where it accounts for almost 80% of all Global EdTech investment. Asian nations, which account for almost 60% of the world’s population, place a very high value on education, with a willingness and increasing ability to contribute a large proportion of household income to educating their children. As internet connectivity continues to improve across Asia, we are likely to see increased uptake of technology for education and corresponding EdTech investment funding.
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HolonIQ’s annual analysis of the global education market and expectations for 2021 and beyond.