EdTech Startups: Opportunities for Growth

The amalgamation of education and technology has existed far before the world was struck with COVID-19. The focus on traditional methods of learning did not give EdTech the chance to rise to its potential until recently. The transition from class-based learning to online learning saw a sharp increase in EdTech usage and it continues to grow at a steady rate. Investment in education technology saw an investment of €15.87 billion in 2019 (Terrisse, 2020). The rise in education software has encouraged startups to look for growth opportunities in education technology. But the question most startups ask is:

Let’s assume that you have a great idea for an EdTech startup but don’t feel 100% sure whether you should pursue it or not. Starting a new company can seem uncertain, especially when you are doing it for the first time. But the great news is that the EdTech industry has a lot of opportunities for success and growth. In this article, we will discuss 3 reasons that will prove that investing in an EdTech startup is worthwhile.

EdTech startups have been significantly growing since 2016. In 2016, Chinese EdTech startups received $1.2 billion investments and the number of investments for Chinese edtech startups has been growing by 20% per year. But when the pandemic hit the world, there has been a dramatic rise in the demand for education software. Nowadays, with the physical closure of schools, parents and students know the need for effective e-learning solutions, especially in the pandemic world.

Even schools have been buying a membership for their students to learn additional skills on websites like Coursera. Recently, Coursera announced that it has raised $130 million in additional funding from its investors. Moreover, Udemy reportedly raised new finance at $3 billion valuations. This data proves that there is sheer potential for new EdTech startups. This is mainly due to the realization by people that they don’t have to pay 1000’s of dollars to get valuable education when they can

Finding investors is difficult especially for new businesses. Startups generally have to mitigate risks and overcome numerous hurdles to attract third-party investors. But with EdTech startups, investors are realizing the role technology is playing in education. In fact, today there are established venture funds like newschools.org that only invest in EdTech startups.

Finding investors is difficult especially for new businesses. Startups generally have to mitigate risks and overcome numerous hurdles to attract third-party investors. But with EdTech startups, investors are realizing the role technology is playing in education. In fact, today there are established venture funds like newschools.org that only invest in EdTech startups.

Despite a rise in demand for education technologies, the number of companies tapping into the pool of opportunities is significantly low. Virtual campuses have increased the demand for software to allow students to attend online classes, complete their daily coursework without academic delays, and have an efficient online assessment system.

Zoom, a video conferencing company, has experienced a sales boom amid pandemic with more than 300 million daily participants every day, attending the meeting and building virtual classrooms. Zoom is recently expected to rise as high as $1.8 billion this year. Despite having a significant rise in the usage of Zoom, users still experience poor video and audio quality, privacy issues, and problems arising from having no end to end encryption. Moreover, if we look at the specifics, there haven’t been advanced developments in AR/VR apps for education as well. All of this shows that there are massive amounts of undiscovered opportunities in the edtech industry.