Innovation requires capital and compared with other sectors, education is critically undercapitalized. Governments are struggling to fund education at historic levels and education is not attracting enough private capital to fund the innovation that’s needed. Public-Private Partnerships and private capital will be required for education to deliver on its social and economic objectives.
The number of education IPOs has steadily grown over the past 5 years, with 19 listings in 2018 and June 2019 seeing the largest global education IPO event ever with China East Education raising $625m and trading with a market cap of around $3B.
Globally, there are 250 Education Stocks with a total market cap of $190B, generating $80B of revenue and $10B of EBITDA powered by 668,000 teachers and professionals.
2018 saw 11 Chinese education companies IPO. Pluralsight was the only US education company to IPO in 2018 and Brazil saw Arco list on the NASDAQ in September. The only European activity was the EdTechX SPAC listing on the NASDAQ and VR Education listing on the LSE. EduLAB listed on the Tokyo Stock Exchange late in the year as well.
While many of the 250 companies operate across several education categories, we have classified into a primary sector where they generate most of their value. One-third focus on K12 learning with a market cap of $58B, with a few giants dominating and many smaller companies. Post Secondary is more evenly spread with 70 companies and a market cap of $46B.
Publishing is represented by a small number of companies (15) with a high combined market cap of $34B, illustrating the consolidated mature state of that part of the sector. 35 Corporate education listed companies are valued at $26B, while 24 listed education companies in the ‘digital’ category have a total market cap of $15B. Of the 24 in the digital group, the top 10 by market cap include four learning management systems, two language learning and one each of education resources (digital content), OPM, Assessment and Education Management System.
Almost every year we see an education company ‘go private’, the majority through private equity buyouts, with a few strategic acquisitions from global players such as Pearson or Blackboard. As an extreme example, Laureate has been listed, taken private and re-listed again multiple times.
This week Navitas shareholders approved a $1.5B takeover, taking the company private, which has been listed since 2007.
Of the 5 Scenarios for Education in 2030, Education-as-Usual is least preferred but most likely according to 5000+ educators, entrepreneurs, leaders and investors from 30+ countries who have contributed to the Education in 2030 Project.
806 executives from 63 countries report an overall positive short-term outlook for education but most expect sector disruption by 2025. Emerging markets expect the highest levels of short-term growth.
Education is the key enabler for nations to realize their AI ambitions, yet the shortage of skilled talent remains the number one barrier to innovation.
The HolonIQ Global Executive Panel reports strong early adoption of artificial intelligence, emerging capability building, but still many barriers.