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 2021.
Current State of the Global EdTech Market
The EdTech expenditure is likely to register a 16% growth rate and is valued at roughly $405B in the forecast period 2019-2025, as reported by HolonIQ. 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 lots of technology-led startups ready to fill the gap between innovation and traditional education. A record-setting number of opportunity-seeking investors have pumped in millions of funds in EdTech ventures to accelerate their businesses and bring to life their digital solutions. Here’s a quick overview of the 10 largest fundraising rounds in the world in 2019-2021:
|Company||Country||Last Round Date||Valuation|
|Udemy||United States||Mar 2021||$3.3B|
|Masterclass||United States||May 2021||$2.75B|
|Duolingo||United States||Nov 2020||$2.4B|
|Kajabi||United States||May 2021||$2.0B+|
Some of the most funded EdTech startups come from China, the USA, and India.
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 the so-called “unicorn” companies, i.e., those valued at more than $1 billion, the USA scores 13 out of 25 startups on the list mentioned above.
The investment capital raised by US-based firms has doubled since 2016 and reached $2.2B in the previous year. Their number zig-zagged in the mentioned period when it comes to investment deals. However, it peaked in 2020 when the coronavirus limitations started to roll out.
The investment capital is unevenly distributed across the regions of the United States. Innovative hubs like Bay Area, New York, Chicago have experienced the largest fundraising rounds.
Here’s a look at the top 10 companies raising money throughout 2020.
|Company||The Size of Deal, in USD|
The most significant sum of money EdTech flew to Roblox, which provides diverse resources teaching kids how to code. It was followed by Coursera, a renowned EdTech company offering online courses to colleges, universities, and post-secondary institutions. Other contenders that made it to the list are those that target Higher education (Handshake, CampusLogic), alternative EdTech providers (Udacity), and those selling D2C solutions (e.g. Brainly and Skillshare).
Europe is one of the primary markets for Edtech solution providers in the world. EdTech market size is estimated at $643M and is projected to grow by 14,6% by 2027, according to the Research and Markets’ recent report. EdTech has experienced a 9.2X growth between 2014 and 2019 regarding the size of transactions when it comes to VC funding.
These sole numbers indicate an upward trend in the adoption of EdTech products in Europe. Key countries like the UK, France, and Germany experience a boost of the overall move to digitalization in education. Here’s what value EdTech has in the EU strongest nations:
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 lags behind the USA and Asia in creating billion-dollar EdTech companies. Nevertheless, it is a home for companies valued at $100-250M with high growth potential. Here’s a glance of the most reputed ones in 2021:
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. Experts from Grand View Research predict EdTech to evolve in the sector. It poised to experience the fastest CAGR from 2021 to 2028. According to the Facts & Factors report, the global pre-K sector is expected to register a 10.5% CAGR and reach $480 Billion in 2026.
- K-12. Triggered by Covid-19, the K-12 sector has become the largest consumer of EdTech solutions in 2020. 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. Thus, K-12 schools accumulated a 41% share of the EdTech market revenue, as the previously mentioned Grand View Research report has discovered. As for future projections, HolonIQ expects the K-12 segment to experience aggressive growth. It is likely to account for $4,100B of spending by 2025.
- 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, Quizlet, a global AI-powered learning tool, has recently raised $30 million in Series C. The startup sees a massive international user growth of 200-400%, which fuels its continued product innovation.
- 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. It is no wonder that the growth of worldwide expenditure in this segment is predicted to reach almost 4%.
- 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:
|Corporate learning Consumer learning||Preschool education K-12 Schools Higher Education|
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 2021.
- 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.
- 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.
- 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 2021. STEAM-based learning apps like Ozobot, iSci, and Shapes 3D are the top software kits for creating engaging experiences for learners of all ages.
- 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.
- 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.
- 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.
- 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 $1.5 billion. This section’s other education apps, including Italki, Babbel, and Memrise, experience a renewed surge in downloads in 2021.
- 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 almost 79% of teachers using technology in a classroom, Edtech has genuinely disrupted the industry in the latest years. This opens the road for further diversification of Edtech products, which now include the major three types. Here’s their overview with examples:
|Laptops||Desktop and mobile learning apps||Audio content|
|Smartphones||Curriculum management software||Video-based content|
|Desktops||Communications platforms for students, teachers, and parents||Multimedia content|
|Tablets||Online program management software||Text content|
|Interactive whiteboards||Learning management systems|
|AR/VR headsets||Online and cloud-based platforms|
|Content delivery systems|
Grand View Research report indicates that the hardware segment dominated the industry in 2020, with a 42% share of the global revenue. The demand for technical equipment started to increase when most education establishments had to shift to remote learning due to Covid-19 limitations.
The global Edtech universe expands by giant leaps and continues to gain a lot of attention from investors. It is essential to know what rules the industry and fuels market growth to stay on track with the competition. We hope you can define which focus areas should be part of your eLearning strategy and digital education initiatives in 2021.
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 2021.
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