Edtech comprises the whole world of computer-aided education and training. In 2019, the market size of Global Education Technology was around 75 billion dollars which will exceed 318 billion dollars by 2027 with an increasing rate of 20% every year. However, this market did not exist even a decade ago. People are more allured to developing skills than traditional degrees depending on the current demand for skill-based work.
History of EdTech
In the 19th century, technology paved its way in the education sector. In the 1920s and 1930s educational films were used to instruct people and explain things, some of which took the form of “Explainer Video” today. The State University of Iowa introduced the first instructional television program in 1932. In World War II, instructional media were used for military training and individualized instruction. First instance of using instructional media in academia dated back in 1959 in the elementary school in New York. University of Illinois, USA introduced online learning in 1960, at the University of Illinois, USA. Later in 1963, the Vocational Education Act was introduced to fund technology inclusion in academia. In 1971, a computer game named Oregon Trail was invented to teach History and Math.
In the 1980s, Apple computers gained popularity in educational institutions. Teachers used software solutions to introduce activity-based tasks for the students. University of Toronto takes the credit of introducing the first ever wholly online course in 1984. Five years later, in 1989, the University of Phoenix launched the first ever completely online collegiate program, offering both Bachelor’s and Master’s degrees. In the later years, technology continued to complement education with smart tools and solutions, digital curriculum, learning management system (LMS), online certifications and courses, distanced learning, etc.
Rise of MOOCs
Massive Open Online Courses or MOOCs have been revolutionizing the distanced learning space for 10 years now. In July 2011, a Stanford course named “Introduction to AI” was published online for free. Within a few months after that, Stanford University offered more free courses and MITx, Coursera, and Udacity went live as online course providers and raised funds. Due to this frenzy, the New York Times declared 2012 as “The Year of MOOC”.
The MOOC providers followed the CLASSIC internet formula – Lure a big audience, figure out the business model later. In doing that, the providers grappled with challenges to establish the business models however attracted a lot of venture funds. Udemy raised over 300 million dollars and Coursera raised over 440 million dollars so far.
Over the years, the MOOC providers adapted through trial & error nevertheless failed to grow sustainably as few of the learners actually completed the courses. At last the pandemic boosted the distanced learning space and propelled the traction with many folds. From January to August 2020, Coursera clocked 20 million registered users whereas the number was 8 millions in the whole year of 2019. Students and professionals sprang to the platforms to spend the leisure upskilling themselves.
Global EdTech Landscape & Revenue Model
Education Technology or EdTech is not Only About Online Curriculum Learning; it comprises several verticals like skill enhancement, job placement through implementing career track, software & hardware solution etc. There are several segments where today’s EdTech startups are operating. They are – Pre-kindergarten or Pre-K, Kindergarten to 12th grade or K-12, Higher Education or HE, Skill Enhancement, B2B, B2C, B2B2C, P2P Services & Solutions.
In their 2021 Global Learning Landscape report, renowned education intelligence platform HolonIQ mentioned 10 verticals where global EdTech startups are currently operating. They are –
1) Knowledge & Content
2) Education Management
3) Traditional Models
4) New Delivery Models
5) Experiencing Learning
6) International Education
7) Learning Support
8) Assessment & Verification
9) Workforce & Talent and
10) Skills & Jobs
So far, the Most Popular Revenue Models for EdTech Startups are – Freemium + Pay as You Go, (Only) Pay-as-You-Go, Subscription, and Enterprise Sales. Industry experts believe that new revenue models will emerge in the EdTech space. Success-based revenue model can be the next one to emerge where revenue of an EdTech will be linked to the success of the learners. Through this, EdTech startups can be more relevant in the Impact Investment space. Also the income-sharing model is expected to be popular after some years where there will be a partnership between the students and the educational entities for EdTech programs. Under the partnership, educational entities will provide services in exchange for a certain percentage of income of the students upon completion of the programs.
EdTech Venture Capital (VC) Investments started the 2010-2019 decade with just $500 million and ended 14x higher at $7B. At the starting of this decade (2020-2029), HolonIQ projected $87B VC funding in the next 10 years. Till 1st half of 2021, EdTech VC funding already clocked $26B with $10B in the 6 month of 2021. So the initial forecast of $87Bn might even cross $200Bn by 2030.
Revolution of EdTech industry
the global education technology market is expected to more than triple from about $100 billion today to $378 billion in 2028, with the fastest growth occurring in the Asia Pacific.
Unsurprisingly, this execution of online learning varies from country to country. In more impoverished regions of rural India and Indonesia, it fills in for schools that lack money and qualified teachers. Meanwhile, in wealthier urban areas it’s providing extra tutors and training for an emerging middle class. And then there are the mature markets like North America and Europe, where students and workers are turning to advanced online learning tools like virtual labs to ensure their skills are keeping pace with the rapidly expanding knowledge economy.
In many ways, the online learning sector is unique in its ability to adjust to different markets. Unlike some industries that experience a life-cycle of growth, maturity and then stagnation, the online learning sector demonstrates that it can evolve and transition from one untapped opportunity to another.The growth and use of online learning continue to expand rapidly due to the many advantages that it offers to both teachers and students.
According to HolonIQ, the Global EdTech Market will be Valued Over $10 Trillion in 2030. On the basis of fundraising, Chinese EdTechs are leading the global landscape, with more than 50% of the VC funds raised, followed by USA and India. India’s Byju’s became world’s most valuable EdTech ($16.5bn) with their recent $350 million Series F fundraising.