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Edtech in Review: the Lows, the Highs and the Future 2023

Pablo Langa
Founder and Managing Partner at EDT&Partners
December 29, 2022

As we enter 2023, I wanted to share my thoughts on the Edtech industry in the last months and what we can expect in the coming year. Here are some highlights and my complete review.

Content: The Lows, The Highs, The Future of Edtech in 2023 & Full Review

1. The Lows

  • Edtech stocks and valuations have been affected by the tech stock crisis.

Stocks like Coursera (-51.75%), D2L(-51.68%), LTG(-36.25%), 2U(-67.38%) are all down heavily since January 2022. Few companies have managed to grow like Pearson which has experienced a +50% growth since the beginning of 2022.

2. The Highs

  • There are pockets of hope — Southeast Asian markets and the Middle East have demonstrated to be more resilient.

For example, Dubai-based school operator Taaleem successfully IPO’d on November 18, raising $204M in capital close to the billion-dollar valuation mark ($817M).

  • Edtech is entering a new phase of focus and consolidation. Not only in terms of markets but also in terms of product outcomes.

The recent acquisition of LearnPlatform by Instructure is a good indication of this trend.

3. The Future of Edtech 2023

  • The next generation of AI will bring great opportunities to augment teacher, student, editor, creator, and tutor needs. We are very excited to see this next wave of products make a positive impact on global education through technology in the coming year.

4. Edtech in Review

from Pablo Langa, Founder and Managing Partner, EDT&Partners

2022 Review

As we reflect on the past year in Edtech, it’s essential to consider the various factors that have impacted the industry. While the COVID-19 pandemic has presented challenges and opportunities for Edtech, it is not the only factor influencing the sector today— we need to consider the impact on emerging markets and the trends that are shaping the industry. As we move into the new year, it’s important to understand the current state of the Edtech industry including the opportunities and challenges that lie ahead.

The most obvious low for Edtech this year was that valuations and stocks did not perform countercyclically this year. At the beginning of the year, there was hope that Edtech stocks would not be affected by the overall tech stock crisis, as the industry had largely managed to remain profitable and achieve significant growth during the economic downturn of 2008. However, the Edtech sector has now matured and is more exposed to global trends. Stocks such as Coursera (-51.75%), D2L (-51.68%), LTG (-36.25%), and 2U (-67.38%) have all declined significantly since January 2022, with the exception of Pearson, which has seen a 50% growth since the beginning of the year.

Emerging regions have also been impacted. Brazilian organizations ARCO Educacao (-44.57%) and Vasta (-9.81%), both listed on NASDAQ, have struggled. In addition, Byju’s stagnant growth and large losses ($575M USD) during its overdue 2021 audit have added stress and pressure to the sector.

However, there are pockets of hope and opportunity in the challenging year of 2022. Southeast Asian and Middle Eastern markets have demonstrated resilience. For example, Dubai-based school operator Taaleem successfully IPO’d on November 18, raising $204M in capital close to the billion-dollar valuation mark ($817M).

The Future 2023

The coming year 2023 is likely to see a focus on consolidation and a greater emphasis on engagement and educational outcomes. Major players are likely to continue de-investing or go private, while opportunities for discounted international acquisitions may arise, particularly in mature segments such as ELT, STE(A)M, and upskilling. The recent acquisition of LearnPlatform by Instructure is a good indication of this trend.

Additionally, the next generation of AI is expected to influence the development of new products, such as ChatGPT, which has the potential to assist teachers, students, editors, creators, and tutors. We look forward to seeing these products make a positive impact on global education through technology in the coming year.

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