EdTech sector funding multiplies by 3 in 2020


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Servicio integral alrededor de una transacción
POR : José Luco06/05/2021
EdTech sector funding

As we have seen in the article "EdTech and Covid-19", the year 2020 has been no different for the Technology Education sector, where the pandemic has caused radical changes in the sector. This post will focus on identifying and analysing the "anomaly" produced, as far as movements are concerned, in the funding rounds in the EdTech sector, where this past year 2020 has raised three times more than 2019.

But what is the EdTech sector? Education technology, or Edtech for short, is a concept that refers to the process of design, analysis, development, implementation and evaluation of learning in all its forms with the aim of improving the educational process by making it more attractive, inclusive and individualised.

Technology has fully entered into education through various tools that use virtual reality or artificial intelligence, among others, to achieve innovative teaching methods that improve the learning process.



EdTech sector funding: $11 billion raised in 2020 via financing rounds

Once we have defined what this sector encompasses, let's describe what happened in 2020 in terms of EdTech sector funding. In that year, as shown by the dark green line in the graph extracted from Baker Tilly's Investment Analysis, there were fewer funding rounds than in the previous year. Despite this, and as the green column for 2020 shows, $11 billion ($10,961,805,381 to be exact) was raised in those rounds. This represents an increase of 300% over the previous year, when just over $3.6 billion was raised.

EdTech sector funding

This sharp growth in EdTech sector funding is due to giant rounds by industry leaders such as those shown by Baker Tilly in its article "EdTech Leaders". Some examples are Yuanfudao or Zuoyebang, who conducted a total of 6 rounds between both companies in the same year.

The largest round was announced by Zuoyebang on 28 December 2020 and raised no less than USD 1.6 billion, in a single Series E round. This is claimed to be the largest round ever raised in the Education Technology sector. Zuoyebang, founded in 2014, is a Chinese online education platform offering quality educational products and services to primary school students.

Another milestone in EdTech sector funding was the round raised by Yuanfudao, also a Chinese company, which raised $1.2 billion in a Series G round on 31 August this year. Yuanfuadao, founded in 2012, is a company that offers live courses and tutoring through an online platform.

In turn, the third and fourth largest EdTech sector funding rounds in 2020 were also raised by Yuanfudao, raising $1 billion in two Series G rounds on 31 March and 20 October.

On the other hand, the following rounds raised less than $1 billion, with Zuoyebang being the next (raising $750M) or BYJU'S, an Indian company that develops personalised learning programmes for primary school students, which received $500 million.

To give the reader an idea of how particular 2020 has been, in the previous year the highest round raised was only $350 million, raised by Zhangmen, a Chinese platform that offers online tutoring. In other words, the top 6 rounds raised in 2020 are larger than Zhangmen's round in 2019.




EdTech sector funding: BYJU'S, company with the highest number of rounds in 2020

In terms of the number of rounds conducted in that year, it was BYJU'S, the aforementioned Indian company, that took the first place, thanks to the execution of 5 rounds. In second place are Kahoot!, a Norwegian game-based learning platform founded in 2012 and IPO'd in 2019, tied with Pariksha, an Indian company founded in 2015 that helps prepare for specific exams, StudyFree, a recent 2019 platform based in Delaware, USA, that aims to connect students with international opportunities, and finally, the aforementioned Yuanfudao. These four companies raised a total of 4 rounds in 2020.

The following tables show a summary by company of the above; the first table in terms of the number of rounds held and the second table in terms of the amount raised:

EdTech sector funding multiplies by 3 in 2020
EdTech sector funding multiplies by 3 in 2020
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