Global Ed-Tech venture capital investment soared in 2021, reaching $ 20 billion

The education industry has had another breakthrough year in venture capital funding, reaching three times the investment levels before the pandemic in 2021, according to a new report.

Globally, more than $ 20 billion was invested in education technology in 2021, says annual report Holon IQ report, a global research and intelligence company based in Australia.

This is an increase from $ 16 billion in 2020, which was also a record year.

“It was clear by mid-2021 that 2020 was just the start of a significant wave of venture capital seeking to invest in the future of education,” said Patrick Brothers, co-founder and co- CEO of Holon IQ, in an email. “The acceleration of the US and European markets… has established a new level of funding that will drive major innovation over the next three to five years. “

Provided by Holon IQ

In the United States, venture capital funding for ED Tech has grown from $ 2.5 billion in 2020 to $ 8.3 billion in 2021, according to the report. Growth across Europe has also been strong: investment has grown from less than $ 1 billion in 2020 to $ 3 billion in 2021.

India also remains a major player in the industry in 2021 after surpassing Europe’s total investment in education technology in 2020. The country invested $ 3.8 billion in 2021.

These funding increases were enough to offset a collapse in investment in China – previously a world leader in education technology finance – caused by new education regulations initiated by the government.

China’s funding flow collapses

In 2021, China’s investment in education technology fell to $ 2.7 billion, Holon IQ reported, from $ 10.2 billion in 2020.

Many educational companies have sought to invest in the huge Chinese market in recent years, although some of this enthusiasm has recently waned as new regulations generally prohibit the use of foreign educational materials in public schools. Chinese and, in many cases, shutting down for-profit establishments. tutoring.

Before COVID, China also dominated the ed tech unicorn landscape – startups valued at over a billion dollars.

But 2022 saw 17 new unicorns – mostly from the United States – a change Brothers called a “game changer.”

Provided by Holon IQ
Provided by Holon IQ

While the education markets in Europe and the United States are expected to continue to strengthen, overall it will be difficult for global investments to 2022 to continue at the same rate that the market has seen over the course of the past two years, Brothers said.

China’s investment in education could continue to decline in 2022, Brothers said. Although a shift in focus towards professional and developmental technology can stabilize the country’s level of investment in education.

It is also possible that India will follow China’s lead and regulate electronic technologies more aggressively, Brothers said, which would affect global investment levels.

“India has been driven by a small number of major players,” he said. And as start-up investments continue to accelerate, “we could see India slow down over the next few years as major [players] try to get out and the local market consolidates.

Nonetheless, Brothers said it’s important to note that the industry will continue to see the results of this two-year round of funding for years to come, as hiring, acquisitions, and onboarding of new products take. time.

“It is exciting to see ed technology receiving the attention and funding it needs and deserves, to support schools, colleges, universities and, most importantly, learners around the world in a transformation. digital also critical. “

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