Higher Ed Tech Investments Soar

  • By Dian Schaffhauser
  • 01/30/20

According to a report that tracks global learning tech investment trends, investments directed to higher education technologies saw a substantial bump in the last year, while investments specifically in Pre-K–12 sunk dramatically.

Both were overshadowed by the corporate and consumer learning segments.

The latest "2019 Global Learning Technology Investment Patterns" report from Metaari declared that a "breathtaking $18.66 billion flowed to ed tech companies around the world in 2019" — the "highest in the history" of the industry, "[blasting] past the records set between 2015 and 2017 and far [outpacing] the historic high in 2018."

According to a report that tracks global learning tech investment trends, investments directed to higher education technologies saw a substantial bump in the last year, while investments specifically in Pre-K–12 sunk dramatically.

Total global learning tech investment by market segment. Source: "2019 Global Learning Technology Investment Patterns" from Metaari

As Metaari CEO and Chief Researcher Sam Adkins noted, funding for higher ed-specific tech companies increased in 2019 to $740.6 million, 80 percent higher than the $406.8 million given to these companies in 2018.

Meanwhile, funding to the Pre-K–12 sector did the opposite, dropping by almost half in 2019. While investments to Pre-K–12 in 2018 reached $1.4 billion, that declined to $855 million in 2019, a reduction of 39 percent.

Yet, overall, both markets together made up a small fraction of the total investments plowed into ed tech for the year — just 8.6 percent (compared to 21.4 percent in 2017 and 11.2 percent in 2018). Higher ed received 4 percent of total funding for the year, and Pre-K–12 took 4.6 percent. The cause? There may not be anything in particular. As Adkins wrote, "Investment trends are inherently unpredictable, and this could be an anomaly."

According to a report that tracks global learning tech investment trends, investments directed to higher education technologies saw a substantial bump in the last year, while investments specifically in Pre-K–12 sunk dramatically.

Total global learning tech investments by learning technology type. Source: "2019 Global Learning Technology Investment Patterns" from Metaari

Likewise, he added, those percentages "are heavily skewed by the massive investments going to consumer and corporate deals." Corporate learning investment drew $10.4 billion for the year (up from $6.2 billion in 2018), while consumer learning investment attracted $6.7 billion (down from $8.6 billion in 2018)

Adkins has divided the ed tech product landscape into 10 broad categories, three that are "legacy" and seven that are "next-generation." Legacy products include self-paced courseware, digital "reference-ware" and collaboration-based learning. The next-generation products cover:

  • Cognitive learning;

  • Artificial-based learning;

  • Mixed reality learning;

  • 5G and mobile learning;

  • Location-based learning;

  • Game-based learning; and

  • Educational bots (both physical and virtual).

Adkins' report declared three "big winners" for overall 2019 investments:

  • AI-based learning (which attracted $3.7 billion, most obtained by U.S. companies);

  • Collaboration-based learning (which wooed $3.3 billion — most going to companies in China); and

  • Mobile learning (which won $3 billion); here, the largest investments were drawn by China-based Zhihu, which develops a "homework helper" app, and India-based Aakash Education Services, which does exam prep in person and virtually.

Other next-generation ed tech drew lesser amounts:

  • Over $2.6 billion went to mixed reality learning companies — both augmented and virtual — in 2019, up from the $2.2 billion invested in 2018.

  • Game-based learning companies attracted $2.5 billion in 2019, up a bit from the $2.25 billion for 2018.

  • Cognitive learning, which encompasses products designed to improve brain functions in "relatively healthy people" and products designed to mitigate brain deficiencies or impairments, drew $1.3 billion in 2019, compared to $839 million in 2018.

  • Educational bot firms saw less in 2019 ($736.5 million) than 2018 ($1.3 billion). Adkins suggested that highwater mark for 2018 was due to a single deal — the $820 million invested in UBTECH by Chinese multination Tencent.)

  • Location-based (also known as spatial computing) learning companies enticed $659 million in 2019, up from $507 million in 2018.

Two of the legacy segments — the reference-ware and self-paced courseware — have been left in the dust over the last year as investors have sought out opportunities with the newer product categories.

In the reference-ware group, nearly $556 million was invested, the report stated, a slight dip from the $570 invested in 2018. As Adkins explained, "It is challenging for developers to generate revenues for this type of learning technology in the presence of a large amount of free content on the market."

In the self-paced courseware category, four companies garnered the bulk of the investment: Coursera, Degreed, FutureLearn and OpenSesame. Combined, they drew $272 million of the $312 million invested in 2019. This was a market that drew a "staggering $2.1 billion in 2015," Adkins pointed out.

The complete report is openly available through the Serious Play Conference site.

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