In 2020, the market of edtech solutions experienced a boom in investments and startups. The Covid-19 pandemic gave life to big industry names such as Duolingo and Udemy. During that period, the funding for edtech startups was so high they gathered $2,2 billion in America alone. But, once the lockdown was over, so was the gust of wind that carried the sector.
It’s yet to see the hype it experienced during that period, but are the golden years of the industry never coming back? We believe it's too late to be pessimistic about the edtech future and what it holds for startups. Industry experts and the latest reports show it’ll return stronger than ever in 2024.
The Current Outlook Of The Edtech Market
The beginning of 2024 saw the market for educational solutions at a bit of a plateau in terms of startup funding and activity. Currently, it is experiencing a slow burn, with well-established companies like Coursera, Udacity, Doulingo, Blackboard, and BYJU continuing to hold the top spots among edtech providers.
Investments in these solutions also seem to have dropped. For example, an Egyptian startup, Sprints, recently got a $3 million bridge fund from several investors. In January 2024, iStoria, a Saudi edtech startup, only received $1,3 million in funding. These facts demonstrate that large corporations aren’t too eager to invest in the educational solutions sector.
There also seems to be little going on in the startup scene. Most edtech firms operating in 2024 have been established in 2020 and even earlier. As of March 2024, there are no new significant market players with enough edtech funding that disrupt the current hierarchy.
The Latest Statistics On Funding For Edtech Startups
The first sign of robust competition is that the global edtech solution market will reach $136,92 billion by the end of 2024. This is a lot of potential for the 65,000 startups operating worldwide. In Europe alone, investors poured $1,2 billion into these firms during 2023. This shows that the interest in edtech solutions is not going anywhere.
Despite colleges and universities returning students to classrooms, the interest in distance learning products remains robust, with estimates of their market reaching $350 billion by 2025. According to Virtue Market Research, 70% of colleges will have online undergraduate programs between 2024 and 2026. That’s 6,000 institutions potentially using startup products.
Artificial intelligence plays a significant role in keeping the edtech funding going, with most recently established startups using the technology in their solutions. In 2023, US firms working with this technology had an average funding of $3,5 million. Investors also see AI's potential as the edtech market's main driver.
The Edtech Future: What Experts Think
This sentiment is shared by Masha Buther, founder and general partner at Day One Ventures. She believes that AI will be the main driving force in the edtech industry in 2024 and beyond. Startups working with this technology will have a chance to be bought out in the early stages of their lifecycle by large entities like Google, Meta, and Microsoft.
Avi Warshavsky, the founder of MindCET, shares her opinion about how AI will shape edtech after 2024. According to him, this technology made educational solutions more capable of providing personalized content and feedback. Warshavsky also believes that this year will be perfect for acquiring startups for reasonable prices.
Earlybird Venture Capital’s investor Marieke Gehres expects the startup funding to pick up this year with new investment opportunities and the educational solution industry. Unlike other markets, edtech is more measured in responses, even during turbulent times.
Conclusion
While their forecasts are optimistic, the first quarter of 2024 saw little activity in terms of mergers and acquisitions. However, these statistics and opinions show the market for educational solutions is slowly rising alongside the increasing use of AI in these products. Even now, companies are working hard to improve their results, with chatbots and assistants as prime examples of edtech products.
