Capital Markets are progressively playing a critical role in driving innovation to support the social and economic objectives of education. As governments struggle to fund education at historic levels and as more learning occurs outside formal systems, private capital is playing an increasing role in funding access and outcomes.
As part of our ‘Decade of Education’ analysis, we have expanded our capital markets coverage to 268 listed education stocks in 33 countries, representing over $220 billion of market cap, $85 billion of revenue and over half a million professionals and teachers.
We zoomed out two-decades to benchmark the last and share some data-driven evidence on why we expect 100 listed education companies with over $1 billion market cap before 2030, if not 2025, subject of course to the broader market IPO momentum and trends.
In January 2000, only 40 of today’s 268 Education Stocks where listed. Where-as today, we have 40 education companies with over $1 billion market cap each. In 2000, about 2 education companies would IPO each year and the last few years have seen almost 20 per year. Almost every year we see an education company ‘go private’, the majority through private equity buyouts, with a few strategic acquisitions from global players.
Listed Education Companies were almost exclusively Higher Education focused back in 2000, still the majority in 2010 and by 2020 just under half of the total market cap of the listed sector. K12 emerged in the last decade, principally driven by China (see second chart below) alongside Workforce and Pre K which both make up a meaningful segment of the total now.
US Doubling, China Explosion, UK Rebound
In January 2000, the UK was the dominant country to headquarter the world’s largest listed education companies. Built on Oxbridge roots and Europe’s publishing powerhouses that position was maintained for the most part through the decade. That was until a late surge by the US leveling off at $25 billion of total market cap for the US in 2010 (up from $11 billion in 2000) while the UK declined to $16 billion from $22 billion.
Over the last decade, between 2010 and 2020, the US continued strong growth and the UK somewhat recovered only to be dwarfed by China’s rise exploding from $4 billion of market cap in 2010 to not quite $100 billion in 2020.
The last few years have seen 15-20 IPOs around the world each year in education with around one ‘Take-Private’ on average each year as well. The cohort is increasingly made up of technology-driven models that have found a role supporting traditional educations institutions and more recently large consumer/learner facing platforms, especially in emerging markets.