VCs pour funding into edtech startups as COVID-19 shakes up the market

A few weeks back, The Exchange looked into the pace of edtech exits, noting that over time, the sector has delivered rising exit volume. All startup verticals want to demonstrate a history of liquidity, so you might imagine that even before the COVID-19 pandemic, edtech fundraising was rising due to its improving exit profile.

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And dollars invested into edtech startups did increase, with 2018 and 2019 recording historically elevated results concerning edtech venture capital deals and venture capital dollars invested.

However, with COVID-19 pushing more students to learn from home and forcing schools to invest in new tooling and other digital capabilities that support remote-learning, a strengthening exit market and a market shift toward edtech services has led to an explosion in venture capital investment in the sector.

According to CBInsight’s data concerning the state of edtech venture capital activity, startups in the sector have already surpassed their 2019 venture capital dollar tally and are on track to set a new record in 2020, besting even 2018’s elevated result. Whether more total edtech deals will be closed in 2020 is less clear, but if current pace holds, 2020 should come somewhat close to 2018’s edtech deal count.

What’s driving the huge boom in edtech’s venture capital results? Let’s dig into just that.

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