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EdTech:
Facilitating the Future of Learning
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One of the largest and most important sectors of the global economy, the education industry, is undergoing a digital revolution. Artificial intelligence, automation and digitalisation are redefining norms in education as more efficient and engaging forms of educational delivery channels emerge.
Over the last 18 months edtech’s growth trajectory has been simply unparalleled. The sector has attracted investments worth more than US$2.2 billion and continues to dominate headlines. This period will no doubt be seen as a tipping point, as the ecosystem continues to expand leaps and bounds.
Historically the education “service” has been delivered in almost the same way for centuries around the world. The penetration of digital technologies prior to COVID-19 was low, at only 2-3 per cent, well below most other sectors of the modern economy and MOOCs famously never reached their widely discussed potential. However, COVID-19 propelled edtech into the mainstream and instantaneously removed some of the historic bottlenecks, namely resistance to try new digital tools and perceptions that education and continued learning cannot be delivered as effectively online.
Compared to 2019, the edtech user base in 2020 in the US doubled from 45m to 90m across k12 and post-k12 sectors. The average time spent using such services or devices went up 50%, from 60 to 90 minutes. There was also an 83% increase in the number of paid users, an important and noticeable development. Our partner Owl Ventures, with over $1.2 billion in assets under management, is the only scaled dedicated fund in the edtech market, a landscape that is expected to grow more than three times in size over the next five years.
This trend can be seen worldwide and in India edtech is certainly no longer a sunrise sector, but an industry whose moment has arrived with more than $5 bn in private equity investments over the last five years. Two unicorns have already been created in this space with Byju’s being the most valuable unicorn out of India at a $16.5 bn valuation and Unacademy also entering the elite billion-dollar club recently. There are more than 4,500 startups operating in the edtech space in India currently, an industry that is projected to grow to $30 bn.
Edtech has emerged as a growth powerhouse, supporting the economy through investments and new jobs. It’s also enabling learning to continue at school, college, individual and corporate level. Companies in our network such as Learnerbly, Degreed and Biju's really have gone from strength-to-strength. There can be no doubt that edtech’s role has become invaluable.
We see the future only going one way - with the current edtech landscape keeping on developing with new products, focusing on providing a more customised and personalised learning experience for users, well after the age of lockdowns and curfews comes to an end. Read on below to see three of the top edtech trends we are discussing at the moment.
With these seismic changes bringing a new future for the education sector, there can be no doubt that this is a space investors can leverage if they want to integrate profit with purpose.
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Norman Foster Foundation
OPEN CALL: Sustainability Workshop 2021
The Norman Foster Foundation is selecting ten students to be awarded a scholarship for the first edition of the Sustainability Workshop, supported by the Rolex Institute.
The Sustainability Workshop will take place from 18-22 October 2021, in Madrid, Spain. The workshop will bring together international experts and students to explore sustainable solutions for overarching topics such as climate change, the use of energy and resources, and their local and global implications. As usual, the Workshop will gather a team of ten scholars, drawn from diverse backgrounds of architecture, the arts and humanities, computational design and digital fabrication.
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1. eLearning
In 2021, there’s probably no bigger education trend than eLearning. According to the Research Institute of America, eLearning increases retention rates by 25 to 60 percent. It's also extremely scalable, allowing the best educators to reach many students at the same time (or at different times, in the case of on-demand pre-recorded courses.) And at a much lower cost than traditional in-person classes. Educational institutions are also becoming much more directly involved with innovation and entrepreneurship. No wonder this industry is expected to hit $375 billion by 2026.
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2. Gamification
Gamification in learning has been around for sometime now. But in a post pandemic, hyper digital world gamification takes centre-stage. As students are exposed to an overload of information and learn in-silo outside of traditional classrooms, gamification will help keep them motivated and aligned to learning paths. Gamification has increasingly been used in professional learning too as shown by pioneers such as Salesforce. The gamification in education market is projected to grow from USD 450 million in 2018 to USD 1,800 million by 2023, at a Compound Annual Growth Rate (CAGR) of 32.0% from 2018 to 2023 (Source: marketsandmarkets.com).
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3. Mobile & Continuous Learning
Startups are jumping into the education segment to cater to the specific needs of students and educators — and of course, do what startups do. With the meteoric rise of the use of mobiles, naturally that means the appification of education has begun. Apps can be a very valuable resource, acting as built-in lessons and aid in tracking progress. Furthermore, the right app can enhance lessons by offering another approach to a subject.
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FPC Challenge Response Basket -
in partnership with Barclays
Earlier this month we launched our second Future Planet Capital Challenge Response Basket (CR2), in partnership with Barclays Private Bank.
This launch follows the success of basket one, which focussed on Infectious Disease & Pandemics.
Our vision is to connect the world’s largest investors with the brightest minds to address the world’s greatest challenges. The initiative will offer preferred access to invest into a bespoke basket of growth stage life science and technology companies from the world’s top universities, designed to provide a rapid investment response to immediate global challenges.
The second basket responds to the immediate global challenge of Food Security & Climate Change. It also runs alongside planned work that Lord Foster is doing with Barclays to support their climate change initiatives.
Climate change is the greatest challenge humanity will face over the next century. Even within current UN treaties that limit temperature rises to 2°C, there will be harsh consequences including ocean acidification, sea level rises and mass extinctions. In 2018, the UN gave a stark warning, that unless this can be limited to 1.5°C, a quarter of the world’s current GDP could be lost by the end of the century, with developing countries such as India hardest hit, at up to 90% GDP loss (NFGS 2020, Bloomberg 2020).
Future Planet are now looking beyond ESG to the $50 trillion of investment required to mitigate this problem (Morgan Stanley 2019), tapping into the associated market opportunity of backing the companies rising to the challenge.
CR2 will co-invest alongside Future Planet Capital’s flagship Fund and/or University Partners, benefiting from access to exclusive follow-on allocations, co-investment and discounted bridge financing rounds in competitive rounds.
Please don't hesitate to get in touch with Lyle to learn more about CR2 and our work with Barclays.
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Challenge Investing
Within our universe, we have a significant number of companies that are helping to profitably address this significant and vitally important global challenge. If you’d like to invest in some of the most promising growth companies based on top research then please don't hesitate to get in touch.
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