Edtech Startups: The Demand in 2020 is Skyrocketing

Edtech Startups: The Demand in 2020 is Skyrocketing

The latest reports from UNESCO indicate the over 770 million children have lost access to their school classrooms since the start of the Coronavirus Pandemic. This has created a boon for Edtech companies in Asia; will the US follow suit?

Last week, it was announced that the Edtech platform Byju experienced a 60% increase in students in the first few months of 2020, while another Asian platform, GSX, witnessed a 92% rise in share price and 15 million additional users since January.

Snapask (Hong Kong) was a big winner for investment dollars, securing $35 million in funding after performing higher than expected in January and February, as reported by The Financial Times,

While the global investment in Edtech reached nearly 19 billion in 2019, most funding deals were occurring in Asia, where the market value is expected to top 5 trillion in 2020.

The US is currently lagging far behind, investing $1.45 billion in 2019—which is up from $1.2 billion in 2017, but spread across a fewer number of deals.

US Edtech investors have been leaning toward caution, focusing on later-stage startups and committing larger funding amounts to those candidates. This equates to fewer winners and a significant amount of losers in a field that has far more potential, especially now.

With the United States planning for 18 months of business disruption and periodic quarantines due to the Coronavirus Pandemic, the need for Edtech solutions that can create high-quality, seamless experiences for both teachers and students is accelerating.

The difficulty is that very few institutions and education firms were ready to meet the demand introduced by COVID-19.

Kristin Lynn Sainani, Associate Professor of Epidemiology at Stanford was quoted by TechCrunch as saying:

[The transition] is not going to be well-planned when you’re doing it to get your class done tomorrow. At this point, professors are going to scramble to do the best they can.

The awkward switch from physical to virtual classrooms in the middle of a crisis has not lessened the US demand for Edtech solutions. The US Education and conferencing platform, Zoom, bested earnings for the first few months of 2020, while Bluescape logged a 300% increase in customer demand for their SaaS collaboration product.

The next step should be renewed interest in early-stage solutions and an increased demand for custom EdTech applications. The education firms affected by the Coronavirus are now being forced to deliver services remotely, and that is a useful capability for the future.

The opportunities do not end with classroom and conferencing solutions. Edtech is now targeting the wider problem of illiteracy and inconsistent access to high-quality education worldwide.

The demand for seamless Edtech products targeting the K-12 and college-level markets is showing a steep rise in Asia, often including VR, AR, AI, and machine-learning technologies. This is the market that is expected to attract the most VC attention in 2020, and the reasons are obvious. It’s not just the opportunity to create solutions for traditional institutions and teaching firms; it is the path to redefining education as a whole, creating seamless, intuitive and personalized experiences for students across the globe.

As Joleen Liang, partner at RISE, told her 2019 conference audience:

The real sweetheart of the Edtech movement is AI. It’s estimated that over $1 billion was invested in AI in education last year in China. Squirrel AI Learning is a prime example of an AI success story. Headquartered in Shanghai, the company is leading the market in personalized, adaptive learning. AI will revolutionize education.

The Edtech wave is here, and the demand has never been higher or the need more acutely demonstrated. Now is the time to invest.

Would you like to know more about how we can help you design and build the Edtech app you’ve been developing?

In our EndPoint Modeling workshops, we take a precise approach to scoping your project down to the last detail. We provide you with a clear set of functional and non-functional specifications and a working prototype that can help you get the funding you need. Leave a message in the comments, or contact us directly for more information. We love hearing from you!

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