The edtech market for adults is developing as swiftly as it is expanding. M&A opportunities, geographic hotspots, user expectations, and the corporate market are all undergoing substantial change.

The education-to-employment sector of the edtech industry, which caters to adult learners, has experienced tremendous expansion during the past several years. As thousands of new competitors enter the market, incumbent companies receive a massive infusion of capital, and investors wonder what scalable and lucrative business models in the sector look like, valuations for these education-to-employment edtech firms have seen a roller-coaster ride. Currently, there are numerous edtech “unicorn” start-ups with valuations over $1 billion.

Here are five edtech trends we’ve noticed that market participants may want to take into account as they decide how to proceed:

1. With Fourth Industrial Revolution

Employee retraining and upskilling is necessary in the eyes of big corporations.

A key difficulty for many businesses is finding and keeping talent in the US, where a record number of jobs are unfilled as a result of a tight labour market. To reduce employee turnover and fill talent gaps, big firms including Amazon, Walmart, Target, and Google have committed significant expenditures in workforce education and development programmes. Some organisations, such as Walmart, are integrating these programmes into their diversity, equality, and inclusion (DEI) strategies. 

Companies that provide online education are enhancing and increasing their enterprise services to fulfil the demand for upskilling and reskilling. All but one of the 15 adult education companies with the greatest financing in 2021 offer an enterprise service. Even firms with an initial consumer-focused strategy, like Coursera, have dramatically boosted their income from business clients in recent years.

2. The shift of focus from EduTech to LearnTech

With ambitions for the world, India overtakes the competition in edtech.

Nearly three-quarters of all edtech venture capital funding in 2010 came from the United States. Investors began to focus on India ten years later.

Prominent edtech organisations, such as Udacity, Coursera, and edX, have shifted their investment attention to the large Indian market as regulatory headwinds in the Chinese edtech business worsen. In 2020, 63 percent of edtech funding came from the Chinese market; by 2021, less than 13 percent did. Education technology spending in India increased from $0.2 billion five years ago to $3.8 billion and 18 percent of all investments globally in 2021. to paraphrase a phrase from the English language,

At the same time, locally based Indian edtech players like Emeritus have amassed billion dollar valuations and started to acquire businesses in the US market.

In order to succeed in the face of international competition, edtech companies can preserve their home market while customising a growth strategy for each target nation.

3. The Dynamism in Edutech due to IR 4.0

To attain size and efficiency and compete the changing ecosystem, edtech players are joining forces and forming partnerships.

The lifetime value of a customer is the amount they are worth to an edtech company beyond their acquisition cost. Financial filings reveal that in recent years, the sales and marketing expenses at several of the biggest edtech companies have varied from 20 to 60 percent of revenue. 2

Some edtech companies are looking to M&A in the hopes of achieving economies of scale as they look for long-term solutions to the industry-wide issue of high customer acquisition costs (CAC). The purchase of edX, a nonprofit organisation sponsored by Harvard and MIT, was announced by 2U in June 2021 for $800 million. Approximately 40 million registered users, a powerful consumer-facing brand, and hundreds of university partners are all made available to 2U as a result of this transaction. These resources provide 2U a large footprint in emerging countries outside of the US and may lower CAC as it develops its free-to-degree approach.

Other significant mergers and acquisitions have recently occurred in the edtech industry. For instance, a $3 billion merger between Anthology and Blackboard was approved. Ample capital has made it possible for all of these mergers and acquisitions. However, after a contract has been inked, businesses must integrate their respective operations to reap the promised benefits.

4. Opening the floodgate of opportunity

Capital is flooding in at a record-high rate.

Numerous businesses are striving to continually upskill their personnel due to the rapid advancement of technology and industry digitization. At the same time, broadband connectivity has grown more accessible and technological advancements in distance learning have been made. These changes have contributed to the edtech sector’s growth; venture capitalists (VCs) invested $20.8 billion in it globally in 2021.1. They invested more than 40 times that amount in 2010.

Private businesses are still raising financing at double-digit revenue multiples even as public values have recently started to soften. Professors, administrators, students, and workers have become increasingly accustomed to using education technology as a result of the epidemic, which has attracted VCs to the sector. We think that these practises will persist and that online learning will soon become the standard.

5. Reskilling a continous process and not a One stop Graduation

The focus of edtech leaders is on fostering career advancement.

More than 3,500 edtech students were polled in 2021 by McKinsey. Many, we discovered, were driven by the potential to launch their careers and were looking for a sense of community.

New technologies are finding their way into education, including web3, augmented and virtual reality, AI, and machine learning. But according to our research, edtech companies shouldn’t rely solely on content and technology. The value-added services that learners desire include individualised coaching, interview practise, and assistance with finding employment.

Some firms in the edtech industry are acquiring companies and enhancing their internal capabilities in order to create more comprehensive user experiences. For instance, upGrad purchased a hiring and recruiting firm in India to assist its students in developing their professions. To give students access to a community rather than to sell them courses, On Deck developed a business strategy in the US. Online and hybrid learning students at Arizona State University can get free counselling, mentorship, and crisis intervention assistance.