Why are PE Investors placing big bets on the Edtech Market

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Over the last decade, Edtech has been acknowledged as a necessary innovation to resolve the challenges in the present education system around the globe. The fact that the forthcoming generation is heavily dependent on technology is not just a coincidence with the rapid growth of the Edtech industry. The final push that led to the Edtech industry’s virtue was the pandemic which pushed most sectors into a catastrophic journey and gave an immense boon to health sectors, the Edtech industry, and many startups.

Online education has revolutionized the whole educational system leading to a compound annual growth rate of 19.9% in 2021 to USD 377.85 billion by 2028. Nearly 95% of schools are using the technology as part of their system to increase efficiency. Speaking of Edtech revolutions, Byju’s, The world’s most valued ed-tech startup, is an extremely important case study to consider as it landed many accomplishments including but not limited to hitting $12 Billion valuations in its recent round of funding of $200 million led by BlackRock and T Rowe Price in November 2020 and acquiring seven companies including Vidyartha, Tutorvista, and Edurite.

From 2015 till March 2020, BYJU’S had garnered 45 million free users on the platform, with 3.5 million paid subscribers and in the last few months, the number has gone up to 70 million users and 4.7 million subscribers. The $11 billion ed-tech startups have wrapped up a five-year cycle of renewals and have closed the year with an 86% renewal rate. Bygu’s popularity reached its peak by becoming one of the official sponsors for the ongoing Indian Premier League. 

There are over 4,530 active EdTech start-ups in India today, out of which 435 were the result of the past 24-months alone. The total funding raised by these EdTech firms since 2010 stands at $2.46 billion. Byju’s and Unacademy have raised the most capital, $2.32 billion and $354 million, respectively, in the year of the pandemic. Amidst the presumptuous association between teachers and students in the Edtech industry, Teachers Pay Teachers is a unique Edtech company founded in 2006 in New York that connects teachers with teachers allowing them to exchange study material. Such unique developments in this industry are keeping it moving at an unfathomable rate.

Education technology (EdTech) solutions are expected to evolve in line with the advances in the latest technologies, such as the Internet of Things (IoT), Artificial Intelligence (AI), Augmented Reality (AR), and Virtual Reality (VR), and contribute significantly to the market growth which offers an interactive learning experience online. Zooming into the global investments, HolonIQ released a report showing $7 billion global education venture capital funding in 2019. They are also predicting a tripling of investment in Edtech over the next decade. Global learning technology investment. Looking more broadly in scope to include learning technology suppliers, according to Metaari, there was $18.7 billion of global private investment in learning technology suppliers in 2019.

NEP 2020 is another event of law that added to the exponential growth of the Edtech industry with predictions of further rise in the growth rate. From an estimated size of $700 million today, the EdTech market is headed for 8x to 10x growth in the next 5-years. The radical set of policies is predicted to boost the industry to build vibrant communities of academicians and nobles, break down damaging silos, and enable students to become an all-rounder. 

Furthermore, features and innovations keep on piling up to suffice the roaring needs rising due to the enormous demand for online education especially due to the pandemic and the limitations it poses.



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