EdTech Landscape in 2022 and Beyond, Part 1: EdTech Industry Overview (Updated)

The education sector is no longer as convenient as it used to be in previous years. It adopts the latest technology faster than ever before. That drives the development of the worldwide EdTech landscape as it expands gradually, and there is no sign of slowing down.

As a company with a decent background in software development for multiple verticals, including EdTech, Geomotiv knows the challenges of developing a new digital product. In the majority of cases, it requires thorough market research before any decision. In this way, the education technology industry is no exception.

To embrace the entire EdTech landscape and help our readers discover the recent trends, market leaders, and innovators, we created a series of articles dedicated to the topic. The first one covers the EdTech industry overview, its market value, and its significant constituents in 2022.

Current State of the Global EdTech Market

The EdTech industry develops at an overwhelming pace, given the amount of effort and time dedicated to transitioning to eLearning amidst the first and consecutive waves of the pandemic. As reported by GrandView Research, the market size reached $106.46 billion in 2021, while the Reportlinker data suggests that it is likely to grow by $133.05 billion from 2022 to 2026. Given the enormous scale of the EdTech market and a surging amount of new tools that support distant learning, the industry is likely to retain its resilience and thrive in consecutive years.

However, the EdTech market size seems uneven as many underdeveloped regions experience a slow adoption of EdTech. Alternatively, the USA, China, and numerous emerging markets have a very sharp increase in eLearning industry funding.

These regions have raised many technology-led startups ready to fill the gap between innovation and traditional education. A record-setting number of opportunity-seeking investors have pumped millions of funds into EdTech ventures to accelerate their businesses and bring their digital solutions to life. Here’s a quick overview of the ten newest fundraising rounds in the world in 2021-2022:

Source: https://www.holoniq.com/edtech-unicorns

Some of the most funded EdTech startups for this period are from India, the USA, and China. Other mentions include Austria and Australia, which are on the list of 36 so-called “unicorn” companies, i.e., those valued at more than $1 billion. They are now valued at more than $105 Billion.

Regional Insights

The USA

The majority of EdTech startups in the world are headquartered in the USA. The country’s advanced economy and focus on constant innovation contribute to the sector’s immaculate growth.  As for EdTech unicorns, the USA scores 17 out of 36 startups on the list mentioned above. 

The investment capital raised by US-based firms has doubled since 2016 and reached $5.9 billion in 2021. Their number zig-zagged in the mentioned period when it comes to investment deals. However, it peaked in 2021 when the coronavirus limitations were partially or fully abolished. 

However, the numbers went down in 2022 alongside the global recession of funding in EdTech startups. They collected only $1.7 billion of funding allocated to 156 deals in 2022.

Here’s a look at the top 10 companies raising money in the USA throughout 2022.

Europe

Europe is one of the primary markets for Edtech solution providers in the world. Although global investment opportunities have decreased significantly, the EdTech VC funding shows no signs of slowing down. It currently occupies a 22% portion of the global VC funding as the companies have secured $1.4 billion so far.

The first half of 2022 saw three mega-rounds, exceeding $200 million, and six deals surpassing $50 million in Europe. These sole numbers indicate an upward trend in the adoption of EdTech products in the region. Key countries like the UK, France, and Germany experience a boost of the overall move to digitalization in education and show resilience amidst the global slowdown.

While the UK dominates the European market by the number of deals, the German EdTech market is catching up. The country’s entrepreneurs managed to secure $329 million contrasted to $67 million in 2020 and less than $300 million in 2021.

As for the leading EdTech companies in the region, they build products to support learners, teachers, institutions and work on everything from VR-powered interactive simulators to tutoring apps and marketplaces.

Europe is a home for companies valued at $1-3.5 billion with high growth potential. Here’s a glance of the most reputed ones in 2022: 

EdTech is a maturing industry that can hardly be segmented in any generic way. However, keeping in mind the size of the Edtech market and the most prominent players in the world, we can overview its main categories from different perspectives:

• Customer types
• Application spaces
• Solution types.

Main Edtech Customer Types

• Preschool Education (Pre-K) used to be the slowest EdTech sector to adapt to technology advancements, mainly in the pre-Covid period. However, printed materials, pen, and paper assignments declined as the demand for app-based learning with videos and other types of digital content surged. 
  Parents are now much more aware of the role of technology in education than ever before. You can find it in various studies of early childhood education, which report soaring adoption rates of the EdTech. According to the Facts & Factors report, the global pre-K sector is expected to register a 13.5% CAGR and reach $486 Billion in 2029.

• K-12. Triggered by Covid-19, the K-12 sector has become the largest consumer of EdTech solutions in recent years. Coupled with the changes introduced by the pandemic, the spread of broadband connectivity and access to mobile devices has also contributed to the sector’s growth. As for future projections, Adroit Market Research says the K-12 segment will experience aggressive growth. It is likely to be worth $322.68 billion in 2029.

• Higher Education. When the Covid-19 pandemic hit, colleges and universities had to transition to online delivery of their programs, which also fueled the demand for EdTech solutions. But the move to online settings was not an easy undertaking: millions of students and teachers were struggling to organize their studies remotely. Nevertheless, the segment shows a gradual uptake and is likely to grow by 1.5% by 2025, according to HolonIQ’s findings. 
  Some startups have reached new heights in the wake of the massive interest from industry veterans and more general-type investors. For instance, Scaler, an India-based upskilling tool, has recently raised $55 million of funding. The startup sees a massive potential in US-based colleges and higher education institutions as they plan to enter that market in the shortest time frames.

• Corporate Learning. As lifelong learning is becoming a booming trend among the workforce, this segment experiences a significant boost of interest. Post-Covid, employers focus on corporate training and upskilling more than ever before. Because of social distancing, online software solutions provide the flexibility and equity to gain additional knowledge for professional development.

• Consumer Learning. Outside controlled school or college settings, individual homes have also turned to fun and engaging EdTech products. The consumer segment is accelerating faster than in previous years, triggered by the awareness of the benefits of lifelong learning and continuous technology advances in that space. Additionally, MOOCs are gaining momentum, providing affordable online education to consumers.
  Here’s what the distribution of the customer types looks like in the Edtech ecosystem:

Main EdTech Spaces

With Edtech Digest listing top names among 60+ contenders that transform education through technology, we can find that EdTech solution types have become quite diverse. Let’s name some of the most important ones as of 2022.

1. Immersive tech that unites tools based on VR, AR, ML to enhance student engagement and reduce corporate training costs. They enable students to access vital virtual experiences that they wouldn’t be able to get any other way in a traditional classroom. It is necessary to mention here that the costs of these technologies have become more affordable to educational institutions and corporations alike. They aim to invest in incredibly detailed experiences for their learning environments.
   Among top immersive tech startups is a Finland-based company called 3DBear. It provides solutions that employ 3D design and AR tools for students of all ages and educators. Their engaging activities for in-class and remote learning are applicable for K-12 schools, higher education institutions, and corporate training.
   Many immersive tech companies focus on educational game development, too. Among them, Luden.io crafts educational video games. Another honorable name is the Anatomyou app. It provides an interactive way to teach human anatomy with a 360-degree immersive experience.
   
2. The EdTech market landscape encompasses a Coding and Technology cluster, including apps and services for all sectors and age groups. They teach both adults and kids coding and robotics and facilitate upskilling for more advanced learners using boot camp-style solutions.
   The apps like CodeMonkey, Bomberbot, CodeCombat provide essential computer literacy skills, understand the logic, and learn the essence of iteration.
   
3. Software dedicated to STEAM, which has become a recent improvement over the traditional STEM-based education, is developing by giant leaps. Science, Technology, Engineering, Math have received a new meaningful education element in their family - Arts. Tech-enabled creativity and design skills have become a substantial part of art education, gaining momentum in 2022. STEAM-based learning apps like Ozobot, iSci, and Shapes 3D are the top software kits for creating engaging experiences for learners of all ages.
   
4. Early childhood education (Pre-K) space in EdTech has seen a surge of interest due to widespread recognition of obligatory pre-K education. The coronavirus outbreak forced the typical pre-school classroom environment to adapt to remote settings. Early childhood learners and educators had to rely on hand-held devices loaded with various applications to keep up with the curriculum.
   Pre-school settings and nurseries have a vast potential to adopt the newest technology as it becomes an impactful tool to promote important social-emotional and self-expression skills.
   Hence, by replacing traditional teaching methods with engaging content using AI or VR, educators can respond to the most demanding aspects of the pre-K space. With apps provided by Gro Play, Age of Learning, Studycat, and others, you can equip children below the age group of seven with resources to learn vocabulary, life skills, letters, and numbers.
   
5. Learning management systems (LMS) bring together administrative tools that allow tracking and reporting student-related information. LMS also helps with communication among teachers, students, parents, and administrators. They also provide an infrastructure for delivering and managing engaging educational materials and provide everything you need to launch an academic course.
   By moving the lessons outside the traditional classroom, LMS platforms promote open and flexible conditions for education. These solutions are widely used in K-12 and post-secondary segments. One of the most popular LMS choices among them is Moodle, an open-source web application with flexible customization options. Other solutions include Google Classroom, Edmodo, and Blackboard.
   
6. Social-emotional learning (SEL) space is enhanced through EdTech products in many ways. Modern pieces of technology create moments for educators to incorporate social-emotional learning into the classroom without disruptions. Using collaboration platforms, AI-powered devices, virtual and augmented reality, teachers can help develop the key SEL competencies and boost the learners’ collaboration and communication.
   There are countless ways to implement SEL in education. For instance, with a free service provided by Everfi, elementary school kids can find out about conflict resolution through complicity, empathy, and resilience. Over the past two years, it has been used by more than 13,000 schools in low- and middle-income areas. 
   As for commercial projects, EdTech supports SEL from various aspects. Some of them are fully based on social-emotional learning. For example, Roundies provides a 360-degree SEL curriculum for pre-K and K-12 establishments.
   Various digital products lie at the intersection of SEL and adjacent academic niches. Apps and programs such as Mightifier teach character development to prevent bullying and isolation in K-12 schools. Apps like Flipgrid provide a video discussion tool for remote classrooms.
   
7. Language learning. This space has seen steady growth over the past years, driven by innovation and continuous interest from investors. As a result, advanced video and audio technologies, voice recognition, and AI-powered features started to transform the market for this category. English learning apps, courses, online tutorials, and other services have become mainstream in the EdTech domain.
   With over 100 million downloads on Android’s app store, Duolingo is one of the highest-grossing language learning apps in the world. After a $30 million investment from Google's parent company, Alphabet, Duolingo’s market value is approximately $3 billion. This section’s other education apps, including Italki, Babbel, and Memrise, experience a renewed surge in downloads in 2022.
   
8. Online courses have evolved, modifying their free-of-charge open-source offerings with advanced components. Online course providers adapt to the rising demand for quality content from top contributors by adding paid elements, more diversified affiliate programs, and extending partnerships with educational institutions.
   The pandemic brought many students and corporate learners into education through free and paid university courses and MOOCs. As the shift to remote learning proliferated across nations, many newcomers launched new platforms to compete with renowned names such as Udemy, EdX, and Coursera. So, if you want to create your own e Learning platform, get ready for a dense competition in the niche.

Main Types of Edtech Solutions

With nearly all  teachers using technology in a classroom, Edtech has genuinely disrupted the industry in recent years. This opens the road for further diversification of Edtech products, which now include the major three types. Here’s their overview with examples:

The demand for technical equipment started to increase when most education establishments had to shift to remote learning due to Covid-19 limitations.

Closing Thoughts

The global Edtech universe expanded by giant leaps in 2021 but started to slow down in 2022. Nevertheless, there are sure signs of resilience in Europe and the USA, while other regions strive to find ways to go through the uncertain period with a fewer number of deals and funding. Still, it  is essential to know what rules the industry and fuels market growth to stay on track with the narrowing competition. We hope you can define which focus areas should be part of your eLearning strategy and digital education initiatives in 2022.

Indeed, it is hard to embrace the whole ecosystem of EdTech solutions and services, but it is even harder to predict which themes are going to dominate in the next few years. In the following article, we’ll shed light on the most impactful trends in EdTech in 2022 and beyond.

Stay tuned!