The education technology (edtech) industry refers to the integration of digital tools and processes to improve learning environments. Currently valued at 89.07 billion USD, the market is expected to grow at a compound annual growth rate (CAGR) of 18.1% to 285.23 billion USD in 2027. Edtech has become increasingly more prevalent as COVID-19 and ensuing school closures have forced education systems globally to shift to an online format.


The industry can be broken down into three large segments for which products and services are designed: junior school, senior school, and higher education. While the preschool segment is projected to grow at the fastest rate with its focus on app-based learning for younger students, the senior school segment currently accounts for the largest revenue with a 42% market share, providing experiences such as virtual field trips, online collaboration for group projects, and digital lab-based experiments. The higher education segment is the most heavily funded with the goal of connecting students to employment opportunities, as well as preparing students for them. The concept of lifelong learning using Massive Open Online Courses (MOOCs), the best example of which being The Open University, has also been a growing trend among adults, allowing for increased flexibility. The number of partnerships between edtech startups, content developers, and educational institutes is projected to increase through M&A.


One major tailwind accelerating progress in the industry has been quarantine measures related to the pandemic. COVID-19 outbreaks caused school closures in 190 countries, impacting 1.6 billion learners globally. The transition to fully remote learning has required a fundamental shift in the way that edtech tools operate in the classroom, resulting in the number of worldwide education apps downloads, such as Google Classroom, surging 90% since Q4 of 2019. Teachers have also shifted their focus from just one online learning tool to building a collection of edtech tools, better suited to serving their different teaching needs.


Scientific Learning Corporation, a company that develops neuroscience-based software and educational services designed to increase human learning, announced on September 14th 2020, that it has been acquired by an affiliate of Carnegie Learning, Inc a provider of textbooks and maths learning software for grades 6-12, in an all-cash merger transaction valued at approximately 15 million USD. The combination will strengthen the edtech portfolio of both entities to further drive their joint mission of improving student learning outcomes through leading-edge technology built from and validated by rigorous research.


The merger between Carnegie Learning and Scientific Learning is another example of edtech startups accelerating growth through the integration of complementary capabilities. In today’s challenging environment, Carnegie Learning’s blended offerings are proving highly effective, particularly as schools continue to operate in a hybrid and remote learning environment. Scientific Learning’s offerings complement Carnegie Learning’s portfolio of research-based offerings that offer educators leading-edge instructional software and advanced data-driven insights.

Post-COVID 19, remote learning is expected to still play a major role in education. For example, hybrid learning models will reinforce the belief that digital tools can complement in-person learning. More than 90% of teachers believe that tech in the classroom is here to stay. Universities, in particular, will likely adopt this model in order to make classes available more broadly and on a more flexible basis.


As internet connectivity becomes more easily accessible globally, as artificial intelligence and machine learning platforms become more advanced, and as devices become more widespread in the classroom setting, technology is set to penetrate the education industry even further, spurred onwards by the pandemic. Edtech will be a substantial component of the movement to ‘reskill’ workers in the digital revolution. Therefore, the edtech market is expected to continue to grow at a rapid pace, even after children return to school. In that vein, mergers and acquisitions in the industry will likely lead to additional consolidation between new startups, edtech monoliths, and educational institutions at an unprecedented rate.


By Toby Pallister

Sector Head: Daniel Regan