The prospect of investing in a business that caters to each individual student’s needs instead of putting money into an expensive, time-consuming and, dare we say, antiquated institution is becoming increasingly attractive to investors.
The Covid-19 pandemic helped to cement the future of educational technology (edtech), as institutions rushed to find virtual ways to offer their curriculum. In fact, data shows that edtech startups worldwide raised $10.76 billion in 2020 compared to $4.7 billion the year before. In the U.S., edtech startups raised $1.78 billion in venture capital in 2020 across 265 deals, up from $1.32 billion in 2019.
The pandemic illustrated that remote learning extends far beyond the four walls of a traditional school. People of all ages took to their mobile devices to hone new skills, try new recipes, or learn new languages during the global lockdowns.
These statistics are further supercharging the evolution of learning and shining a light on the importance of edtech — so much so that many investors believe that lifelong learning is helping to take edtech mainstream.
A Generation of Digital Natives Comfortable With Edtech
Today, students as young as Pre-K — as well as their parents — are more comfortable than ever using edtech in the classroom. Because of this, the use of edtech platforms and products is now a “normal” practice in the classroom. Whether it involves a virtual reading game, a Zoom call, or even extracurricular activities, students of all ages are extremely comfortable using technology to navigate their curriculum.
“This can pave the way for more zoom-based synchronous learning offerings. Schools are now fully wired — maybe we will see schools implement home-based learning programs — it’s where students spend half their time,” says Deborah Quazzo, managing partner of GSV Ventures.
How Edtech Helps Fill the Skills Gap
The comfort level of online learning stretches much farther than the K-12 and university levels. Edtech makes lifelong learning much more attainable and convenient for adults who may have full-time jobs and packed schedules. Edtech allows adults to access their coursework at a time that works for them, making it much easier to balance adult responsibilities with learning.
Edtech is also beneficial for employers who want to help employees advance their skills and careers. Ashley Bittner, founding partner of Firework Ventures explains in her thesis:
“Employers will take on more responsibility for re-skilling their current workforce and that training will become job-embedded (rather than only trying to hire to address the challenge).”
Before COVID, estimates showed as much as one-third of the workforce in the United States would need to change jobs by 2030. Employers cite skill gaps as a top-three business concern for staying competitive. Edtech makes it possible for employers to train and keep current employees to bridge those skill gaps.
As employers aim to provide more skills training instead of focusing on compliance training, Bittner believes that more of that training will come from outside sources. In fact, a recent survey found that most CEOs say that they are unprepared to solve this re-skilling challenge with their current internal resources.
“I also see an opportunity for modalities like VR to become more popular as we shift to more digital and remote solutions,” said Bittner.
Principal of Cowboy Ventures Jomayra Herrera agrees that as edtech becomes more mainstream, it will help empower adults to seek new training and skill sets. She expects to see an acceleration in online learning for adults as they continue to explore re-skilling and/or up-skilling.
“There will be more opportunities to do self-paced online learning that is effective and affordable,” she said.
