Global EdTech VC Funding - Q1 2022 Update

Global EdTech secured $4.5B of Venture Funding in Q1 2022, up on Q1 2021, but representing a slightly lower run rate than the full year for 2021. Take a step back to include workforce training, performance management and capability development and capture new forms of 'growth debt' financing and you'll find nearly $7B of growth capital in Q1 re-imagining how we up-skill, re-skill and unleash human capital.

The world continues to evolve, markets are changing and for now, EdTech is still enjoying strong support and demand from investors. Q1 2022 was whispered to be ‘soft’ and ‘waning’ after a record-setting 2021, and in some markets that was certainly the case. Most major markets did gently moderate investment levels, however, they remain very high compared to long-term historical levels and whilst the market has strong momentum, there is more uncertainty in today’s financial markets than this time last year.

Through this note we’ve shared our traditional quarterly chart pack on Venture Funding in EdTech, adopting strict definitions to isolate Venture Capital deployed within a generally accepted definition of “Education Technology”, spanning early childhood, through K12 and post-secondary into traditional workforce training. In addition this time however, directly below we’ve shared a chart from our Analytics Studio (Customer Link) that expands beyond our strict EdTech definitions into broader adjacencies that capture investment in categories some would argue like beyond EdTech such as Workforce Capability Development, Performance Management and Talent Acquisition. In addition to broadening the scope, we’ve seen an increasing trend in Growth Debt Funding and Private Equity meets Venture Capital that we have traditionally excluded from strict ‘EdTech VC’ analysis.

This broader, more expansive analysis represents nearly 2x more funding than our traditional strict EdTech definitions, a total of $95B of growth funding over the last 5 years and $7B of investment in Q1 2022 versus $4.5B with a narrower, EdTech focused lens. With this insight in mind, we’ll be holding taxonomy workshops through Q2 in New York, London and Sydney to refine the Global Learning Landscape and in turn, inform and re-shape the way we segment and analyze learning technologies and human capital development.

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$4.5B of EdTech Venture Funding for Q1 2022 (1 Jan-31 March). ‘Straight line’ momentum would deliver around $18B for the full year.

Q1 2022 is a strong start and on a straight-line, momentum projection, would see the 2022 full year come in around $2B less than the record-setting $20.8B of 2021. With more uncertainty than this time last year, it’s more likely that investment slows down through 2022 than the likelihood that it accelerates and outperforms the prior year.

$4.5B of EdTech Venture Funding for Q1 2022. India is surging, ByJu’s, Emeritus and LEAD School Led. US and EU holding strong run-rates.

India led Q1 2022 EdTech Venture Funding globally, for the most part powered by a handful of mega rounds. Chinese EdTech investment is almost all together absent with some capital fuelling digital up-skilling. Europe is expanding its share, again powered by mega funding and the US is holding a very strong position, albeit slightly down on 2021 run rate.

The rapid rise and sudden decline of China’s investment leadership in EdTech has come to an abrupt end, for now. Following the massive expansion of US investment through 2021, India has risen to lead the league tables in Q1 2022. India is following the dominant Asian venture pattern of mega funding a few Unicorns, contrasted against Europe and the US which continue to fund their giants, in addition to a broader base of mid to late-stage growth companies with generally more diversification than Asian peers. Markets such as Singapore, Canada and Brazil lead a strong hold from the ‘rest of the world’.