Capital flows into the edtech market are higher than ever.

Digital transformation puts pressure on many companies to continuously upgrade their employees' skills. At the same time, internet access is becoming more convenient, and distance learning technologies are also developing more strongly. These factors have helped the edtech industry explode. In 2021, investment funds invested $20.8 billion in the edtech sector globally, more than 40 times more than in 2010.

After the pandemic, venture capitalists continued to flock to edtech as the education community became more familiar with this way of learning. Online learning habits are predicted to continue to exist in the future, becoming the new normal after the pandemic.

Online learning has become a normal habit in the current period. Photo: pinterest

Edtech Companies Collaborate to Increase Scale and Efficiency

Edtech companies are looking for sustainable ways to address the industry-wide problem of customer acquisition cost (CAC). Mergers and acquisitions (M&A) are a popular way to achieve economies of scale. In June 2021, edtech company 2U announced its $800 million acquisition of edX, a nonprofit online education organization run by Harvard and MIT. The acquisition gives 2U access to edX’s approximately 40 million registered users and hundreds of university partners. These assets give 2U a significant presence in potential markets outside the United States and could help reduce costs as it builds a free-degree model. Other mergers and acquisitions in the education technology space are also ongoing, fueled by the abundance of capital pouring into this promising sector.

Large companies focus on retraining and upgrading employee skills.

In a competitive job market, attracting and retaining talent has become a core challenge for many companies. Amazon, Walmart, Target, and Google have announced large budgets for employee training and development in an effort to reduce turnover and fill talent gaps. Other large corporations, such as Walmart, are incorporating these programs into their diversity, equity, and inclusion (DEI) initiatives.

To meet this demand, edtech companies are focusing on developing corporate training packages. Companies like Coursera, which initially focused on individual users, have also significantly increased their revenue from corporate clients in recent years.

To succeed in the corporate training space, edtech companies can offer unique features that combine training and workforce analytics. For example, apps can identify skills gaps in the workforce, provide educational content to fill those gaps, and provide career coaching and guidance to place new graduates in positions where they can contribute the most value.

India leads the edtech race with global aspirations

In 2010, the US attracted nearly three-quarters of global edtech investment. A decade later, investors turned their attention to India.

The Chinese edtech market has great potential, but with growing regulatory hurdles, prominent edtech companies - including Udacity, Coursera, and edX - have shifted their investment focus to the Indian market. In 2020, the Chinese market accounted for 63% of the education technology industry investment, which fell to below 13% in 2021. Meanwhile, in India, edtech investment increased from $0.2 billion in 2016 to $3.8 billion and accounted for 18% of the total global investment in 2021. In addition, the widespread use of English in India is also a favorable factor for edtech companies to quickly succeed in this market because there is no need to translate much of the available content.

Large Indian education technology investors such as Emeritus have reached billion-dollar valuations and started acquiring companies in the US market.

Chart of growth in venture capital investment in education technology from 2010-2021 by amount and region.

Edtech focuses on supporting career development.

In 2021, McKinsey surveyed more than 3,500 edtech students and found that many learners are experiencing better career prospects and better community integration.

New methods, such as virtual and augmented reality, artificial intelligence and machine learning, are making their way into education. However, edtech providers cannot rely too much on technology and content, as learners want value-added services such as personal mentoring, and need more support such as job search assistance and interview preparation.

To provide a more holistic experience for online learners, some online education organizations are developing strong value-added features. For example, upGrad (India) acquired a recruitment and human resources office to support student employment. On Deck (USA) has built a business model that provides students with access to the community instead of just selling courses.

Overall, global investments in edtech have recorded an average compound growth rate of 45% over the past five years and are still growing by 30% from 2020 to 2021. This is an exciting, promising, yet nascent and volatile sector that participants need to keep a close eye on.

In Vietnam, online education organization Medoo is a pioneering edtech unit in the global trend. Currently, Medoo has more than 6.1 million students studying on the online platform, with the support of a team of mentors and learning care staff (hannah). In addition to online training, Medoo also develops a network of recruitment partners, providing output support services for learners to connect with nearly 100 businesses.