Online education startups globally have raised $4.89 billion from investors, surpassing 2019 with three months to go as the coronavirus pandemic has boosted learning from home and made it mainstream overnight.
Ed-tech startups have raised $4.89 billion across 377 rounds this year, the second highest amount in a year, but less than the $6.2 billion raised across 648 rounds in 2018, according to a report from CB Insights, a market intelligence platform.
Compared to this year, ed-tech startups raised $4.8 billion across 604 rounds in 2019. Despite the funding boom this year, there were only 377 rounds -- the lowest in four years -- indicating larger cheque sizes per startup, with winners raising an outsized portion of the total capital.
China’s Zuoyebang -- the country’s largest online learning platform for K12 (Kindergarten to Class 12) students -- raised $1.83 billion, the most by a single ed-tech startup this year, from investors such the SoftBank Vision Fund, Sequoia Capital and Qatar Investment Authority
India’s Byju’s is second, having raised $1.5 billion this year from Tiger Global Management, DST Global, Silver Lake Partners, among others.
Eight out of the 10 top-funded ed-tech players are from China, indicating the maturity and size of the market.
The most-funded startups are those that are using mobile-based tools, augmented reality or virtual reality in their products, and helping learners of all ages learn programming and other technological skills, the report said.
For example, Hong Kong-based SnapAsk lets students take a picture of their homework questions, uses artificial intelligence (AI) to understand the problem, and connects students to a tutor 24/7 via a mobile chat. India-based Doubtnut does something similar and is in talks to be acquired by Byju’s, according to media reports.
The COVID-19 pandemic has made online learning necessary, and startups are innovating to make the experience as immersive as possible, even if it is virtual by trying to recreate the offline experience, by using the scale that the internet provides. This involves text-based learning, live quizzes, gamifying learning, and weaving storytelling into the process.For example, US-base ZSpace uses AR/VR for educational and technical skills development, such as for workers to practice assembly or disassembly of parts for preventive maintenance at advanced manufacturing facilities. Similarly, Y-Combinator funded Arist provides text message-based learning and claims a course completion rate of 94 percent, being particularly popular among Gen-Z and millennial learners.