2021 was a record year for EdTech deals
What will 2022 hold?
Why You Should Care
EdTech companies raised $20.1 billion in 2021.
This is a 34% increase on 2020, according to BrightEye Venture's report.
Here are some predictions for 2022.
2020 was a challenging year for the education sector as a whole. The learning and development of children and adults across the world was disrupted by the pandemic and social distancing requirements.
However, “it will also be remembered as the year that the sector woke up to the solutions being developed by Edtech companies to help people learn faster, more affordably, more efficiently and more effectively”, according to BrightEye Ventures.
The venture capital (VC) fund also noticed that 2021 saw a consolidation of this trend, and, as a result, was a booming year for investment into the EdTech sector.
In a research report, BrightEye Ventures found that globally EdTech companies raised $20.1 billion in funding; this is a 34% increase from 2020’s figure of $15 billion. There has been a real step change since 2019’s $7.7 billion.
An interesting element of the findings is that the number of deals has declined steadily since 2019 from 1414 to 1177 to 972 in 2021. This suggests that the EdTech is attracting bigger deals, and therefore is maturing.
Also, BrightEye Ventures found that 2020 and 2021 saw as much funding as the five years between 2014 and 2019.
Talking about the findings, Citibank global head of Education Research Tom Singlehurst commented that there is “an appetite for an area which exhibits strong underlying growth on the back of digitisation/technology adoption but also, importantly, a growing need for public market investors to find areas where their capital can also effect broader societal change. Edtech fits the bill on both counts.”
The US represented 46% ($9.3 billion) of the total for 2021 – this compares to only 22% in 2020.
In addition, for the first time ever, European EdTech investment exceeded China – Europe had 31% of the total deals in 2021, which is 10% higher than in 2020. For BrightEye Ventures this suggests that the European EdTech scene is coming of age as it exceeded $1 billion in funding for the first time ever.
2021 was generally a good year for EdTech unicorns. More than one-third (23 out of 32) EdTech unicorns were minted in 2021 – notable examples are GO1, Degreed, BetterUp and Handshake.
Further to this, last year saw more initial public offerings than the previous five years combined. Five EdTech unicorns went public in 2021 – examples include Coursera and Skillsoft.
Predictions for 2022
As part of BrightEye Ventures’ reflection on 2021, the VC fund also shared some trending topics for 2022.
A major trend is the rise of early-stage talent marketplaces. “Demand for skilled talent will continue to grow in 2022 and we predict at least a dozen new early-stage talent marketplaces will be funded in Europe,” wrote BrightEye Ventures. “We anticipate that many of these talent marketplaces will look to grow supply of talent by offering ways to upskill/reskill in the most in-demand sectors”.
BrightEye Ventures also sees robotics and voice technology as the next technological transformation in the world of learning.
It added that “record transactions occurred recently in the robotics sector with UiPath, a software company developing robotic process automation and artificial intelligence (AI) software, becoming the first European Cloud decacorn in July 2020.”
Taking about voice technology, BrightEye Ventures believes that as the algorithms get better and better, and people get more used to this technology in their everyday lives, there will be more companies jumping on the bandwagon to improve user experience.
It looks like 2022 is going to be another booming year; there have been multiple big deals already announced. Examples include EduMe’s $20 million Series B and Looop acquisition by 360Learning.
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Chief Reporter
Allie is an award-winning business journalist and can be reached at alexandra@unleash.ai.
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