Agoracom Blog

BetterU Education Corp. $ – Six Quick Things You Should Know About the #Edtech Marketplace $ARCL $CPLA $BPI $

Posted by AGORACOM-JC at 10:09 AM on Tuesday, July 23rd, 2019
SPONSOR:  Betteru Education Corp. aims to provide access to quality education from around the world. The Company plans to bridge the prevailing gap in the education and job industry and enhance the lives of its prospective learners by developing an integrated ecosystem. Click here for more information.


Six Quick Things You Should Know About the Edtech Marketplace

Students gather around a table during a plumbing class at an IACM Smart Learn Ltd. learning center in New Delhi, India, on Tuesday, Oct. 10, 2017. Photographer: Anindito Mukherjee/Bloomberg By: Derek Newton

  • Investors continue to be enticed by education technology companies and products.
  • So much so that edtech investment isn’t a fringe pastime anymore, it’s grown into a robust, big market that, according to education research firm HolonIQ, will surpass $7.5 billion this year.
  • They say some 400 deals have moved more than $3.5 billion already this year with a whopping 90 deals north of $5 million in funding.

While the movement of capital to and among edtech projects is substantive, investors still make some mind-numbing mistakes such as depending on technologies that aren’t practical, sales cycles that can’t exist or, even more common, market forces that don’t apply to education.

Nonetheless, whether you’re an investor or an observer, here are a few things you may want to know about the edtech marketplace.

The US is Flat

The U.S. edtech market is remarkably stable in terms of spending and enrollment demand. There are a few demographic crests and troughs expected over the next ten to fifteen years but nothing outside 5% in either direction. And for the past five years, edtech investment in American markets has been stable too – never more than $1.6 billion, not less than $1.0 billion.

The Demand is Global

It’s not just that the American market is tepid, the growth is elsewhere.

According to HolonIQ, 70% of the global investment in education technology took place in just two markets – India and China. Four of the five largest investment deals in edtech so far this year have been logged in China. Their report says matter-of-factly, “The US and Europe will steadily lose ground to China and India” over the next 20 years.

Pivot to Workforce

More and more companies that launched as education reformers intent on creating market change by design, technology or pedagogy are shifting to workforce training instead, banking on demand for lifetime learning, a constant need to retrain or refresh workers on technology skills. In many cases, the long sales cycles and lack of demand have stalled the early projections.

Outside the Classroom

Most of the successful technology innovations in education will be outside the classroom. According to a 2016 report by McKinsey, “Educational Services” was the least vulnerable sector to technology disruption and automation. “The importance of human interaction is evident in two sectors that, so far, have a relatively low technical potential for automation: healthcare and education,” it read.

That doesn’t mean the door is closed. It’s somewhat open outside the classroom. “27 percent of the activities in education—primarily those that happen outside the classroom or on the sidelines—have the potential to be automated with demonstrated technologies,” McKinsey said.

Online Higher Ed is Splitting

While enrollment in online higher ed classes continues to increase, the pool of students is bifurcating. Competition for enrollment online is increasingly being narrowed to two concerns – global brands that can compete anywhere and hyper-local ones.

According to the 2019 Online College Students Report by Learning House, a Wiley brand, more and more students who study online are doing it closer and closer to home. “When this study was first conducted in 2012, 44% of online college students chose a school within 50 miles of their residence. However, in 2019, 67% of online college students are enrolling at schools within 50 miles of their residence, and 44% of those students live within 25 miles of their school,” the report said.

Coding and STEM Skills Merging

Discrete, tech-heavy skills such as coding are increasingly being rolled into existing education offerings by established education providers. Mergers, take-overs or expanded offerings by community colleges and even four-year schools will expand and stand-alone, bootcamp-style models will struggle due to increased competition, lack of scale, non-competitive branding and lack of access to federal student funding support.

This convergence is taking place against the backdrop of a repeated employer surveys showing that so-called soft skills such as writing, teamwork and flexibility are as important as the hard skills of coding, for example.

Unfortunately, these quick points don’t easily melt into a neat package of what’s happening in edtech. Nonetheless, a few themes emerge. For example, investors who don’t think and look globally may be missing the biggest growth opportunities. Another is that, in the U.S. at least, innovations designed to work outside the classroom and/or support career training may be better bets than those intended to change teaching or compete with or disrupt established education norms.


Tags: , , , , , ,

Comments are closed.