HolonIQ’s global market data and analysis through the year powers our Annual Outlook for education, and is available exclusively for HolonIQ customers. The 2022 Outlook provides over 170 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.
Global EdTech expenditure is expected to reach approximately $300B in 2022 and we expect to continue to grow at 16.4% CAGR to $404bn in 2025. Even at this level, digital spend will only represent 5.5% of the total market.
EdTech Venture Capital reached 3x pre-pandemic investment levels in 2021, accelerating startups around the world with over $20B of funding. Fueled by a massive US and EU investment surge and India’s growth charging onwards, collectively global growth covered an $8B investment collapse from China and managed to set record growth for the sector. M&A surged with 580 transactions delivering almost $40B of acquisitions.
307 education stocks closed 2021 with a $192B market cap, down $120B over the full year with now 47 stocks > $1B market cap. 2021 saw a massive China crash losing $130B of value, meanwhile 18 IPOs and 2 SPACS added $26B back. 6 acquisitions and ‘take privates’ accounted for $400M of market cap loss. A long line of IPO hopefuls are watching a cooler capital markets landscape.
The 2022 Outlook provides a detailed list of the top performing listed education companies and those which have performed the worst over the last year.
AI powered adaptive curriculum is in high demand as the world turned to online learning – a trend that is likely to stay when school returns. Simulated learning is becoming mainstream in workforce learning, while the Metaverse remains some time away for mainstream education. Web3 offers the promise of decentralized access to education and learning, but the focus for now is utilizing blockchain technology to enable tamper-proof verification and ease of credential sharing.
Giant education brands, publishers and more recently technology platforms cast long shadows across the global education sector. Their global 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. Long standing infrastructure, relentless innovators and ever-feared competitors, technology giants face an uncertain regulatory landscape. Meanwhile, the world is looking for mechanisms to scale education, without creating monolithic entities which often struggle to meet hyperlocal contexts.
Globally, all markets are preparing for deeper integration of digital into their education systems, with broad-ranging policy for internet access, digital platforms, enhanced security and privacy regulations. Expect to see further activity in many markets around national platforms and government led initiatives for EdTech efficacy and teacher capability development.
China’s policy crackdown on EdTech and technology giants more broadly has decimated after-school tutoring with an extensive ripple effect in the industry, and, while India’s EdTech market is growing fast (and going global), regulatory murmurs are also in play.
Europe has opened the taps for EdTech uptake, but there is still much growth runway and the US saw significant demand for EdTech and influx of capital.
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