The evolution of Edtech:

Activity in private and public markets

October 2022
The home of Edtech innovation.

This report builds on the launched Founders, investors and enablers

Edtech Database, which is powered can claim their profile on the
by Dealroom and initiated by Edtech Database and improve the
Brighteye Ventures. visibility of their (portfolio)
company.
In this report ʻEdtechʼ refers to the
refers to Education technology For any additional questions,
startups. For details see please contact
methodology and definition. [email protected].

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Page / 3
Key takeaways.

Thereʼs huge untapped potential in

Edtech valuations have been
$7.6B venture capital invested in education.
slashed in public markets this
Edtech startups so far in 2022.
year.
Education is roughly a $6.5T market, of
Global VC activity is down 37% in H1 However, publicly traded value is only a which only <4% is digitized. The sector is
2022 compared to the same period last small fraction of the overall Edtech vastly underfunded in comparison to
year. Amongst the dominant regions, sector. Private companies are still other sectors of similar size, like health.
Europe shows the strongest signs of growing, up 13% since the end of 2021.
resilience, attracting $1.4B in H1 2022, its
highest half-year ever.

Combined value of global Edtech The Edtech opportunity

VC investment in global Edtech startups
$8T

$6.5T
$20.8B $43B $6T $6T
$85B $5T
$14.8B
$10B+ $73B
$50B $294B $332B
$185B
$133B

2016 2017 2018 2019 2020 2021 2022 2019 2020 2021 Today Mobility Insurtech Food Education Health
YTD*
 Why this report.
Itʼs inevitable that periods of enormous growth donʼt continue
forever, though itʼs still somewhat shocking when the periods end.
Edtech hasnʼt been immune to the ongoing downturn. We wanted
to explore how markets have evolved in recent years, to
contextualise what weʼve seen so far in 2022. The good news:
Edtech remains an enormous, underinvested opportunity. The bad
news: the momentum the sector has been building in recent years
has slowed significantly as investors tighten their belts to better
understand the downturn.

Education is a $6.5T industry only in the early days of its

digitisation. Though the last two years proved to be a period of
huge growth for the sector, Edtech remains largely underinvested
compared to other industries of similar size. After the swathes of
activity in 2020 and 2021, this year started off with a high degree of
uncertainty for Edtech companies.

This report explores global edtech investment across geographies

and sub-sectors in recent years as well as the performance of
public Edtech companies. Beyond looking at historical data, this
report explores exciting niches that hold promise to make learning
more effective, affordable and accessible for learners of all ages.

Page / 5
 Table of contents

Value creation in global Edtech page / 7

The evolving Edtech funding landscape page / 19

Trends and opportunities page / 27

Page / 6
1 Value creation in global Edtech
Edtech valuations have been slashed in public markets this year, down
almost 50% compared to the end of 2021.

Combined enterprise value of public Edtech companies*

» view online

$100B

$85B

$75B
$73B -49%

$50B
$50B
$43B

$25B

2019 2020 2021 Today

*Sum of the valuations of public global edtech startups founded after 1990. Using estimated valuations based public markets and publicly disclosed valuations as of September 2022. Dataset: 61 public
Page / 8 Edtech companies founded since 1990.
By looking at the Year-to-date performance of selected VC-backed public companies
performance of a range of Edtech index*
individual companies, we
can better understand how EMCLOUD

sub-sectors are faring.

● Companies that are in recovery

operate in the B2B Saas space
(PowerSchool and Instructure).
● MOOC-providers like Coursera and
2U have suffered significant falls in
performance that are reflected in
falls in value. Notably, Coursera
missed its estimates for revenue,
and in Q2 the company reported a
4% decline in the degree segmentʼs
revenue, mainly due to
lower-than-expected student
-54%
enrollment.
-46%

Page / 9 *Edtech index: The Global X Education ETF. Source: Dealroom.co

 Why have public Edtech companies have suffered significant falls in
performance?

“ The disappointing news is that if you look at Education as a

theme over the long-term, it has underperformed compared
to the broader market. And this underperformance has
dipped severely in the last year alone.
“Weʼre surprised to see areas like Higher Education, which have traditionally been
perceived as countercyclical, underperform to the extent they have. We never expect
markets to pull back for Higher-Ed companies because the demand for solutions targeting
this age group itself has historically proven to increase during a challenging period.”

Thomas A. Singlehurst
Head of European Media Research & Global Education Research
Event: Brighteye’s Edtech Startup Festival 2022 »
But publicly traded value is still only a small fraction of the overall Edtech sector.
The value of private companies is still growing, up 13% since the end of 2021.

Combined value of Edtech companies Most valued private Edtech startups » view online
» view online
▊ Private edtech companies ▊ Public edtech companies

$400B

$85B $43B -49% today vs 2021

$300B
$259B

$200B $183B
$294B $332B
+13% today vs 2021

$100B

2019 2020 2021 Today

* Sum of the valuations of global edtech startups founded after 1990. Using estimated valuations based on most recent VC rounds, public markets and publicly disclosed valuations as of September 2022.
Page / 11 Source: Dealroom.co
 Edtech is still one of the smallest sectors by value, but private companies
are growing at the same level as more mature sectors, such as Health.

Ecosystem Value Growth

Combined private enterprise value (2022)* in combined private value, 2021 vs Today

Fintech $2.4T Energy 39%

Enterprise software $2.1T Food 38%
Health $1.7T Security 31%
Transportation $1.1T Enterprise Software 24%
Food $0.8B Fintech 20%
Marketing $0.7B Robotics 15%
Energy $0.5B Marketing 15%
Security $0.5B Transportation 14%
Gaming $0.4B Health 13%
Edtech $0.3B Edtech 13%
Travel $0.3B Gaming 13%
Robotics $0.3B Travel 12%

*Sum of the valuations of startups founded after 1990. Using estimated valuations based on most recent VC rounds and publicly disclosed valuations as of September 2022.
Page / 12 Source: Dealroom.co
Europe is the smallest of the major Edtech regions by combined private value, but is
the second fastest growing, ahead of the US and behind India which is blazing a trail.

Ecosystem Value Growth

Combined private enterprise value (2022)* in combined private value, 2021 vs Today

United States $150B India +26%

China $72B Europe +23%

India $45B United States +13%

Europe $35B China +0.3%

*Sum of the valuations of Edtech startups founded after 1990. Using estimated valuations based on most recent VC rounds and publicly disclosed valuations as of September 2022.
Page / 13 Source: Dealroom.co
 Will Europe be the next leader in the Edtech space?

“ When compared to other mature markets, such as

India, China or the US, the European Edtech sector
has always been complex because the continent
isn't one big homogeneous market.
At GoStudent, we focus on five European markets that in terms of size are contributing to
the larger piece of our revenues today (DACH, France, UK, Spain and Italy). But we consider
that thereʼs good growth potential in most European markets – for instance, Turkey, and
Poland have huge opportunities. However, the continent is still underserved when it comes
to really good Edtech platforms."

Felix Ohswald
Founder, GoStudent
Event: Brighteye’s Edtech Startup Festival 2022 »
Public listings are few and far between, but M&A activity already surpassed 2020
levels after just nine months of the year.
Number of M&As of Edtech startups Number of IPO & SPACs of
» view online Edtech startups » view online

15
15
250

210
200
10
10
150 139

106
100 95
5
5

50 2

2022 2022
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
YTD YTD

Page / 15 Source: Dealroom.co.

Some of the sector’s biggest names have been on buying sprees, as
market consolidation ramps up.
Selected Edtech consolidations since 2020

Page / 16 Source: Dealroom.co.

 Are edtech exits dropping out?

“ When you look at the public companies in the Edtech space,

they were hit hard over the last couple of years. Soon we
might see private equity firms buying out public Edtech
companies for attractive prices and turning them into
private enterprises again.
Weʼve also already started to see the impact of the current climate on late-stage companies.
The public market climate has lead to a massive decrease for late-stage growth Edtech
companies. However, in the earlier stages, the outlook is more positive as we see deals still
happening.”

Felix Ohswald
Founder, GoStudent
Event: Brighteye’s Edtech Startup Festival 2022 »
 There have now been 70 Edtech unicorns globally. Unicorn creation has slowed from the
highs of 2021, but there are already nine new unicorns in the class of 2022.

Number of new Edtech unicorns globally* New Edtech unicorns in 2022:

» view online » view online
10
10
9
9

6
5
5
4
4

Q2 Q2 Q2 Q2 Q2 Q1 Q2
2017 2018 2019 2020 2021 2022 2022

A unicorn is defined as a rapidly scaling company (and tech enabled) that has reached a $1 billion valuation, on the basis of a funding round (unrealised), acquisition or IPO (realised).
Page / 18 *Historical data excludes failed unicorns, closed and discontinued companies. Source: Dealroom.co.
2 The evolving Edtech funding landscape
 After a record-breaking 2021, VC funding in global Edtech has slowed down.
Edtech startups have raised $7.6B globally thus far in 2022.

Global venture capital investment in Edtech startups » view online

▊ total reported venture investment ▊ annualized projection based on Jan-September reported venture investment

$25B

$20.8B
$20B

$15B $14.8B

$10B+
$10B $9.4B
$7.7B
$5.7B $5.2B
$5B
$7.6B

2016 2017 2018 2019 2020 2021 2022YTD*

Source: Dealroom.co.* Due to report lag, the last 12 months are systematically under reporting especially on early-stage rounds. Estimation calculated taken into account rounds from
Page / 20 Jan 1st to September 28th 2022.
The fall in Edtech funding since 2021 is largely due to a drop in late-stage rounds. The
number of $100M+ megarounds has nearly halved compared to the highs of H1 2021.

Global Edtech VC funding by round size Number of megarounds in Edtech startups

» view online » view online
▊$0-1M (pre-seed) ▊ $1-4M (seed) ▊ $4-15M (series A) ▊ $15-40M (series B)
▊ $40-100M (series C) ▊ $100-250M ▊ $250M+ ▊$100-250M ▊ $250M+
100% 30
30

80% 23 24
58% in H1 2021 vs.
50% in H1 2021

20
60%
15

40%

10
7
20%

H1 H1 H1 H1 H1 H1 H1 H1 H1 H1
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022

Page / 21 Source: Dealroom.co.

Early-stage investment has slowed down, but H1 2022 was still Edtech’s third
biggest period for early-stage investment, up 33% from H1 2020.

Early stage investment into Edtech startups » view online

▊$0-1M (pre-seed) ▊ $1-4M (seed) ▊ $4-15M (series A) ▊ $15-40M (series B)

$3.0B

$2.5B

$2.2B
$2.0B
$1.6B

$1.0B

H1 H1 H1 H1 H1 H1 H1 H1 H1
2014 2015 2016 2017 2018 2019 2020 2021 2022*

Page / 22 Source: Dealroom.co.* Due to report lag, the last 12 months are systematically under reporting especially on pre-seed and seed rounds.
Early-stage rounds sizes (Seed to Series B) are still on an upwards trajectory, while late-stage
rounds (Series B+) are showing signs of decrease after the peak in 2021.

Median round sizes of global Edtech (self-labelled rounds)

Seed Series A Series B Series C+

$2M $8.5M $60M
$30M
+56% YoY
+14% YoY
+12% YoY
$1.5M $6.5M

$20M $40M
-27% YoY
$1M $4.5M

$10M $20M
$0.5M $2.5M

19

20

21

22
19

20

21

22

19

20

21

22

19

20

21

22

20

20

20

20
20

20

20

20

20

20

20

20

20

20

20

20
Page / 23 Source: Dealroom.co. Analysis based on 2.1K rounds raised by global Edtech startups from 2019 to September 2022.
 European Edtech startups lead investment growth in the first half of 2022,
attracting 21% of the global Edtech funding, up from 12% full year 2021.

Global Edtech investment per HQ region

▊ Europe ▊ United States ▊ India ▊ China ▊ Rest of the world

5% 7%
10% 12% 18%

9%
1%
31%
48% 20% 22%
55%
6%

8%
38%
47%
41% 12%
30%

19%
21%
9% 12% 12%
7%
H1
2018 2019 2020 2021 2022

Page / 24 Source: Dealroom.co.

 After holding up in the first half of the year, in Q3 VC funding has slowed down
considerably for European Edtech startups.
VC investment in European edtech startups » view online

$1.5B

▊ $250m+
$1.0B Growth
▊ $100–250m
▊ $40–100m (series C)
Breakout
▊ $15–40m (series B)

$0.5B ▊ $4–15m (series A)

▊ $1–4m (seed) Early
▊ $0–1m (pre-seed)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2018 2019 2020 2021 2022

Page / 25 Source: Dealroom.co.* Due to report lag, the last 12 months are systematically under reporting especially on pre-seed and seed rounds.
 Globally, funding in all Edtech segments has slowed down compared to 2021, with Higher
Education and Pre-K being hit the hardest. K-12 attracted the most funding in H1 2022.

VC investment into global edtech startups in H1 2022

Top 3 deals by sector in H1 2022
(% growth H1 2022 vs 2021 full year average)*

K-12 -41% $2.6B

Corporate Learning -30% $2B

Lifelong and Consumer

Learning -45% $1.1B

Higher Education -48% $1B

Pre-k -76% $0.2B

Page / 26 Source: Dealroom.co. *Overlap between segments may incur double counting.
3 Trends and opportunities
Thereʼs huge untapped potential in education: the sector is severely underfunded compared
to other sectors of similar size.

Global size of key consumer markets as of 2021 VC investment 2019-2022YTD

$8T $307B

$6.5T
$6T $6T
$207B
$5T

$114B

$37B $51B

Mobility Insurtech Food Education Health Mobility Insurtech Food Edtech Health

Page / 28 Source: Dealroom estimates, Worldbank, OECD, Eurostat, McKinsey for insurance & banking via A16Z. Freelance via Upwork and McKinsey. Education is $6.5 trillion according to Holon IQ.
While K-12 remains the dominant Edtech segment, Corporate Learning is gaining a
greater share of VC investment.
Share of VC investment per Edtech segment

▊ Pre-K ▊ K-12 ▊ Higher Education ▊ Corporate Learning ▊ Lifelong and consumer learning

100% 7%
12%
18% 16% 15%
22% 7%
9%
12%
75% 14% 13% 17% 24%
28%

20% 18% 16%

50% 16%
52% 69%
36%
35% 37%
25% 36%

9% 14% 11%
5% 7% 5%
0%
2022
2017 2018 2019 2020 2021
YTD

Page / 29 Source: Dealroom.co. Source: Dealroom.co. *Overlap between segments may incur double counting.
European-based corporate learning startups are growing faster than in other regions, raising
36% of global VC investment so far in 2022, up from 18% in 2021.

Share of VC investment into corporate learning startups per region Top European corporate learning rounds
in 2022YTD » view online
▊ Europe ▊ USA ▊Asia ▊Rest of the world

100% 2% 2% 5%
6% 8%
13% 9% 5%
13% 6% $200M Series D $200M Series C $73M Series B
13% Jan 2022
Jun 2022 Jun 2022

75% 24%

57% 72% 50%

50% 71%
64%
$64M Late VC $30M Series B $30M Series B
59% Jun 2022 May 2022 Feb 2022

25%
36%
28%
18% 17% 18%
4% $23M Series A $22M Late VC $19M Series B
2022 Feb 2022 Mar 2022 Aug 2022
2017 2018 2019 2020 2021
YTD

Page / 30 Source: Dealroom.co.

Startups are tackling the student debt problem to make higher education more affordable and
ensure students have a sustainable path to paying off their debts.

» Explore 100+ startups tackling student debt

Student loan lenders & refinancers:

Enable students to replace their current debt obligation with
one that has more favorable terms (e.g SoFi ).

Income-sharing agreement:
"Earn now, pay laterʼ" solutions, in which a student receives
upfront money for college in exchange for a fixed percentage of
their future income (e.g Ironhack).

Employer student loan assistance programs:

Employee-retention startups targeting student loans.
(e.g Candidly).

» Find more on the Blog

Page / 31 Source: Dealroom.co.

Senior learning is still a niche, but represents a huge untapped opportunity in Europe.

For purpose: learning skills you need for work and/or living The European population, similar to other developed
a better life regions, is aging, driven by increased life expectancy
and lower fertility rates. Today, approx. 30% of the
population (90 million) is over 55 and by 2050, it will
increase to 42% of the total population (140 million).

The new generation of 65+ is digitally connected and

willing to engage in and pay for online activities.

An increasing percentage of seniors are spending more

For pleasure: Entertainment focused, finding new hobbies, time online. In the UK a majority of online seniors
meeting new people spend at least six hours a day online and own an
average of five devices.

The normal age of retirement in Europe is being

pushed up by most countries to 65 years old, which is
forcing workers to stay in the workforce longer.

» Read Brighteye Venturesʼ deep dive

Page / 32 Source: Brighteye Ventures

Edtech can play an important role in senior learning.

“ Compared to previous generations, baby

boomers have higher expectations with
regards to older adulthood. They want to
“ “Just as globalisation and technology
changed how people lived and worked,
longevity will do the same over the coming
years as we live much longer lives.
learn new skills, discover new interests,
enjoy and share experiences, connect with
others and keep growing. The classic three stage life made up of 'education,
work, retirement' will need to be reinvented as the
Likewise, they get to retirement wanting to stay active number of years spent in retirement stretches
with a high level of vitality coupled with an increasing significantly. I believe there is going to be even more
familiarity with new technologies." of a need to generate income in retirement, coupled
with the renewed sense of purpose lost from the work
stage.”

Jon Balzategui Alex Ramamurthy

Cofounder & CEO at Vilma, online, live Founder & CEO at Mirthy, online events
courses taught by seniors to seniors platform for seniors

Source: Brighteye Ventures

 Check out previous
reports.

The H1 2022 European Edtech Funding

Report 2022 by Brighteye Ventures

The European Edtech Funding Report

2022 by Brighteye Ventures

Page / 34
Methodology & definitions.

Startups, scaleups, grownups Venture Capital, Investors Valuation

and tech
A startup is a company designed to grow Domestic investors are all investors based The combined valuation of the tech
fast. Generally, such companies are in Belgium. European investors exclude ecosystem is based on their market cap
VC-investable businesses. Read more Belgium but include the entire European or latest transaction value.
about our methodology here. continent, the UK and Russia, but
excluding Turkey. Transaction value is realized from exit or
implied unrealised valuation from the
Some become very big (e.g. $1B+ Investment numbers refer to rounds such latest VC round, which is either
valuation). Read more about our unicorn as Seed, Series A, B, C, …. late stage, and announced or estimated by Dealroom
methodology here. growth equity rounds. VC investment based on benchmarks.
When startups are successful, they figures exclude debt or other non-equity
funding, lending capital, grants and ICOs.
develop into scaleups (>50 people), Underlying Data
grownups (>500 people) and result in big Investment rounds are sourced from
companies. Dealroomʼs proprietary database and
public disclosures including press
software aggregate data from multiple
Only companies founded since 1990 are releases, news, filings and verified
sources: harvesting public information,
included in this report. user-submitted information.
user-submitted data verified by
Dealroom, data engineering. All data is
Sectors & Industries verified and curated with an extensive
manual process.
Industry classification follows Dealroomʼs The data on which this report builds is
What is a Startup? proprietary taxonomy, which was built available on edtech.dealroom.co.
specifically for startups. A given startup For more info please visit dealroom.co or
may belong to up to two industries. contact [email protected].

Page / 35 Source: Dealroom.co.

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