HolonIQ’s global market data and analysis through the year powers our Annual Outlook for education, and is available exclusively for HolonIQ customers. The 2021 Outlook provides over 150 pages of expert analysis and insights into the underlying dynamics of change for education, how and where investment is supporting innovation, and commentary about the models and teams that are shaping the future.
The Outlook provides HolonIQ’s expert analysis and key data points on the global education market and insights into future areas of growth.
Governments, employers and consumers together will spend over $7T a year on education and training by 2025. Post COVID, we expect to see significant growth in early childhood and workforce segments, deflation in higher education and K12 growth driven by emerging markets. Meanwhile, education technology will double in size relatively quickly. Regulation will tighten before easing as digital learning becomes mainstream, public-private partnerships gradually accepted and credentials will become more diverse.
New models, new capital and new players will enter the education market and the post- secondary landscape will gradually re-shape. Emerging markets are positioned to adopt leapfrog approaches to innovation.
2020 saw a massive $16.1B of education venture capital and over $20B of M&A activity in a surge of growth capital & consolidation. Asia’s billion-dollar mega-rounds crowded out record late-stage venture funding, increasing the total of EdTech Unicorns to nineteen. Private Equity and corporate consolidation dominated M&A with a record ‘Go Private’ trend offset by a SPAC kick-off.
While Asia-based K12 B2C investments represent the largest 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, illustrating the underlying dynamic at play as the world moves through significant workplace and demographic change.
270 education stocks closed 2020 with a $296B market cap, up $75B over the full year with now 44 stocks with over a $1B market cap. 2020 saw two ‘take privates’ complete, 16 IPOs, with 5 SPACs ready for launch on top of a massive organic K12 APAC gain, driving the lift in total value. We expect high-profile IPOs in 2021 and SPACs racing the clock to acquire targets.
16 IPOs added another $7.5B+ of value to finish the year with a combined $296B Market Cap for all education stocks. 17zuoye was the standout, leaving the list of startups Unicorns and finishing the year with a $2.4B market cap.
Advanced Tech will grow 5x through to 2025 and reach over $20B of annual expenditure in that period. Artificial Intelligence continues to embed more deeply into learning processes and Blockchain technology is increasingly used for recognition of learning through credential systems.
The global AR/VR market in education is expected to reach $12.6b by 2025. In 2020, there were ten $10M+ venture capital rounds in the education-related AR/VR segment, a strong indication that the use of augmented and virtual reality is accelerating to become more mainstream in learning processes.
Giant education brands, publishers and more recently technology platforms cast long shadows across the global education sector. Their reach affords significant influence, but as trust declines with mega-brands and as new players enter the fray, giants are having to rethink their strategies.
2020 saw publishing giants continue to actively pursue digital strategies and investments, while Tech giants see the opportunity in the education vertical and move closer to delivering technology focused upskilling, either in partnership or through their own increasingly recognized credentials.
All markets experienced significant challenges to their education systems during 2020, with COVID-19 exposing shortfalls in digital infrastructure and skills. Changes in policy across many regions cleared the path for online learning and demand for B2C EdTech solutions were sought by governments, schools and universities as the world pivoted to online delivery.
Notable markets in Asia include India, whose new National Education Policy will support substantial innovation and change over the next ten years, and Indonesia, which is set to become the next tech-driven powerhouse in the region. The US remains the largest market for diversity of innovation, while China’s huge investments in technology will no doubt deliver continued growth in K12 and vocational education.
The Outlook contains summaries for twelve regional markets globally including key transactions and market activities.
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