$87bn+ of Global EdTech funding predicted through 2030. $32bn last decade.

Global EdTech Venture Capital will nearly triple over the next decade.

Slide2

EdTech started the decade with $500m of Venture Capital investments in 2010 and finished 14x higher at $7B in 2019. We expect over $87bn to be invested over the next 10 years, almost triple the prior decade.

Every January, we look back on the prior year to reflect on Venture Capital investment in education technology. This January marks the close of an extraordinary decade for education technology with over $32B in funding backing a vision to transform the way the world learns and supporting the United Nations Sustainable Development Goal four (SDG4).  HolonIQ’s dataset of investments in the global education market powering this analysis has now reached over 18,500 transactions and is available from Q2 as an annual SaaS subscription.

Global EdTech Venture Capital will nearly triple over the next decade.

EdTech started the decade with $500M of Venture Capital investments in 2010 and finished 14x higher at $7B in 2019, down 18% off a 2018 high of $8.5B in VC funding. China made up 52% of the last decade’s EdTech VC funding, the US represents 33% followed by Europe, India and the Rest of the World, each investing about 5% of the global funding total.

Emerging Markets such as Africa, Latin America and Southeast Asia are growing rapidly and have large under-served populations looking to leapfrog traditional developed education systems to lower cost and improve access and outcomes, supporting learners, teachers and administrators with advanced technology. The latter half of the next decade may well see investment traction in large emerging markets, particularly Southeast Asia, India and Latin America, where multi-billion dollar funds are being set up to deploy capital into education and other impact sectors.

10 charts that explain the Global Education Technology Market

10T market by 2030

1. Education expenditure will grow to $10T by 2030.

Expenditure on education and training from governments, parents, individuals and corporates continues to grow to historic levels and is expected to reach USD$10T by 2030.

Source: HolonIQ

Slide4

2. Driven by 500m more school students by 2025.

By 2025 there will be half a billion more school and university graduates in the world than today, driven primarily by population growth in developing countries. How will current models of education deliver to the scale, quality and speed required?

Source: Wittgenstein Centre

Slide4
Screenshot 2020-01-28 17.01.17

3. However, education is starved of capital compared with other sectors.

Innovation requires capital. Governments are struggling to fund education to previous levels and education is not drawing on enough private capital to fund the innovation that’s needed. Public-Private Partnerships will be critical to supporting future growth, innovation and access to education.

Screenshot 2020-01-28 16.53.17

4. It is also grossly under digitised, with less than 3% of expenditure on technology.

As a sector, education is a digital laggard with less than 3% of overall expenditure allocated to digital, presenting a serious challenge given the scale of what’s to come.

Source: HolonIQ

Screenshot 2020-01-28 16.53.17
Digital Spend is growing

5. However, digital spend is growing.

In 2018, education spent $142b on digital. While this is forecast to grow to $342b by 2025, it is still less than 5% of overall expenditure.

Source: HolonIQ

Slide8

6. Advanced tech will embed into delivery and learning processes.

Applications of advanced technology in education and learning will begin to hit their strides by 2025 with AR/VR and Artificial Intelligence becoming increasingly integrated into core education delivery and learning processes. Most likely starting in the corporate and non-accredited sectors.

Slide8
2020 VC Decade

7. VC investment is set to triple in the next decade.

Venture Capital investors can see the favourable dynamics of the global education and training market, investing $7b in 2019, up from $500m in 2010, $2b in 2014 and moderating from the $8b high of 2018. 85% of that was in the last 5 years and nearly 50% of the last decade’s funding occurred in the last 2 years. This is set to grow but is not evenly spread across the globe.

Source: HolonIQ

2020 VC Decade_2

8. China makes up half of all EdTech VC investment.

China, with the largest education market in the world, has led education VC investment growth over the past five years. China made up 50% of all Global VC investment in education through the decade, the USA 33% followed by Europe, India and the Rest of the World, each investing around 5% of the global funding total.

Source: HolonIQ

2020 VC Decade_2
Slide11

9. Expect 100+ education companies with $1B+ Market Caps by 2025.

Venture Capital investment ultimately drives more exits in the form of public listings. In 2015 there were 10 listed education companies with Market Cap’s over $1B, growing to 40 in 2019 and expected to be 100+ by 2025.

Slide12

10. However, the devil is in the detail when it comes to education.

Education is a complex system. When it comes to understanding market dynamics and which technologies, business models and parts of the sector are likely to grow or shrink, it pays to understand the nuance. The Global Learning Landscape taxonomy, consisting of 50 clusters of innovation helps to unpack this complexity.

Source: globallearninglandscape.org

Slide12

Related Research

The Complete List of Global EdTech Unicorns

3 September 2020. 

The Complete List of Global EdTech Unicorns

$4.5B Global EdTech Venture Capital for 1H 2020

10 July 2020. 

The first half of 2020 was the second largest half-year for Global EdTech Venture Capital. We are reconfirming our expectation that over $87bn will be invested in EdTech over the next 10 years, almost triple the prior decade.

58 EdTech Mega $100m+ VC Rounds

2 July 2020. 

The fundraising evolution of every single education player globally that has raised a USD$100m+ VC round

Southeast Asia EdTech – $480M of VC in 5 Years

7 May 2020. 

The education innovation opportunity in Southeast Asia is rapidly gaining momentum. Often overshadowed by that of its neighbours, China and India, Southeast Asia is building a vibrant, much needed and regionally focused ecosystem.