The online learning platform Coursera made its market debut on the New York Stock Exchange late March through an IPO based on a $5.9 billion market cap. Coursera joins thus the happy few EdTech unicorns, a cohort of 20 companies around the globe, coming exclusively from the US, China, and India, and now collectively valued at circa $64 billion according to HolonIQ. Fortunately, this example illustrates that massive funding has been directed to the sensemaking Edtech market, which is shaping the educative landscape of tomorrow for future generations of children, students, and other learners. Impact venture capital & private equity firms consistently claim interest in this industry, which offers an attractive double-digit CAGR. Antifragile to the Covid-19 crisis, the Edtech industry has even accelerated its growth consequently from the forced transition to e-learning and blended learning undertaken by educational institutions since 2020. Across Europe, the vast majority of private investments, from Seed to Series C and beyond, are collected by ambitious online learning platforms and to a lesser extent by content management systems, encompassing both large and niche players. Though, the current allocation of funds by VC and PE investors raises at least 3 challenges that are instrumental to the future success of European Edtech. First, the promises expressed by certain SaaS-based platforms to swiftly scale-up remain to be confirmed beyond country level. Second, true differentiation has still to be stressed by platforms which face direct competition from deep-pocketed US and Chinese giants on a market where critical size matters. Finally, it is worth considering that innovation resides also in other market segments, such as for example learning management systems and technology-based learning, that are surprisingly enough not always on investors’ radar. Anyway, the strategies of private investors, but also of large Edtech players, and of educational institutions together will play a key role in overcoming or not these challenges for Europe. The ongoing consolidation wave may help some leading Edtech companies to acquire new innovation capabilities and to accelerate their scale-up strategies across Europe. In addition, active venture capital firms may intend to diversify their portfolio as they gradually gain knowledge of the galaxy of Edtech market segments, and to back innovative startups that are not yet on their radar.
Odyssey is pleased to contribute to development of the Edtech ecosystem through bespoke advisory services, in full consistency with our purpose or "raison d'être" to serve the economic competitiveness of European tech companies.
Odyssey assists tech startups, SMEs, and large corporates in the end-to-end design and execution of strategic, M&A, and capital raising projects.
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