Overview of EdTech in France through the analysis of 180 startups

Copyright: CBInsight for the original picture

This article provides an overview of the French EdTech market through the analysis of 180 French EdTech startups. 🇫🇷 French version of the study here 🇫🇷


“How is France doing with EdTech?”

Through different projects in partnership with Edtech World Tourand Learn Assembly, I started working on mapping the EdTech protagonists involved in France. The idea is to have an overview of innovation in education, being myself co-founder of AppScho, a Google-sponsored EdTech start-up in Higher Education, and president of ed21, an organization promoting innovation in this field.

Combining different mappings, I managed to develop a consolidated list of 180 start-ups focused on education. On this basis and through the analysis of several graphs and statistics, I established a representative portrait of the current state of the French market.
 
 The results presented in this article show that the French EdTech market is dynamic, innovative and attractive, but still underfunded.

If you wish to add a start-up to the mapping (list at the end of this article), use this form!


Methodology

All graphs shown below are the result of the mapping of 180 French EdTech startups, with the following criteria and related sources:

  • Company creation date: LinkedIn, Societe.com. The company must be based either in France or Monaco.
  • Fundraising and Exits: Crunchbase, WhoGotFunded, specialized press, startup’s website
  • Segment: list of segments defined by EdTech Global & Ibis Capital in their report “2016 EdTech Trends”.
  • Format & Business Model: startup’s website. When the format is multi-device(web/mobile), will be taken into account the original format of the solution (ex: will be “web” any web-based tool for which a further mobile access is developed).
  • Number of employees: LinkedIn (total / aggregate payroll (displayed), not startup employees registered and listed on LinkedIn).

For readability, some graphs show results limited to 5 or 10 years.

A rather balanced segmentation of projects

Explanation of segments:

  • Corporate Training : Companies & employees
  • Higher Education: Institutions of higher education and their graduated students going into the Bachelor, Master, PhD cursus. Higher education institutions which graduated students fit in the LMD course (European Education System, equivalent to Bachelor, Master and PhD)
  • K12: Primary and secondary education
  • Pre-K12: Children, parents and placement facilities hosting structures before nursery school
  • Language Training: language learning
  • Vocational Training: learning, language excluded (ex: development of memory, sport activities)
  • Orientation: Segment I have added, representing startups that belong to the field of advice on orientation, scholar / professional career choice.

This first graph highlights only one trend : K12 leads the way.

K12, seriously lacking some B2B innovation

The split of these projects into segments and models, shows the existence of a strong polarization.

Corporate (92%) and Higher Education (86%) are way more represented in B2B, to the extent that these segments are better at providing interlocutors for startups. This allows them to reach a critical mass of users with a relatively low number of clients.

— In K12, the break-up of targets and the fact that they are almost entirely public in France lead participants to shift towards B2C (65%).

Vocational and Language Trainings are individual practices of self-improvement, and are therefore logically targeted as a priority on B2C models (89% and 92% respectively).

No mobile revolution in French EdTech (yet?)

Note: This graph shows startups created since 2005 (157)

There has been a significant increase in the creation of EdTech projects for the past 5 years. The curve showing superior creation of web-based startups (in orange) can be explained by various factors. Here are a few of them:

  • In corporate environment, people work more often on computers (usually provided by the company) than on mobile devices (hardly ever provided by the company). Thus, it seems natural to place greater importance on web platforms rather than mobile platforms and favor the first one in priority
  • In the school environment, more institutions have computer rooms rather than mobile devices available for their students
  • In order to respect equal opportunity, a BYOD (Bring Your Own Device) approach and proposing mobile only tools seems complicated, especially in the K12 and its young audience
  • Moreover, the trend regarding the development of physical products seems to remain quite low, although success stories such as Wisembly’s or Klaxoon’s prove the viability of this format.

Either way, French EdTech entrepreneurs seem to rather work on the web platform even if it means developing a mobile version later — the other way around being less obvious.

Models analysis confirms the domination of web-based solutions

The almost equal distribution of B2B/B2C projects shows that pupils, students, and employees (B2C) are as much targeted by start-ups as their institutions/employers (B2B)

Only 17% of projects are mobile-first, for reasons that have been explained in the previous paragraph

— In my opinion, the very low score of physical products reveals an opportunity that some startups have already begun to seize, especially on the Pre-K12 boxes segment (ex: Chouette Box €300k seed & Pandacraft €1M seed, respectively Q2 and Q3 2015)

B2C startups seem popular

As this graph shows only a few start-ups, I can only develop hypothesis in the following paragraph. In my opinion, here are the reasons explaining the lower tendency of B2B as compared to B2C:

— The emergence of champions (CoorpAcademy, 360Learning) in the Corporate Learning sector can dissuade even the most aspiring entrepreneurs to engage in this field, despite of the size of the market. As pointed out by Antoine Amiel from Learn Assembly in our recent interview, the French learning market is very specific and regulated, which represents at the same time a big potential and drag since the market remains domestic and French speaking, reducing its size.

— In Higher Education, institutions are only now beginning to send positive signals in terms of innovation, by deploying digital transformation strategies. The known to be long decision cycles, and the difficulty in unlocking appropriate budgets (previously inexistent for the digital field) are diminishing. It is safe to say that under these circumstances the creation curve of B2B startups should increase.

— For K12, signing a contract with an institution (and all related actors: academies, boards of education, regions, ministries) is close to impossible, especially when a small company is concerned. This field also suffers from long decision cycles, hard to maintain for young projects with scarce funding.

Up to 63% of EdTech startups have less than 10 employees

The two graphs above show the number of startups depending on the number of employees they hire, according to their main market segment (ex : [5;10] means that the startup has between 5 and 10 employees).

Example: a company like CoorpAcademy works as a B2B, but with a B2C model available to the general public.

It is agreed that the size of the startup is referred to as a relatively relevant indicator for measuring its maturity, especially from the segment [20;50], where company employment costs become too important to continue on a bootstrap format.

I have extracted two graphs to analyze results in B2B and B2C:

Observation n°1: 40% of Corporate startups have more than 20 employees, versus only 16% in Higher Education

Observation n°2: Higher Education startups struggle to grow

A few hints to explain these observations:

  • Is a deal in Higher Education harder to secure than a Corporate one?
  • Does a Corporate allocate more budgets to digital and educational topics, compared to an institution of higher learning?
  • Is the quality of start-ups in higher education more mature than in Corporate?
  • Is finding its market-fit easier in the Corporate field? Do employees express more their needs than students?

Observation n°1: K12 startups grow slightly more than Pre-K12 startups

Observation n°2: No champion clearly identified in these two segments

A few hints to explain these observations:

  • Is the containment of users and clients harder in K12 and Pre-K12?
  • Is the State a drag in start-ups development in K12? Even though it represents almost the whole market and that it should reach a critical mass of users very quickly
  • Is the presence of a prescriber on these two segments (the parent) misdirected by start-ups?

An underfunded French EdTech market

Source: list at the end of the paragraph (2016 YTD)

While looking at the total dealflow of startups in education, it appears that among the 180 analyzed start-ups, 19% (35) of them have raised funds. Though this may seem important, it should be noted that my mapping is not complete. Especially as I could more easily identify startups that raised funds since they were more visible on the market.

The French EdTech market is merely estimated around 300–350 startups, which brings the ratio of startups that raise funds at 10%. This data, plus the average size of startups (cf. previous graphs) show that the latter struggle to attain a critical size in France.

One of the main reasons is the absence of investment funds dedicated to education. “Classical” funds do not necessarily grasp the issues and specificities at stake (ex: longer decision cycles, important valorisation of clients portfolio as global education rankings remain significantly followed in France, specific business models, and business problems relative to the sector). These special features are the reason why, in education more than in any other field, startups need investments to grow (ex: important sales force required to reach the institutions spread over the territory or slower traction to achieve).

Hereafter the list of identified fundraisings (€M) in France in education sector since 2012 with the links of press releases or announcements related. Do not hesitate to indicate me any omission so that I can update this article:

French EdTech dealflow compared with the US

Source: EdSurge for the US deals (2016 YTD)

The difference strikes as soon as we put the two dealflows in perspective.

Obviously French and American markets are not comparable, particularly in education. Nonetheless, despite the fact that the US has ‘only’ 4.5 times more students than France (70M vs 15M), there was 49 times more deals in the EdTechs on the other side of the Atlantic in 2015.

Several venture capital funds dedicated to education already exist there, whether they are funds established with a vertical education (Spark Capital, Kaport, Accel, GSV), or newly launched dedicated funds (Learn Capital, Reach Capital, ReThink Education).

The last Ibis Capital report contains an insight of all the VCs that have invested in education under the heading ‘Selective Financial Investor Landscape’. While this graph contains 75 VCs… only 3 of them are French (Kima Ventures, Partech Ventures, Iris Capital). And not a single French appears in the other list of 40 Super Angel/Incubator.


“What do EdTech entrepreneurs need to grow?” (French Touch de l’Éducation, Lecture 2015)

Conclusion & Development axes

Nowadays, the education sector might be the last one that has not yet fully begun its digital revolution, although it’s one of the most important sectors on an international scale ($5,4T spent worldwide in 2015, with an 8% CAGR by 2020). The finance industry is also renowned to be conservative, yet it is already in the process of change, as shown by the fantastic rush of FinTechs, the Financial Times is even launching FinTech Awards.

Still, the French market is sending very positive signs: more and more projects are created every year (see previous graphs), new initiatives are launched (creation of Master EdTech by the CRI, development of réseau Pépite), private and public investments are increasing (l’Etudiant and La Caisse des Dépôts for example), and more and more institutions of Higher Education now hav eDigital teams and CDO (the ESC Rennes with Pierre-Paul Cavalié, Grenoble EM, ESC La Rochelle, or the Paris Science Lettre group).

We can also mention one of the first French success stories such as CrossKnowledge (exit $175M in 2014), the recent BNP Paribas investment in Evancia ($32M), or the substantial growth of protagonists like DigiSchool or 360Learning. Additional evidence, if any needed, France was even hosting a panel during EdTech Global in June!

What can we do to support this growth and help the French EdTech market to expand? My main recommandations, shared by actors of education:

— The first recommandation will necessarily be capitalistic. As noted by Marie-Christine Levet in an interview for EducPros (FR version): “innovation will come from pure players, not traditional editors”, therefore the creation of specialized investment funds should allow to sustain the growth of startups in this sector. Significant progress is about to be achieved through the creation of EduCapital, a French investment fund specialized in education and training, with a €60M closing that should happen by the end of the year 2016, and the creation of ed21 Angels, a Business Angel network in education supported by our association.

— The second recommandation is based on international openness and collaboration for all stakeholders in the value chain. This point was stated by Antoine Amiel in one of his articles (FR) and further developed in his intervention at EdTech Global last June, this approach should allow to draw inspiration from the projects developed by institutions and Corporate overseas in order to replicate them in France and bring innovative projects, structures or schemes on our territory. As well as a gain in time, it is also the opportunity to learn the best practices from our neighbors in terms of innovation in education.

— The third recommandation is structural and aims at creating a French EdTech ecosystem to encourage the growth of projects. With ed21, we have recently launched a startup acceleration program for Schoolab’s EdTech startups, but that kind of initiative has to spread in France via the creation of dedicated structures. Besides, this is one of the key recommendations from Edtech World Tour in their report published in July. Let’s take an example from overseas, the English EdTech accelerator Emerge Education has developed partnerships with many Universities, allowing them to have access to projects for their institutions, and for startups to test their solution in the field. Today, the only event identified in French EdTechs is the yearly conference “French Touch de l’Éducation”, organised by Learn Assembly.

— The last approach is organisational. The main recommendation from the CNNum report on the Higher Education (FR), given in May, pushes for the creation of a digital transformation strategy within institutions. To support these changes, they must establish both dedicated budgets and internal project managers. Also, in order to insure efficient innovation they must create dedicated contacts (CDO, Innovation VPs, internal Digital Teams). At AppScho, we have developed a mobile technology that can be deployed in a near-autonomous way in 5 weeks only, but we regularly work with IT Departments or Deans that cannot afford digital transformation by themselves in their institution.s, despite their good will to innovate in the digital field.

The analyses in this article are personal, but do not hesitate discussing this issue in the comments section or via victor@appscho.com.

Many thanks to Alexandre Tang ♣️♠️ and Polina Grigorieva Verdier 🇷🇺 🇫🇷 for their amazing help in the translation of my original study.


List of analyzed startups

Your startup is not referenced in my mapping? You can fill this short form and I will update the list and graphs.

360Learning, 3W Academy, 4N Media, Abilways, Academyk, Albert Learning, Alumnforce, Altimens, AppScho (us !), Apprendre Ensemble, Atout-on-line, Authot, Ayni, Bankexam, Beebac, Beedeez, Beneylu, BloomR, Campus Channel, Chalk board, Domoscio, Chouette box, CoCertify, Cogiflex, CoorpAcademy, Costud, Coureo, Cyberlibris, Déclic et des Trucs, Digischool, Diploméo, Kokoroe, Doxacours, Edoki Academy, Educadis, Educlever, Eduklab, Edumédia Sciences, Edunao, Edupad, Edumoov, Eduvoices, Egg-One School, Economics Games, Enaco, English Attack!, Epopia, Eurateach, Formaeva, French Today, Gayatech, Geezot, Global exam, Gutemberg technologies, Gymglish, Happy Blue Fish, Henoïda, HigherEdMe, HibiKids, Huh? School, Human coders, Impala, Isograd, iTop Education, Kartable, Klaxoon Campus, Kidizz, Klassroom, Koa Koa, Koober, Kosmos, Kwyk, La manufacture, Lalilo, Le livre scolaire, Le wagon, LearnAssembly, Learnybox, Leka, Les bons profs, Let’s Share, Lingueo, Libcast, Lingocracy, MaDeuxièmeÉcole, Manzalab, Magic makers, Make U Learn, Manzalab, Maskott, Marbotic, Maxicours, MeshUp, MoocIT, Mon Buddy, MonMentor, Mrod-Mines des Savoirs, My Blee, My Future, Neodemia, La maternelle des prénoms, Live Mentor, Navadra, Neoptec, Nextmodernity, New School, Ninchanese, Nomad Education, O’Clock, Omnilive, OpenClassroom, Orienta, OuiKnow, PandaCraft, Parentsdanslesparages, Peetch, Pearltree Education, Pili pop, Pipplet, Pistache, PostClass, Powowbox, Prof express, Pythagora, Quelle Histoire, Smart Pilots, SchoolMouv, Serious Factory, Sign360, Smart Pap, Shapter, Scoledge, Solunea, Study quizz, Speaken, Speaking agency, Speecheo, Storyplayr, Magency, Studizen, Super Julie, Super prof, Tabuléo, Teach on Mars, Teen Code, TechKidsAcademy, TestWe, The MOOC Agency, The Studnet, The School Project, Tipotop, Tocosk, Tralalère, Tuto.com, Ubicast, Unisphere, Unow, Upgraduate, Variable, We are 07, Waza Education, Wearelearning, Windie, Wisembly, Woonoz, Wordzit, Yes’N’You, Your Lecturer.