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EdTech 2022: Back to School
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As children return to the classrooms for the new school year, we want to look again at the rising investment area that is edtech.
As you'll be no doubt aware, educational technology, or ‘edtech’, is the use of hardware and software products to facilitate learning. The edtech sector has grown rapidly in recent years; global venture capital investments in edtech crossed US$20bn in 2021, now 40x larger than it was a little over a decade ago (HolonIQ). US$87bn is expected to be invested in the sector over the coming decade (Holon IQ), with China and India anticipated to have the fastest growth.
The sector is also now firmly in the mainstream with BYJU’S, an EdTech platform worth roughly $22 billion, a major sponsor of the 2022 Qatar Soccer World Cup, the most-watched sporting event of the year.
Edtech promises reduced costs, higher quality pedagogy, and impactful outcomes beyond the traditional classroom setting. The sector now sees a diversity of segments, ranging from K-12, post-secondary, digital courseware, employment training, learning analytics, and even blockchain applications. Owl Ventures, the largest edtech VC in the world and a partner of Future Planet, highlight in their 2021 Education Outcomes Report the most exciting trends and portfolio companies addressing this important global challenge.
There can be little doubt that edtech has emerged as a growth powerhouse, supporting the economy through investments and new jobs. We see the future only going one way - with the current edtech landscape developing further with new products, focusing on providing a more customised and personalised learning experience for users.
Below we outline three key focus areas that we're keeping an eye on over the next academic year.
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Click above to listen to Radio Davos from the WEF - Are your children’s toys smarter than you? Two judges at the inaugural Smart Toy Awards, musician will.i.am and UC Berkeley Professor Ron Dahl, an expert on childhood development, talk about their hopes and fears over ‘intelligent’ toys.
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1. Immersive Learning
Extended reality (XR) is an umbrella term for a combination of technology with the real environment, and notably includes augmented reality (AR) and virtual reality (VR). The pedagogical benefits to consumers are obvious; an immersion in their learning that connects their personal perspective to their education. Interest and potential in XR products have risen dramatically. The market for AR in education will be over US$5bn by 2023, and VR head-mounted displays alone in education will grow to nearly US$700mn by 2025 (ABI Research). With costs for VR products lower than ever before and mobile AR/VR applications already inexpensive or completely free, the possibility for immersive learning is already here. The applications of AR and VR in education are wide-ranging and open a world of possibilities.
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2. E-Learning
Given our experience of the last two and a half years, this move to online learning should not come as a surprise. However, more than a temporary trend, e-learning is here to stay. Given its benefits of flexibility, affordability, and accessibility, e-learning represents a new, modern approach to how we conduct education. The global e-learning market was worth US$250bn in 2020, and is set to exceed US$7tn by 2027 (Global Market Insights), with segments as diverse as video conferencing applications, online simulator products, and online courses. The latter segment is particularly popular, with massively open online courses (MOOCs) being offered by companies like Coursera and Udemy (a 500startups company) in collaboration with world-leading universities.
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3. Rise of AI
The global market for AI in education was worth over US$1bn in 2020, and is expected to be worth US$22bn by 2028 (Verified Market Research). AI, in tandem with machine learning (ML), enables adaptive learning; meaning teaching modulated to fit students’ needs in real time. This allows for an efficient and personalisable learning experience, with applications to voice assistants, assessment tools, adaptive interfaces and automated teaching services. Established edtech companies have already recognise the power of AI in education and with the continual rise of e-learning in the future, expect to see AI and ML being increasingly integrated into edtech offerings.
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