Prior to 2021, Edtech was characterized by a lack of exits. In 2021, we witnessed a flurry of sizeable Edtech exits. A sector once renowned for sluggish exit opportunities appeared to have opened the floodgates.
To put things into perspective, 63% of Edtech exits (M&As and IPOs) since 2010 happened in the last five years alone. 2021 standout as the strongest period for exits, with edtech exits reaching $40.7B in value, up 7.9x compared to 2020.
While some markets saw a change in investment(?) halfway through the year, (most notably China), others including the US saw an increase in the number and value of exits. Notable successful public debuts of several US edtech companies also took place last year, including IPOs by PowerSchool, Duolingo, Coursera, and Udemy, and even the first edtech SPACs (Nerdy, Skillsoft and SoFi).
However, the first half of 2022 tells a different story. The market downturn that has hit all tech stocks is also reflected in the performance of edtech public companies. The price per share of the cohort of companies that went public in 2021 is down on average -59%.
Fewer edtech companies are choosing IPO as an exit route compared to last year – only two companies IPO'ed in H1 2022, compared to 8 the same period in 2021.
Another trend we're observing is market consolidation. The sector has started to show signs of maturity expressed by major M&A activity led by the sector’s biggest successes. Notably, Byju’s has been on an acquisition spree, acquiring 11 edtech startups since 2019. Consolidation means that bigger companies are choosing to buy in instead of building as a way to expand geography and launch new products.
In other news
🗓️ Brighteye Ventures is bringing together industry experts and leading Edtech operators for a week of digital events for the first edition of Brighteye Edtech Startup Festival. The digital event takes place over five days from September 5th - 9th.
The lineup includes Duolingo, Sifted, Dealroom, CITI, Tech Nation and much more. Grab your seat. 👈
🔒 A Cyberattack Illuminates the Shaky State of Student Privacy. Student tracking systems are under heightened scrutiny after recent cyberattacks, including on Illuminate Education, a leading provider of student-tracking software, which affected more than one million students in the US. - New York Times
🦄 Edtech unicorn upGrad has raised $210M from ETS Global, Bodhi Tree, Singapore's Kaizen Management Advisors, and others. upGrad spans several segments—from test prep and study abroad to undergrad degrees and campus courses in 250 universities. Its offerings include finance, law, business, and software.
🇬🇧 FundamentalVR has raised $20M to accelerate medical skill-transfer and increase surgical proficiency through its world-leading medical simulation platform, Fundamental Surgery.
🇮🇳 Jodo, a fintech startup in the educational payments space, has raised $15M in Series A funding led by Tiger Global.
Other notable edtech deals:
🇺🇸 Ceresa, whose employee learning platform is used by globally leading companies such as Nordstrom, Walmart, Blackstone, raised a $3M funding round.
🇸🇪 Quizrr, a leading EdTech provider of human and labor rights training, has closed a $2.5M funding round to accelerate global expansion together with leading MNE’s.
We’ve ranked the top 100 startups to watch over 6 verticals based on our Dealroom Signal: a powerful algorithm helping VCs, Corporates and Governments find the most promising up and coming startups.
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