Latest trends in Edtech and their fundraising
Focus on the evolution of education and their VC investments
Hello everyone !
To continue this series on the trendiest sectors of startups, we’ll analyse Edtech today ! 🎓
Edtechs concern all startups related to education and learning. More specifically, they have several objectives : to modernize learning methods, to strengthen the link between the student/teacher or to respond to concerns about academic and/or professional orientation.
The main challenge is to democratize access to education and training by reducing costs. And to accelerate their development, EdTech rely on state-of-the-art technologies : Machine learning, AI, natural language, voice processing, everything is there. 🤖
The Market
Edtechs represent 3% of the world education market. In 2019, their market was valued at $76.4 billion and is expected to reach $89.1 billion by the end of 2020. Moreover, this market is expected to grow at a CAGR of 18.1% from 2020 to 2027 to reach $285.2 billion in 2027. 💰
In terms of their targets, they are made up of students or employees in different age groups : from 0 to 3 years old, from kindergarten to high school (K-12), as well as students and adults who wish to train. The target is thus extremely large, all the more so as the applications/courses can be consulted from anywhere in the world. Once the product is completed, the startup can scale (i.e. growth) and internationalize at high speed on other continents. This is what led to the increase in market size seen above !
Guess who benefited from it ? 🕵️
The answer right here 👇
VC’s interest
Globally, all funds (VC, PE and others) have invested more than $10 billion between 2013 and 2017. HolonIQ has published a report showing that global venture capital funding in the education sector reached $7 billion in 2019 of which more than 2/3 in the US and China. Even better : it predicts a tripling of Edtech investments over the next 10 years. 📈
According to EdSurge, US VCs have worked a lot 🇺🇸 :
- 28 B.A./Seed deals for a cumulative amount of 71 million dollars ;
- 34 Series A deals for a cumulative amount of $264 million ;
- 7 Series B for a cumulative amount of $140 million ;
-16 Series C for a cumulative amount of $919 million.
Series C represents the majority, accounting for 66% of total investments. The future will tend in this direction as the frequency of investment continues to grow at a steady pace (+ 20% per year).
As for Europe, 1 billion was invested in 2019. As usual, a little behind schedule. We can console ourselves with the growth, because it is in Europe that it is the largest : +36% compared to 2018. 🇪🇺
Enough about figures, let’s look together at the startups that will revolutionize education ! Learning curve mode activated ✏️
1) Content production and distribution
Now, studying at Yale or Upenn from home is entirely possible thanks to MOOCs such as Coursera & co. Indeed, students can register for a program and complete a particular course they want to take that they would not have available at their home university. As an example, on OpenClassRoom (Next 40) you can find online courses in code, business and even entrepreneurship !
You can even find specialized language learning platforms with increasingly sophisticated features (deep learning, voice recognition) even for complex languages. Chinese, Japanese, Russian will have no more secrets for you at a lower cost. 💸
Finally, there are a large number of platforms that integrate Gaming Apps : Quizzes, video-game scenarios, learning becomes child’s play. 🎮
Let’s take a closer look at the startups that deal with these themes :
Mystery.org (San Francisco) : Created in 2013 Mystery.org wanted to answer the existential scientific questions that children can ask themselves. The startup first launched ‘’Mystery Science’’, a product that includes 150 scientific questions (for example, why the sky is blue). Last year, more than 4 million children used it in more than half of all American elementary schools. The startup has developed video explanations for each question and now wants to broaden the scope beyond the scientist. In concrete terms, it’s a Wikipedia 2.0 for kids !
→ Mystery.org completed a $2 million Seed round in 2017 with Y combinator and 500 startups : what a great world ⭐
Scrimba (Norway) : Born in 2016, the solution consists of a platform of coding courses with more than 120.000 active students per month. The startup has developed videos that allow direct interaction with the code in order to learn faster. The courses cover several languages including HTML, CSS, JavaScript, React and Angular. Everyone can create tutorials on the platform in the language of their choice. Their vision is to create a coding school with the quality of Stanford’s courses but for the price of a gym membership. 🥊
→ The startup has successfully completed several Seed Rounds for a total of $372.000, including one raised by Y combinator in 2020.
Juni Learning (San Francisco) : More coding, we can’t get enough of it ! Founded in 2017, Juni offers a platform with online coding courses for children. Each student meets with a private teacher once or twice a week to get a nice follow-up. Developed by Google alumni, their program is suitable for children ages 5 to 18. The major advantage is that students leave the program with the confidence and skills to know how to create video games, applications and websites. When I will be a father, the little one will have the right to be registered. 👶
→ A $10.5 million round of financing (Series A) was completed with Index Ventures, AME Cloud Ventures, Forerunner Ventures and Pear VC funds.
Arist (Massachusetts) : Born in 2018, Arist was inspired by Stanford and UPenn’s research on SMS-based training. Indeed, SMS training was found to be more accessible, more effective and easier to implement than video-based courses. The solution can also be integrated on Messenger or Whatsapp and the trainings are daily and spread over a period of 5 to 30 days. A course usually lasts only 5 minutes : a concept / case study is sent and then a multiple choice quiz is to be done where answers are given at the end. It is also possible to create your own training directly on a dedicated platform.
→ A $1.9 million Series A was launched in 2020 thanks to Acadian Ventures, Craft Ventures and Global Founders Capital.
2) Digitalization of school administration
Welcome to the limbo of complexity, the nightmare of tech and innovation. Refractory to change, it never stops standing its ground. And it is……..the School Administration. 🏫
Well, that was before ! When I think back to my college courses with my 400kg books and that some courses are nowadays taught with Ipads… they are lucky today’s young people. 👴🏻
It is clear that K12* apps are proven Edtech. These web and mobile solutions provide students and pupils with video lessons designed specifically to respect the school curriculum. BYJU, Blackboard Radio, PlanetSpark are the best examples of success.
K-12* is a term for the training program used in the US for students attending public schools from kindergarten through grade 12. This program therefore covers the primary and secondary levels of this country.
The good news is that the news is not just for students. For teachers/trainers, there are also applications to manage their timetable, the interactivity of their classes or the relationship with parents. For school administrations, salary calculation, invoicing, event organization and recruitment can now be completely automated.
Let’s take a look at what these startups offer to make life easier for teachers :
Appscho (Paris) : Founded in 2014, AppScho makes life easier for students on campus with a dedicated mobile application designed to help them better manage their activities. Deployment is fairly rapid for school services, where it takes about 6 weeks. The best French schools use it, such as CentraleSupéléc, ESCP Europe or SciencePo.
→ The startup has successfully completed a 1.7 million euro Seed round in 2018 with Educapital, BPI and Karista.
Schoolmouv (Paris) : Invented in 2013, SchoolMouv is the first 100% online school support solution integrating video. The startup also offers several modules such as video lessons, course and review sheets, quizzes, exercises, methodology, etc. The goal is to allow each student to work in the best conditions and achieve their goals. One million students already have access to the tool. And the contents are of high quality since they are written by the teachers of the National Education according to the official programs.
→ A 2.5 million euros Series A was completed in 2019 thanks to the participation of M Capital Partners as Lead investor.
Klassroom (Paris) : Created in 2016, the startup has produced a web/mobile application that reinvents the way parents and teachers communicate about children and the activities they carry out at school. No more need to use communication notepads, send children home with documents or send emails to parents that end up in spam. Teachers can send a message to one or all parents whenever they want. In this way, both parents can be equally involved and aware of their child’s school life, even if they are separated. 👪
→ The start-up raised 3 million euros (Seed) in 2020 with the participation of several investors, including Kima Ventures and BPI France.
3) Edtech of intermediation
Among the Edtech, many are those that concern networking platforms allowing access to tutors or specialists in vocational training.
Examples include Career Development Apps that help young graduates and other professionals understand the fundamentals of their dream job and prepare for it in the most efficient way possible. 👔
Similarly, the Test Preparation Platform helps students prepare for various exams or competitions. They allow students to keep up to date with the latest information, monitor their progress, gain confidence and prepare for exams at their own pace. Examples include Classplus, Top Rankers and Examify.
Finally, training apps with VR now allow employees to live a truly immersive experience in addition to learning. This also provides a better quality of training. For example, VR-trained surgeons make 6 times fewer errors and are 29% faster than traditionally trained surgeons.
Let’s take a closer look at the startups that have developed along these lines of innovation :
Parangon one (New york) : Paragon One is an online career gas pedal that connects students with professional coaches. Simulations on the interviews are carried out in order to be able to get an internship that will be totally done remotely. The startup collaborates with top companies to offer flexible online internships to help students gain practical work experience in different sectors before graduation. Employment sectors offered include technology, renewable energy, marketing, investment and real estate. This allows students to ultimately obtain professional skills and build a network of contacts in the industry where they wish to work efficiently.
→ The startup made a Seed round of an undisclosed amount in 2020 by a B.A. (Jason Calacanis) and has already raised $1.9 million in 2019 with the participation of Y combinator.
Uptale (Paris) : With AI and robotics entering the workplace, large companies are faced with the urgent need to bring experience to their employees. And to do this, RV is the best technology to use, both in terms of fun and learning speed. To do this, Uptale, created in 2016, provides a Cloud platform for creating, delivering and monitoring 360° training experiences.
Companies such as Disney, L’Oréal, Schneider Electric or Harvard are already using the platform to reinforce the skills of their operational teams or to integrate newcomers. The solution offers a catalog of more than 50 types of cognitive interactions and services in just a few hours. The good news : no technical knowledge is required !
→ To scale, Uptale relies solely on its revenues. The young company has chosen not to raise funds thanks to its mastery of the conversion rate, despite recent solicitations from investors. Congratulations 👏
IPOs, acquisitions and major fundraising 📈
Instructure (Utah) : Founded in 2008, Instructure offers intuitive products that simplify learning, promote personal development and inspire people to aim higher in their careers. The solution applies K12s to professionals from school to the workplace. Its success stems from the fact that it was the first Edtech to integrate into the cloud by offering SaaS learning accessible to all schools, universities and businesses. Smart.
→ Instructure completed its IPO in 2015. On March 24, 2020, the startup was acquired by Thoma Bravo (a private equity fund) for $2 billion.
Currently, other startups are also in an excellent position on the US side 🇺🇸 :
- Coursera (Mooc) which completed a $130 million Series F in July 2020 for a valuation of $2.5 billion ;
- Duolingo (Language) which raised $35 million (Series H) for a valuation of $2.21 billion ;
- or Udemy (Mooc) which completed a $100 million (Series F) for a valuation of $3.32 billion.
We also note that China is a serious competitor of the US, both in terms of surveying and IPO as demonstrated by the company Ginkgo Education.
Wait and See for Europe 🇪🇺. Maybe an IPO for Kahoot soon ? The future will tell us 🔮
This article is finished ! Thank you for your reading, I hope you enjoyed it ! By the way, if you know about other Edtech, don’t hesitate to comment below 😎.
To continue the adventure, the 10th episode will focus on a sector which, I am sure, will delight more than one : Foodtechs ! 🍴
