Job and Talent Tech 3x 'crowding out' Post Secondary Innovation Funding

EdTech is accelerating from early childhood to lifelong learning, but where do we draw the line between learning and earning? Job and talent tech are attracting 3x venture capital and growth equity than post-secondary EdTech, as the 'Skills versus Degree's' narrative meets employer sponsored micro-credentials and a resurgent economy.

At the turn of the century, Education Technology or EdTech was nascent and K12 dominated for the next 10-15 years. Post-Secondary EdTech, led by MOOCs, OPMs, Bootcamps and UpSkilling Marketplaces took massive share of venture and growth investment from their K12 peers in the second decade (2010-2019). Around 2015, as K12 handed the lead to Post Secondary EdTech, a new wave was building, this time outside the boundaries of ‘education’ and most notably at the time the form of milestones such as LinkedIn’s acquisition of Lynda.com. The press release shared how ‘lynda.com’s high-quality content provides an opportunity for members to easily gain the professional skills they need to get hired and advance their careers‘. That was six years ago.

Many in education see an ‘inside-out’, formal qualifications centric perspective, noting the dissolving boundary between Vocational and Higher Education let alone the new wave of upskilling, jobtech and human capital centered technology clearly focused on the employer, employee and candidate alike. ‘Learners and Earners’ meanwhile see the full picture, following a spectrum of lumpy and expensive formal credentials to a crowded marketplace of upskilling options and employer-sponsored initiatives to upskill, reskill and retain.

The HolonIQ Intelligence Platform snapshot below shows the quarterly trend over the last five-years of Venture Capital and Growth Equity investment in EdTech and TalentTech/HR Tech/JobTech but exclude K12 and Early Childhood/Pre-K to take that same ‘Learner and Earner’ perspective. Post Secondary/Higher Education investment is highlighted in green and Workforce (TalentTech/HR Tech/JobTech) in blue.

$24B of private funding has fueled the Workforce sector over the past 5 years, more than 3x Post Secondary/Higher Education. We’ve seen waves of investment over that period waning through a trough when COVID hit, then an immediate funding surge mid 2020 when governments and employers everywhere demonstrated very strong demand for short-form digital upskilling alternatives and 2021 has peaked to all-time highs.

The ‘share’ story fluctuates over time, withPost Secondary/Higher Education averaging just 25% funding share to their Workforce (TalentTech/HR Tech/JobTech) peers who are taking 80-90% share through the last two quarters.

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Segmenting the Global Learning Landscape to identify the boundary spanning clusters between EdTech and Workforce

HolonIQ’s Global Learning Landscape is an open-source taxonomy for the future of education, providing a common structure and language for identifying, tracking and making sense of the volume and complexity of innovation happening in ‘learning and earning’ globally. Whilst the taxonomy provides a well-defined, robust, accessible and community enabled segmentation, we’ve long wrestled with the boundaries between ‘education’ and ‘work’.

For example, when our Intelligence Unit are focusing their analysis on a widely accepted definition of ‘EdTech’, they generally include the UpSkilling, Internships, Apprenticeships, Mentoring and Wellness clusters from the Workforce and Talent and Skills and Jobs sub-sectors. Each of these clusters could be bifurcated into either EdTech or Workforce but innovation as we have said before is often messy not MECE, as are the formal and informal boundaries between secondary and post-secondary, vocational and higher education.

The Global Learning Landscape was built and is maintained with extensive community engagement and mindful that a significant amount of innovation impacting the formal education sector originates from clusters such as Workforce Planning, Talent Acquisition, Capability Development, Performance Management or Gigs that would normally sit outside our classic ‘EdTech’ definition.

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Record, US led investment across Post Secondary EdTech + Workforce

The overall EdTech investment landscape is generally dominated by China with India close behind the US, together the three economies dominating Global EdTech Venture Capital and Growth Equity investment. However, when we exclude K12 and Early Childhood from the picture and bring this together with a broad Workforce ecosystem, we see a completely different regional picture.

North America (in blue) dominates investment across Post Secondary + Workforce technology, representing nearly 60% of all private funding. East Asia (in green) which includes China, is 2.5x behind the US, but still representing just over 20% of private funding. Europe is a little over half of East Asia’s investment at nearly 13% of the total and in turn more than 3x South Asia which includes India. Latin America, the Middle East and Africa represent just under $1B of investment over the last five years, powering impressive early-stage innovation and in many respects the foundations of more ambitious leap-frog strategies.