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The 2021 edtech avalanche has simply begun

Final week was an excellent one for edtech in Europe.

GoStudent turned Europe’s first edtech unicorn (IPO’d firms apart), elevating its third spherical in 12 months and the largest ever within the sector in Europe. Brighteye Ventures’ analysis confirmed that VC investments in European edtech had breached $1 billion in a calendar yr for the primary time, even with out GoStudent’s mega-round, with six months left to go.

Edtech deal movement in 2021 seems set to match and even outpace 2020 ranges, per the report: At $9.4 million, common deal measurement is triple 2020 ranges; seven firms have raised $50 million in 5 totally different markets; and the U.Okay. has greater than 3 times as many offers as the following particular person market.

Deal-size development in edtech through the years. Picture Credit: Brighteye Ventures

It’s attention-grabbing that we’re not seeing monumental will increase in deal depend. The $1.05-billion mark within the report is unfold throughout 111 transactions — there have been 237 in 2020, so we might count on the same complete this yr. Extra funding and steady deal depend in fact signifies that we’re seeing vital will increase in deal measurement.

It appears generalist traders are recognizing that edtech investments can reap outsized returns, just like sectors like deep tech, well being tech and fintech.

We will draw a number of conclusions from this. We will construe that firms created final yr and in earlier years matured considerably through the pandemic resulting from elevated demand. Furthermore, this fast pure choice course of offered insights on verticals and doable winners.

Lastly, it appears generalist traders are recognizing that edtech investments can reap outsized returns, just like sectors like deep tech, well being tech and fintech.

That is contributing to bigger early rounds than we’ve got seen in earlier years — traders can’t choose the winner, however they’ll slant the enjoying discipline as a substitute. We due to this fact count on to see a surge within the variety of pre-seed, seed and Collection A rounds within the second half of 2021, as firms based through the pandemic start to lift significant funding.

Another excuse that edtech is being taken critically by generalist traders is that the true measurement of the market (and the extent of digitization to come back) is turning into extra conceivable.

Spending on edtech is undergoing a similar growth to that of media spending in 2010

Edtech spending is rising like media spending did within the 2010s. Picture Credit: Brighteye Ventures