EUROPEAN

EDTECH
FUNDING
REPORT
2023

4th Edition
Welcome to the Fourth Edition of the European Edtech Funding Report

In venture and startup circles, 2021 undoubtedly represented a boom year. Optimism that the pandemic was coming to an end and that the world was reopening
extended to ambitious founders and early teams. Indeed, this carried through to 2022, certainly in the first few months, but when pandemic-related public
spending cuts and rising costs of living combined with Russia’s invasion of Ukraine, optimism ebbed away. It was replaced by a cocktail of caution and stoicism
that led to many Edtech providers, from startups to large incumbents, providing support to the Ukrainian children and adult learners.

Following a strong start to the year for the global Edtech ecosystem, particularly for Europe which secured 40% more funding in H1 22 than in H1 21, positive
momentum slowed, reflecting the broader landscape in public and private markets. This said, Europe demonstrated more resilience in funding and deal activity
than comparable regions. This is explored in this report. Green shoots are still very visible for the sector, but we expect a relatively slow H1 23.

At Brighteye, we remain excited about the prospects for Edtech in Europe and are determined to help Europe lead the way. With dramatically reduced barriers
to customer adoption , increased appetite for impact investments , and the ever-growing interest of US investors in European markets , we see a prosperous
(2) (1) (3)

trajectory for entrepreneurs and founding teams operating in the space.

This report takes a deep dive into venture funding in the last 12 months across global and European Edtech, including both historical and global data sets.

We would love to have your feedback, and are always keen to connect with inspiring founders and investors, looking to help our world learn and grow. Please do
get in touch ☺ ([email protected]).
Methodology

During the past 18 months, we have been working closely with Dealroom to develop the leading open-sourced Edtech-focused data platform. In this report, we
have used Dealroom’s data as a starting point and then where relevant, consolidated it with relevant insights from Crunchbase, Pitchbook, Tracxn and our
previous work. We would like to thank Dealroom for their co-operation in the production of this report.

Our searches in Pitchbook and Crunchbase included companies based within Europe and categorised as Edtech (vertical) and/or education (keyword). Searches
were conducted in the first and second weeks of January and so may be subject to change as new details emerge.

Sources: (1)Atomico State of European Tech Report 2021; (2)Brighteye market research/ (3)The State of European Tech Survey 2020 2
Contents

Part 1: Global Part 2: Europe Part 3: What’s next

Funding: Funding: - Reviewing our 2022 predictions 34
- Total Edtech VC funding 6 - Total Edtech VC funding 17 - Our predictions for Edtech in 2022 36
- Edtech VC funding by region 7 - European Edtech VC- 2017-2022 18
- Average deal sizes 8 - Average deal size 19
- Breakdown of total funding by round size 9 - Breakdown of total funding by round size 20
Appendix:
- Breakdown of deals by round size 10 - Breakdown of deals by round size 21
Comparing Europe with the US & Canada
- Portion of global deals done in Europe 22
Key activity: - Funding by user demographic 23 - Comparing macro figures on total 41
funding, number of deals and average
- 10 largest Edtech rounds of 2022 11
deal size
- Unicorns minted in 2022 12 Key activity:
- Comparing VC funding in Pre-K, K-12 42
- Number of unicorns by region 13 - Most active Edtech VCs 24 and Higher Education
- Most active VCs in Edtech 14 - Largest Edtech rounds 25
- Funding by market 26
Spotlight on founder genders: - Spotlight on Italy 27
- Funding by founder gender 15 - Angel investor activity in Europe 29

Spotlight on founder genders:

- Spotlight on UK and France 31

3
Headlines (with a European focus)

1. European Edtech showed more resilience than other major Edtech regions
Though 2022 saw falls in deal number and funding in all regions, Europe demonstrated the most resilience, with
funding falling by 28%, relative to 64% for the US, 89% for China and 46% for India. China’s fall represents the most
significant realignment, a market that in 2020 represented 55% of total global Edtech VC.

2. UK maintains top spot in Europe and Germany and Austria make up the top 3
Edtech companies in the UK secured the most funding, at $583M and 81 deals, more than $200M ahead of the next
market, Germany with $363M and 34 deals. Austria, maintained a top 3 position, but France slipped out of the top 3,
seeing a sharp fall in funding and deal activity relative to previous years. Italy was the only European market to see
increased funding and deal volume.

3. A year for Edtech specialist investors

As could be expected in challenging market conditions, Edtech specialists dominated the top 10 most active investors,
both in the global and European contexts. Indeed, 29/51 deals done by the top 10 most active investors in European
Edtech were secured by specialists. Brighteye was the second most active in global Edtech and most active in Europe.

4. Corporate learning the only vertical to grow by total investment secured

Considering funding secured by user demographics in Europe, we observe that the only Edtech sub-sector to see
increases in funding was corporate learning. All other sub-sectors (Pre-K, K-12, HE and lifelong and consumer learning)
saw declines, with the sharpest falls in Pre-K and lifelong and consumer learning investment.

5. Angels increasingly active in Europe and now involved in more deals than any other region
Using the best available data, Europe has seen the sharpest rise in angel investment activity in Edtech relative to other
major regions. The European markets with most angel activity are Germany and the UK.

4
Part 1: Global perspectives

Funding:
- Total Edtech VC funding 6
- Edtech VC funding by region 7
- Average deal sizes 8
- Breakdown of total funding by round size 9
- Breakdown of deals by round size 10

Key activity:
- 10 largest Edtech rounds of 2022 11
- Unicorns minted in 2022 12
- Number of unicorns by region 13
- Most active VCs in Edtech 14

Spotlight on founder genders:

- Funding by founder gender 15

5
In 2022, global Edtech funding returned to the levels seen in 2018, with a similar number of deals to 2021

972
transactions

1177 $20.1 B
transactions

1403 $15 B 998

transactions 1414 transactions
1302 transactions

1079
1244 transactions 1327 $9.4 B $9.1 B
transactions
transactions transactions $7.7 B
$5.9 B
$4.8 B $4.8 B
$3.4 B
2014 2015 2016 2017 2018 2019 2020 2021 2022

Funding doubled between 2019 and 2020 and rose again to 2021 but fell quite drastically in 2022 as part of macro contractions. Despite the stark appearance of
this fall, it’s consistent with changes to other sectors, such as healthtech and fintech. As we will go on to highlight, the scale of the drop hasn’t been consistent
between regions.

A positive that can be drawn from this data is that the number of deals remained roughly constant from 2021 to 2022. By juxtaposing the two trends, we can
conclude that there was still significant appetite to invest in 2022, even as round sizes fell significantly. It’s also been widely reported that, following multiple
compression in public markets, venture capital valuation multiples dipped when compared to their 2021 levels, particularly at Series B and later stages, though
specific data on this for the Edtech sector is harder to come by. You can explore our 2022 report with Dealroom on the public and private markets here.

Considering H1 22 to H2 22, we see that while total VC funding in H1 22 stood at $6.5B, H2 22 VC funding was $2.6B, a steep drop. Intriguingly, while there were
432 deals in H1 22, there were 566 in H22, representing firm resilience in the early-stage funding rounds. Green shoots remain clearly visible.

Sources: (1) Dealroom.co 6

Funding fell the least in Europe and RoW, with the steepest drop once again in China

$0-1 M $1-4 M $4-15 M $15-40 M $40-100 M $100-250 M $250 M+

$10 B
$9.3B
$9 B
$8 B
$7 B
$6 B
$5 B
$4.0B
$4 B $3.5B
$3 B $2.5B $2.2B $2.5B
$1.8B $1.9B
$2 B $1.5B
$1 B $0.2B
$0 B
2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022
EUROPE US CHINA INDIA REST OF WORLD

Considering how the macro funding figures break down by region, we can see drops on 2021 levels across all regions. However, some regions have demonstrated
more resilience than others.

For example, Europe saw a fall of only 28%, US 64%, China 89%, India 46%, and RoW 32%.

This resilience bodes well for European Edtech and also for Edtech companies in regions with less previous activity in the ‘Rest of the World’ category. This
represents an exciting trend- Edtech companies are raising money all around the world, enabling -per Brighteye’s core thesis– the possibility for education to
become more affordable, relevant, efficient and affective globally. Indeed, the gap between VC investment in Europe and the US, the leading market by
investment, narrowed in 2022 to $1.7B from $6.8B in 2021.

Sources: Dealroom.co 7
Average deal size fell by over 50% between 2022 and 2021

972
transactions

$20.7 M
1177
transactions
998
$12.7 M transactions

1414
transactions
$9.2M

$5.4 M

2014 2015 2016 2017 2018 2019 2020 2021 2022

Following a period of relatively stable average deal sizes between 2014 and 2019 and a sharp rise from 2019-2021, average deal sizes around the world fell
sharply in 2022, from $20.7M in 2021 to $9.2M in 2022. This represents a lower average deal size than we observed in 2020 but a significantly higher deal size
than we observed in 2019.

As reflected in previous slides, deals continued to be done, increasing from 972 in 2021 to 998 in 2022. While this indicates sustained interest among investors, it
also means that growth rates of Edtech companies, particularly at later stages, are likely to slow as capital is less available. Companies are remaining able to close
rounds and work towards solving their education-related problems!

Comparing H1 22 and H2 22 data, we observe that average deal size in H1 22 stood at $15M, falling to $4.6M across a higher number of deals in H2 22.

Sources: Dealroom.co 8
Edtech VC investment increasingly skewed towards smaller deals, with 44% of funding in deals over
$100M
When markets mature and larger rounds become more common, we can
$0-1m $1-4m $4-15m $15-40m $40-100m $100m+
typically expect the portion of total funding secured in larger rounds to increase
and therefore for the portion secured in smaller, earlier rounds to decrease.
100%
However, as discussed in last year’s report, the persistent dynamism of the
90%
Edtech sector has arguably led to the opposite trend: the portion of funding
raised in larger deals (>$40M) has decreased to 44% from a peak of 67% in
80% 2020. This reflects the type of deals done in 2022- average deal sizes have
44% reduced and a larger portion of deals were early-stage relative to previous
70% 62% years.
67%
60% This is likely the case for two key reasons.

50% 1. Edtech remains a nascent sector, with lots of new activity and few
companies having truly reached maturity, certainly as a portion of all activity.
40%
2. In 2022, growth stage investments slowed. Many of the funds that typically
30% operate in the later stages began repositioning towards making early-stage
investments, including Softbank and Tiger Global.
20%

10%

0%

2017 2018 2019 2020 2021 2022

Source: (1) Harvard Business School, Creating Value in Your Business Ecosystem; (2) Forbes- State of VC in 2021; Dealroom.co 9
Unsurprisingly, we see early-stage deal count increasing in this current environment

Considering the macro environment, it’s not surprising that we see reversals in
800
802
trends observed in 2020 and 2021 when it comes to the number of deals done
659 by round size. Again, this speaks to the fact growth-stage investors are entering
earlier stage deals and the fact Edtech remains a relatively nascent sector.
479

While from 2019- 2021 we observed decreasing numbers of early-stage deals

and increasing numbers of later stage, bigger deals, signalling the increasing
350
350 maturity of the first cohorts of growing Edtech companies, we observe a
reversal in these trends in 2022 with the number of smaller, early-stage deals
300
300
rising and the number of larger, later-stage deals falling.
258

250
Indeed, 88% of deals done in 2022 were early stage (<$15M), compared to
233 234
78% in 2021. Considering deals on the larger end of the spectrum, 12% of
197 deals were $15M or more in 2022, compared to 22% in 2021 and 10% in 2020.
200
173 178

144
150

102
100
64 67
57
51
50 32 32
28 52

20 18
0 13

2019 2020 2021 2022

$0-1 M $1-4 M $4-15 M $15-40 M $40-100 M $100 M+

Sources: Dealroom.co 10
3 of 10 biggest deals for European companies, 4 for US, 2 for Asia, 1 four South American
IPO & M&A transactions excluded

Company HQ Cluster Recent raise Investors* Valuation*

$800M (+$250M) Vitruvian Partners, BlackRock, Byju Raveedran,

Bengaluru, India 🇮🇳 Learning tools and resources
Growth Eq. Sumeru Ventures
$22.0B

$270M Sapphire Ventures, Institutional Venture Partners,

Montreal, Canada 🇨🇦 Learning tools and resources
Series D Bullpen Capital, Salesforce Ventures, Softbank
£1.5B

$340M Deutsche Telekom, Prosus, Speedinvest, Tencent,

Vienna, Austria 🇦🇹 Learning platform
Series D Dragoneer Investment Group, Coatue, Softbank
$3.5B

$265M Bessemer Venture Partners, Citi, General Catalyst

Denver, US 🇺🇸 Executive Education
Series F Willington, Oprah Winfrey
$4.4B

$225M International Finance Corporation, Temasek, Bharti,

Mumbai, India 🇮🇳 Learning platform
Late VC Kaizenvest, Artisan Partners, Mittal Family
$2.3B

$220M Index ventures, Lightspeed Venture Partners, General

London, UK 🇬🇧 Learning marketplace
Series D Catalyst, Founders Circle
$1.7B

$200M Molten Ventures, HV Capital, Silicon Valley Bank,

Berlin, Germany 🇩🇪 Coaching
Series C Speedinvest, Softbank, Sofina
$1B

San Francisco, US 🇺🇸 Jobs and recruitment $200m Coatue, Base10 Partners, Valiant Peregrine Fund $3.5B
Series F

$196M Insight Partners, StepStone Group, Elephant,

Winter Park, US 🇺🇸 Education device management
Series B Album VC
£0.9B

São Paulo, Brazil 🇧🇷 Training provider $178M DNA Capital $0.9B

Growth equity

Sources: Dealroom.co; Valuation at time of deal based on Dealroom methodology where not publicly available. 11
Only 6 unicorns minted in 2022

Company HQ Cluster Unicorn round Valuation

US 🇺🇸 Education communities $125 M $1.3 B

Learning tools and

Canada 🇨🇦
resources $270 M $1.5B

UK Learning marketplace $220 M $1.7 B

India Science education $100 M $1.1 B

School system
India
management $100 M $1.1 B

Spain Education courses $110 M £1.3 B

As of January 2023, there are 30 Edtech unicorns, collectively valued at $89B. 6 companies joined the list in 2022, compared to 23 in 2021. This means that rates
of unicorn creation have returned to 2019 levels. The positive that can be drawn despite this fall is the broadening geographic spread of home markets among
the new set of unicorns- indeed, 5 markets are represented within the set of 6 companies. For several of these markets, the companies represent their first Edtech
unicorn. That this was achieved in such turbulent market conditions bodes well for when activity returns to sunnier periods. As in 2021, it’s positive to see the
spread of focuses amongst the 2022 unicorn cohort, ranging from subject-focused companies like PhysicsWallah to course marketplaces like Domestika.

Many companies lost their unicorn status in 2022, amongst those were the majority of China-based unicorns from previous years, including Changingedu, Golden
Education, Hetao101, Huohua Siwei, Huike, HuJiang, Knowbox, VIPKid, Yuanfudao, Yunxuetang and Zuoyebang.

‘Dilution per round’, reflecting the multiple between the size of the round and the valuation, for the unicorns above represented 8.7X, far lower than the 13X we
saw in 2021, likely reflecting reduced valuations in the face of the widely discussed macro headwinds.

Sources: Dealroom.co; HolonIQ.com 12

The rate of new unicorns being created slowed in 2022

Edtech unicorns minted 2014-2022

45

United States
40 40

35
Asia
30

27
25

20

15

10

5 6
Europe

0 1 Oceania

2014 2015 2016 2017 2018 2019 2020 2021 2022

Sources: Dealroom.co; Chart includes ‘long list’ of Edtech unicorns, including companies like Kahoot! 13
High-profile North American funds continue to ramp up their Edtech investments

10

8 8

6 6 6
5 5 5 5

Looking at the VCs investing in the most Edtech companies across the sector (new investments only), Edtech specialist VCs take 2 of the top 3 spots- with GSV
and Brighteye among the top 3 most active VCs in global Edtech in 2022, along with Goodwater Capital.

Generalist VCs maintained some prominence in the top 10, including Tiger Global Management, Andreesen Horowitz and Global Founders Capital.

Considering fund HQ, 3 are based in Europe (Brighteye Ventures, Global Founders Capital and Educapital), 6 are based in the US (GSV, Goodwater Capital, Tiger
Global Management, FJ Labs, Andreesen Horowitz and 500 Global) and 1 in Asia (Inflection Point is based in India).

Comparing this set of funds and associated number of deals to 2021 deals, each place is fairly consistently ~50% of the deal number of the equivalent position.

Sources: Dealroom.com; Brighteye’s desk-based assessments 14

Just 3.2% of funding was secured by female-only teams, but mixed teams secured 26%

Portion of founding teams by gender Male Female Mixed

Global $5.76 B* $0.35 B $2.18 B
625 deals 84 deals 116 deals
100
Europe $1.30 B $0.04 B $0.37 B
185 deals 24 deals 34 deals
90 19.6%
26% Asia $1.32 B $0.03 B $1.24 B
168 deals 19 deals 34 deals
80
2.6%
N. America $2.50 B $0.25 B $0.50 B
70 4% 194 deals 33 deals 36 deals

60
In 2022, we saw limited movements towards a rebalancing of funding by
founding team gender. The portion of funding to female-only teams only
50
rose by 1.4%- from 2.6% to 4%- and the portion of funding secured by
mixed teams rose to 26% from 19.6% in 2021. While provisionally positive,
40
77.8% it’s important to observe that this is skewed by some of the largest deals
70% being secured by mixed teams, including Guild and Multiverse.
30

Last year, the ratio between female and male funding amounts in different
20
regions (excluding mixed teams) was: 1:27 in Europe; 1:57 in Asia and 1:36
10
in North America.* In 2022, the equivalent figure was 1:32 in Europe, 1:10
in North America (a marked improvement on last year), and the global
0
average was 1:16.
2021 2022
Male Female Mixed

*All figures rounded to nearest $0.01 B.

15
Sources: (1) Atomico’s State of European Technology 2021.
Part 2: Europe perspectives

Funding:
- Total Edtech VC funding 17
- European Edtech VC- 2017-2022 18
- Average deal size 19
- Breakdown of total funding by round size 20
- Breakdown of deals by round size 21
- Portion of global deals done in Europe 22
- Funding by user demographic 23

Key activity:
- Most active Edtech VCs 24
- Largest Edtech rounds 25
- Funding by market 26
- Spotlight on Italy 27
- Angel investor activity in Europe 29

Spotlight on founder genders:

- Spotlight on UK and France 31

16
European Edtech VC fell for the first time since 2014, but remained $1B+ more than 2020 levels

299
transactions

$2.6 B 256
transactions

$1.8 B
273
352 304
transactions
357 transactions transactions
323
283 transactions
transactions
237 transactions
$668 M $725 M $785 M
transactions
$309 M $452 M $520 M
$169 M
2014 2015 2016 2017 2018 2019 2020 2021 2022

European Edtech was the most resilient region in 2022 compared to 2021 levels in terms of funding levels. $1.8B represents 72% of the 2021 level, representing a
28% drop. While this was a significant drop from 2021, it was still $1B more than 2020 levels ($1.8B in 2022 compared to $0.79B in 2020).

The number of Edtech deals in Europe follows a similar trend to the global figures, having risen steadily between 2014 and 2017, before a steady fall between
2017 and 2020, rising again to 299 in 2021 but falling to 256 in 2022. In the current climate, this represents relatively strong resilience, particularly when
considering that 107 of the 256 deals were done H1 22, meaning 149 deals were done in H2 22.

It’s important to consider, however, the difference in funding we observe between H1 22 and H2 22- $1.4B of $1.8B was raised in H1 22, representing a
significantly slowing in activity, similar in scale to those we observe in other regions. Following the global trend, we expect activity in earlier stages to remain
strong, but growth stage deals to be less common and smaller than in the recent past, resulting ultimately in overall funding levels in 2023 falling somewhere
between 2020 and 2022.
Sources: Dealroom.co, consolidated by findings in Brighteye’s Edtech Funding Report 2020 and associated exclusions (growth, PE, grants, debt financing deals). 17
European Edtech VC over time from 2017-2022
~$500M+ per quarter

$1.0 BM
$1000

$800 M
Pandemic starts

$600 M

~$200-300M+ per quarter

$400 M

$200 M

$0 M
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022

$0-1 M $1-4 M $4-15 M $15-40 M $40-100 M $100-250 M $250 M+

Sources: Dealroom.co 18
Average deal size remained relatively resilient, at $7M in 2022 compared to $8.4M in 2021

299
transactions
256
$8.4 M transactions

$7.0 M

273
304 transactions
transactions

$2.9 M
$2.4 M

2014 2015 2016 2017 2018 2019 2020 2021 2022

Continuing with a focus on deal numbers, the number of European deals done in 2022 represented 87% of the 2021 total. As opposed to 2020-21 when deal
volume remained steady while funding volume increased, we saw the inverse trend in 2022 as deal volume remained constant but the size of deals dropped.
Indeed round sizes fell 17% on 2021 levels, from $8.4M to $7M. This trend was particularly acute in H2 2022 when average deal size dropped to $2.7M as growth
investors largely sat out the period.

That said, the 2022 average of $7M represents 2.4X the 2020 average. This is a near-identical multiple to the change in funding- $1.8B in 2022 represents 2.3X
growth on $0.79B in 2020.

Sources: Dealroom.co 19
European Edtech VC funding is increasingly dominated by larger rounds

The portion of total funding secured by companies raising the largest rounds
$0-1m $1-4m $4-15m $15-40m $40-100m $100m+ ($100M+) has increased significantly in recent years, carrying through to 2022.
100% In 2019, 0% of European Edtech funding was raised in rounds >$100M; this has
since evolved from 23% in 2020, to 27% in 2021 and 42% in 2022. This said,
90%
the number of mega rounds (those over $100M) has decreased since 2021,
23% 27% falling from 5 deals in 2021 to 3 in 2022.
80%
42% Interestingly, portions of funding raised in larger mid-sized rounds from $40-
100M have evolved erratically- for example, 24% of 2020 funding was raised in
70% rounds of this size, compared to 32% in 2021 and 17% in 2022.
24%
60% Looking towards the other end of the spectrum, we can observe trends
32% mentioned in other sections of the report- that the portion of funding raised in
50% 17% smaller rounds has risen. For example, 29% of funding was secured in rounds
9% <$15M in 2022, compared to 22% in 2021.
40%
13%
30% 27% 19%

20% 17%
12%
10% 14%
9% 10%
2
0% 1%

2017 2018 2019 2020 2021 2022

Sources: Dealroom.co 20
The sector is maturing, with an increasing portion of high-value deals, but this trend slowed in 2022

$0-1m $1-4m $4-15m $15-40m $40-100m $100m+ A signal of maturity in the sector is that despite challenging macro conditions in
2022, a higher portion of mid-sized and larger deals ($15M+) were secured in
100%
2%
1.4 1
2022 compared to 2020.
5% 3%
90%
14% 7% Comparing to 2021 and 2020, the reversal in deal trends are relatively clear- for
18% example, 51% of deals were in the $0-1M category in 2022 compared to 40%
80% 14% in 2021 and 30% of deals were in the $1-4M category in 2022 compared to
33% in 2021.
70%
26%
60%
30%
33%
50%

40%

30%
57%
51%
20% 40%

10%

0%

2017 2018 2019 2020 2021 2022

Sources: Dealroom.co 21
The portion of global Edtech deals done in Europe appears to be stabilising around 26%

Since 2019, the portion of global Edtech deals done in Europe has risen from
21% in 2019 to 31% in 2021 and 26% in 2022.
$0.73 B $2.5 B $1.8 B
Similar to our conclusion in 2021, we believe this highlights the increasing
50% health of the European ecosystem, across all round sizes and sub-industries as
well as investors’ growing realisation that enormously successful companies can
45% be spawned in the region and perceived international expansion barriers being
overcome successfully by increasing numbers of companies.
40%

35%

30%

25%

20%

15% 31%
26%
10% 21%

5%

0%
2019 2021 2022
Europe Rest of world

Sources: Dealroom.co 22
Breaking down VC investment by user demographic

Considering the breakdown of funding by user demographic we can observe

that Corporate Learning was once again the vertical that attracted the most
Edtech venture investment. Indeed, corporate learning was the only one of the
$1B five categories to increase in 2022 relative to 2021 levels. This was partially
$1000 M
$926M driven by some of the larger rounds being raised by companies in the
$900 M corporate learning space, including Mulitverse ($220M), Coachub ($200M) and
SoSafe ($73M). All other user verticals received less investment in 2022 than in
$800 M 2021, though the steepest drops are clearly visible in Pre-K and Lifelong and
Consumer learning.
$700 M $659 M $652 M
Companies focused on Pre-K received $18M in 2022 compared to $136M in
$600 M 2021. This represents a drop of 87%. A similar drop can be observed for
$544 M companies focused on providing Lifelong and Consumer Learning, falling from
$500 M $652M in 2021 to $162M in 2022, a fall of 75%.

$400 M In terms of the relative investment in each group, companies with Corporate
Learning users received 51% of overall investment, while Pre-K represented
$300 M $289 M <1%*.
$241 M

$200 M $162 M
$136 M
$100 M
$18 M
$0 M
Pre-K K-12 Higher Corporate Lifelong and
Education learning consumer
learning

Sources: Dealroom.co; *Minimised double-counting across groups, though total funding in this chart reflects $2B, higher than the $1.8B seen in Europe.. 23
2022 appeared to be a year for the Edtech specialists

8
7

5 5
4 4 4 4 4
3 3

For the third year running, Brighteye Ventures was the most active investor in European Edtech with 9 new deals in 2022.

6 of the top 10 investors were Edtech specialists, providing a point of similarity with the global figures outlined earlier in this report.

The number of investments made by the top 10 is down on the number done in 2022. The top 10 secured 64 new investments in 2021 compared to 52 new
investments in 2022. 29 of the 51 deals were done by Edtech specialists.

The set of active investors, as reflected in the macro figures, tend to be focused on early-stage deals.

Sources: Pitchbook.com 24
In 2022, 3 companies raised more than $200M, but there was a sharp drop to other deals in the top 10
IPO & M&A transactions excluded

Company HQ Cluster Recent raise Investors* Valuation*

Austria 🇦🇹 Tutoring $340M DN Capital, DST Global,
Tencent, Coatue $3.5B
UK 🇬🇧 Vocational training $220M Lightspeed Venture Partners
Index Ventures, GV $1.7B
Germany 🇩🇪 Coaching and mentoring $200M Molten Ventures, HV Capital,
Partech, RTP Global $600M
Germany 🇩🇪 Cybersecurity training $73M Global Founders Capital, Highland Europe, La
Famiglia< Acton Capital $350M
UK 🇬🇧 Cybersecurity training $66M Insight Partners, Goldman Sachs
Citi Ventures, Menlo Ventures $375M
Spain 🇪🇸 Media education $64M CDTI, Swanlaab Venture, Factory $320M
UK 🇬🇧 Interactive textbooks $50M The Raine Group, Johan Brand, Jamie Booker, Evli
Growth Partners $250M
Denmark 🇩🇰 AR/VR $47M Sofina, GGV, Owl Ventures, Andreeseen Horowitz $300M
Sweden 🇸🇪 Enterprise software $34M Menlo Ventures, EQT Ventures $180M
France 🇫🇷 Learning platform $30M MAIF Avenir, IMPACT Partners, Connected Capital $160M

In 2020, 2 deals exceeded $50M, in 2021, 11 rounds exceeded $50M and in 2022, 7 deals exceeded $50M.

As in 2021, GoStudent secured the largest deal of the year with $340M raised to further fund acquisitions and international expansion.

Most of these deals took place in H1 22.

Estimated valuations in this set of 2022 deals tend to be between 9X the size of the round, reflecting lower dilution per round than observed in 2021 (6-8X).

Deals tend to be spread across a number of verticals, suggesting that the ecosystem is maturing, with significant players spread across the Edtech sector.

*No reliable data source for effective comparison. Valuation at time of deal based on Dealroom methodology where not publicly available. Some but not all investors are included.
Sources: Pitchbook.com; Dealroom.co 25
British, German and Austrian Edtechs received over $300M but a gap opens to other European
companies

2020 2021 2022

Market Funding Market Funding Market Funding
1 UK 🇬🇧 $164 M 1 UK 🇬🇧 $609 M 1 UK 🇬🇧 $583 M
49 Deals 87 Deals 81 Deals

2 France 🇫🇷 $97 M 2 France 🇫🇷 $487 M 2 Germany 🇩🇪 $363 M

23 Deals 29 Deals 34 Deals

3 Poland 🇵🇱 $86 M 3 Austria 🇦🇹 $301 M 3 Austria 🇦🇹 $346 M

5 Deals 7 Deals 7 Deals

4 Germany 🇩🇪 $67 M 4 Germany 🇩🇪 $297 M 4 France 🇫🇷 $93 M

23 Deals 35 Deals 19 Deals

5 Netherlands 🇳🇱 $31 M 5 Denmark 🇩🇰 $144 M 5 Spain 🇪🇸 $86 M

12 Deals 8 Deals 24 Deals

The UK retained top spot in 2022 in terms of both funding and deal numbers- though the funding total of $583M in 2022 is down slightly on the $609M of 2021,
it’s still more than 3.5X the levels observed in 2020 ($164M). UK startups secured more than twice as many deals as the second-placed market. Germany leapt to
second in terms of both funding and deals, with German startups securing $363M across 34 deals. The gap between Germany in second and Austria In third,
again driven largely by GoStudent’s activity, stands at only $17M.

However, the market with the most significant drop in funding and deal activity is France; French startups raised $93M across 19 deals. This reflects an 81% drop
in funding in 2022 compared to 2021.

Spain occupies the final place in the top 5 for the first time in 5 years, with $86M across 24 deals secured. An honourable mention must go to Italy, as the only
market to see funding and deal numbers increase in an unarguably challenging year. We take a look at this ecosystem on the following slide.

Sources: Dealroom.co 26
Italy was one of few European markets to see increases in total investment and deal number (1/2)

$0-1 M $1-4 M $4-15 M $15-40 M $40-100 M $100-250 M $250 M+

$70 M 11
transactions 17
$60 M transactions

$50 M

$40 M
15
$30 M transactions
$44 M 15
$20 M transactions
7 10
$10 M
transactions transactions
$M
2017 2018 2019 2020 2021 2022

Italy’s tech ecosystem has been gradually on the rise, building momentum relatively consistently since 2010. It is promising that the funding secured in the market
has been spread across a range of sectors, with some of the largest rounds being raised for companies in fintech, healthtech and real estate verticals. You can
observe changes in pan-sector funding on the next slide.

Considering Edtech, the market has been on a steep upwards trend since 2020, including 2022, during which Italy was of only few markets in Europe to witness a
rise in Edtech funding and deals. Though Italy’s record Edtech year was 2019, largely driven by a single large round for Talent Garden, what’s most promising is
that the 2022 funding increases have been driven by smaller, early-stage rounds in the <$15M range. This bodes well for the future of the Italian Edtech
ecosystem. You can read more about the Italian Edtech ecosystem in this article by Dealroom and Edtech Italia.

The lion’s share of credit credit for this must go of course to the fantastic Italian entrepreneurs seeking to improve and find solutions that help people to achieve
better learning outcomes, but some should be reserved for Edtech Italia, the Italian government ministries and the community of founders, investors and
community operators they are building.
27
Italian Edtech trends reflect wider rising tide of tech investment in Italy (2/2)

$0-1 M $1-4 M $4-15 M $15-40 M $40-100 M $100-250 M $250 M+

$1.8 B
$1.6 B
$1.4 B
$1.2 B
$1.0 B
$0.8 B
$0.6 B
$0.4 B
$0.2 B
$0.0 B
2017 2018 2019 2020 2021 2022

Largest Italian Edtech

HQ Cluster Recent raise Date Investors*
deals on record
Milan Tutoring $47.5M March, 2019 Social Xapital, Tamburi Investment Partners,
Indaco SGR

September,
Milan Vocational training $13.4M 2022
CDP Venture Capital, BPER Banca

Rome Coaching and mentoring $10.1M March, 2022 Cannavale

Milan Cybersecurity training $8.3M July, 2022 CDP Venture Capital

Milan Cybersecurity training $6.9M August, 2022 P101 Ventures, TIM Ventures, CDP Venture
Capital

28
Breakdown of angel involvement in deals by regional market

70

60 68
50 58
40 45
30

20

10 18
0
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Europe US Asia RoW

Angel activity in European Edtech has risen sharply since 2020 and now is the region with the highest number of angel involvements. Interestingly Europe and the
‘Rest of World’ category are the two regions to have seen an increase in angel involvements in 2022 compared to 2021.

There is a general trend in increasing angel involvements in funding rounds- indeed 24% of deals done in 2022 featured an angel investor, compared to 13% in
2021 and 8% in 2020.

2017 2018 2019 2020 2021 2022

Portion of Edtech
deals done in which 10% 6% 7% 8% 13% 24%
angels have been
involved

Sources: Dealroom.co; Important to consider reporting lag in angel rounds, given it’s early-stage and typically not announced as well as our awareness being strongest in Europe 29
European markets by number of Edtech deals with active angels, 2017-2022

20
18
16
19
14
17
12
10
8
6
4 6
2
0 2 2
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

UK Germany France Sweden Denmark

The European market with the highest levels of angel investor involvement in the past two years has been Germany, followed by the UK. These two markets have
3X the number angel involvements to France, the third-placed market.

Interestingly, despite quiet years in other senses (Sana aside), Sweden and Denmark make up the top 5.

Given the evolving and depending European Edtech scene, we can expect increasing angel involvement in years to come, as founders become active angel
investors, particularly in their home markets. It’s worth mentioning that Edtech remains an ‘impact’ sector, attracting generalist, non-Edtech-focused, angels.

Sources: Dealroom.co; important to consider reporting lag in angel rounds, given it’s early-stage and typically not announced 30
🇬🇧UK: overview of capital raised and deal activity by founder gender composition 2017-2022

Share of capital raised by founder gender composition Share of deal activity by founder gender composition
100%
88% 100%
90%
90%
80%
77% 76%
69% 80% 73%
67% 71% 69%
70% 68%
70%
60%
60% 60%
48% 49%
50% 50%
49% 48%
40% 40%

30%
30% 21%
33% 16% 17%
28% 20% 14% 14% 13%
20% 26%
10% 14% 15%
10% 11% 9% 11% 11%
0%
8% 8%
0% 4% 5% 6%
3% 3% 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022 Female Male Mixed
Female Male Mixed

In 2022, we saw the continuation of a recent trend in UK Edtech VC towards a decreasing portion of funding going to male-only founding teams and a rise in the
portion going towards mixed founding teams. Now that the portions are more or less level, on 49% and 48%, if this trend continues we can expect to see mixed
teams raising more than male-only teams for the first time in 2023. While this is positive, the portion of funding secured by female-only teams has remained at
2021 levels, sitting at 3%.

It’s a different story when looking at the make-up of these deals by numbers secured. In 2022, we observe a rise in the portion of deals raised by male-only teams,
a fall in deals secured by mixed teams and maintenance in the portion of deals secured by female-only teams.

Sources: Dealroom.co 31
🇫🇷France: overview of capital raised and deal activity by founder gender composition 2017-2022

Share of capital raised by founder gender composition Share of deal activity by founder gender composition
100%
90% 90% 100%
90%
90%
80% 76% 75% 81%
72% 80% 76%
69%
70% 70%
70% 67%
64%
60%
60% 54%
50%
50%
40%
30% 40%
27% 32%
30% 24% 29%
19% 30%
20% 21% 20%
20%
7% 6% 8% 12% 13%
10%
1% 1% 2% 1% 10% 16%
13% 14%
0% 12%
3% 6%
0%
2017 2018 2019 2020 2021 2022 1%
2017 2018 2019 2020 2021 2022
Female Male Mixed
Female Male Mixed

In the previous 5 years, France has been the co-leading Edtech nation by funding and deal number. Despite a slower year in 2022, we have continued to monitor
and compare the funding environments for founding teams by gender in France and the UK. In 2022, gender breakdowns of Edtech deals in France continued
their trend of being erratic. Looking at male-only founding teams, the portion of funding secured fell from 90% to 75% in 2022. This is positive, however the
portion of funding secured by female-only teams also fell, from an already startling 2% to 1% (having rounded up from 0.5%...). By process of elimination, you’ll
know that this means that the portion of funding raised by mixed teams rose, tripling from 8% in 2021 to 24% in 2022. Considering the split by deal activity,
convergence observed in previous years switched to divergence between 2021 and 2022. Indeed, the share of deals secured by male-only teams rose from 54%
to 70%, mixed teams secured 29% of deals compared to 32% in 2021 and the portion secured by female-only teams fell drastically from 14% to 1%. This is an
alarming trend, one that we hope reverses in 2023.

It’s worth noting that funding and deal activity in France saw significant slowing in 2022, more than most European markets. This is not a trend we expect to
persist in 2023, particularly given the presence of Edtech-focused funds with significant interests in France and dry powder poised for deployment.

Sources: Dealroom.co 32
Part 3: What’s next

2022 in review
- Reviewing our 2021 predictions 34

Predictions for 2023

- New predictions for the year ahead 36

Up next on our research agenda

- How to raise a Series A 38

33
Reviewing our 2021 predictions for European Edtech – 1/2

1. Community, community, community: RATING: 5/5

We predicted that >15 companies focused on professional networks would raise pre-seed or seed funding. We saw a number of these
professional networks and companies making community plays as a central part of their offers receive funding over the year, some
examples include Nova, a network for top talent to connect, and Junto which enables access to a network of peers to discuss challenges
with and live trainings from leaders in respective fields.

2. The rise of early-stage talent marketplaces: RATING: 4.5/5

We predicted that at least a dozen new early-stage talent marketplaces, that combine training and placement services to address the
demand for skilled talent, would be funded in Europe in 2022. Over the year we saw a number of these marketplaces emerge and receive
funding, such as CareerFoundry who raised $5.3m in new funding for their tech training platform and Encode Club who raised $5m for their
Web3 developer training platform.

3. Proliferation of voice technology: RATING: 2.5/5

We predicted that the application of voice user interfaces to education technology products would increase in marked and interesting
ways, and as a result that we would see an increased number of companies in Europe leveraging these improvements to drive enhanced
experiences. We saw some interesting applications of voice recognition technology gain recognition, such as Readmio, who received
€1.1m seed funding for their app which brings fairytales to life with sounds and music triggered by voice. Though there was limited activity
in this area, we expect the trend to deepen in the coming years.

Source: Brighteye’s Edtech Funding Report 2020 (for all predictions) 34

Reviewing our 2021 predictions for European Edtech – 2/2

4. Web3 “Earn to learn”: RATING: 1.5/5

We predicted that at least 5 European companies that leverage the ‘earn to learn’ model would be funded at pre-seed/seed stage in
Europe in 2022. However, the number of startups utilising this model that received funding was less than expected, likely due to a turbulent
year for the Web3 industry. There was, however, a continued growth of startups in the Edtech Web3 space, such as Neol, who empower
participants to learn and build simultaneously, whilst solving complex challenges for organisations.

5. Increasing adoption of robotics: RATING: 1/5

We predicted that the trend of investment into robotics would begin to mature. The European market did not mature as much as expected,
likely due to a slowdown in venture activity and investor preference for companies able to prove routes to monetisation rather than purely
innovative plays. Elias Robot, an AI powered robot which helps children learn foreign languages, did provide one example of a company
securing funding in this space and we expect to see further applications of robotics emerge over the next year.

Source: Brighteye’s Edtech Funding Report 2020 (for all predictions) 35

Our predictions for European Edtech in 2023 (1/2)

1. Climate education heating up

Climate change is arguably humanity’s biggest challenge. There is pressure to develop solutions that decarbonize sectors. Awareness is
increasing and big commitments have been made by business and governments. We believe that education plays an important role in this
much-needed transformation, including adjusting our behaviours. In 2023, we will see the emergence of a new crop of green entrepreneurs
that will address this challenge from different starting points (e.g., awareness creation in classrooms, training platforms for specific sectors in
need of green skills, upskilling/reskilling the workforce to transition into a greener economy, a new wave of higher education providers
focused on sustainability etc.). We expect to see 5+ companies in Europe raising pre-seed and seed rounds in 2023.

2. Rise of European multinational K-12 infrastructure software companies

COVID accelerated the adoption of technology inside K-12 schools across Europe. Prior to 2020, half of elementary school teachers in
Germany did not have a school email address). Broader digital adoption was spurred by additional funding from EU and national education
policies, which, in turn, enabled the growth of Edtech infrastructure software companies helping schools to streamline and automate
everything from parent-teacher-student communication (Sdui, Klassroom) to classroom single sign on/app discovery (Wonde) to teacher
placement (ZenEducate). We predict continued funding, consolidation and expansion for this segment in 2023- concretely, $50M of
funding raised by companies in this space and 5+ trans-national acquisitions.

3. A Year of Heated Deb’AI'te

Chat GPT will upend the education sector and create an arms race for technologies to prevent and manage plagiarism. In addition,
debates will rage about the definition of plagiarism in the wider world of media, publishing and entertainment, and especially education. A
new path will need to be forged, which incorporates AI into work streams. 2023 will be a year of debate and soul searching, where the
school and workplace will have to decide what AI is allowed to help with and what it isn’t. For instance, is it ethical or acceptable to use a
tool like Chat GPT to create an essay outline, which can then be further researched and fleshed out by the student? Why not? Is it
plagiarism if the tool is only used to spark imagination and spur creativity in arts, literature, science and business? At least one killer app in
education powered by AI tools like ChatGPT, either to counterbalance or utilise its strengths, will receive outsized funding from prominent
VCs and reach a valuation in the hundreds of millions.

36
Our predictions for European Edtech in 2023 (2/2)

4. Apprenticeships and other HE alternatives give traditional providers a headache

The traditional higher education system is at a turning point. Most traditional players (i.e. universities) are struggling to prepare their
students to be “work-ready”- there is an evolving disconnect between education providers and the labour market. For this reason, we
predict that the apprenticeship model and similar programmes of joint education and training will continue rising in popularity as they offer
many benefits to students/employees/employers that simply can’t be achieved via traditional university programmes. We expect
governments across Europe to continue looking closely at these routes in 2023 and beyond (considering new formats, sectors and
demographics). This year, we believe that €15m-30m will be invested in European players that are innovating in the exciting space.
(Please note, this funding range excludes any potential future rounds raised by Multiverse, which pioneered the Edtech side of this space).

5. More M&A as Edtech market consolidates

With rising interest rates and a cooling startup market, we expect fewer new Edtech startups and more companies consolidating through
M&A in 2023. Many startups that didn’t raise in 2022 will have to raise a new round in the second half of this year when VC money,
especially for growth rounds, will still be tight. While we might see a few publicly listed companies taken private, others (think Duolingo), as
well as some well-funded startups (think Guild or Multiverse), will be in a prime position to acquire those struggling to raise. We expect at
least 3+ takeovers in the hundreds of millions.

37
Next up on our published research agenda:

Forming and
managing your board

Expected mid-February

38
With thanks to the Dealroom team for their support in the creation of this report.

Introducing the home for Edtech:

edtech.dealroom.co

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Appendix

Comparing Europe with the US & Canada

- Comparing macro figures on total 41
funding, number of deals and average
deal size
- Comparing VC funding in Pre-K, K-12 42
and Higher Education

40
Comparing macro figures on total funding, number of deals and average deal size

Funding in 2021 and 2022 Funding 2019-2022 ($B)

$9.3 B 2019 2020 2021 2022

Europe $0.73 B $0.79 B $2.5 B $1.8 B
US & Canada $3.0 B $3.3 B $9.3 B $3.5 B

Number of deals 2019-2022

2019 2020 2021 2022

Europe 304 273 299 256

$3.5 B
US & Canada 535 470 355 347

$2.5 B Average deal size 2019-2022

$1.8 B
2019 2020 2021 2022
Europe $2.4 M $2.9 M $8.4 M $6.0 M
US & Canada $5.6 M $7.0 M $26.2 M $10.1 M

Europe US & Canada

The slowdowns in European Edtech compared to US Edtech are clearly markedly different. As highlighted elsewhere, European Edtech VC fell 28% between 2021
and 2022 and by 64% in the US & Canada. Looking at the number of deals, we see similar trends, with the number of deals falling but not significantly. The
number of deals done in Europe fell by 14%, while the number of deals done in the US & Canada only fell by 2%.

Sources: Dealroom.co 41
Comparing VC funding in Pre-K, K-12 and Higher Education between Europe and the US & Canada

Europe US & Canada

$3.3 B
$811 M

$623 M
$2.1 B
$508 M

$1.1 B $1.2 B
$217 M

B2C B2B B2C B2B

2021 2022

Total VC funding for Pre-K, K-12 and Higher Education in Europe totaled $0.73B in 2022, compared to $2.3B in USA & Canada. Interestingly, the levels of funding
channels to B2C and B2B companies in these categories was almost identical in the US & Canada, unlike in 2021 when funding to B2B companies was 64% of the
funding secured by B2C companies. This observation cannot be drawn for Europe, where funding secured by B2C companies was more than twice as much as
B2B businesses in 2022, reflecting a widening of the gap observed in 2021.

Sources: Dealroom.co 42