The potential for growth in a startup focused on serving individual learners – rather than large, financially constrained institutions – presents a compelling opportunity that draws significant investor interest.

Coupled with the rapid shift to remote learning spurred by the recent pandemic, it’s understandable that companies such as Outschool and ClassDojo have begun to realize profitability, while ventures like Quizlet and ApplyBoard have achieved valuations exceeding $1 billion.

The previous year witnessed an unprecedented surge in venture capital investment within the sector. PitchBook data indicates that edtech startups globally secured $10.76 billion in funding last year, a substantial increase from the $4.7 billion recorded in 2019. Although final reporting figures may shift this total, venture capital funding has more than doubled since the onset of the pandemic. Within the United States, edtech startups garnered $1.78 billion in venture capital through 265 deals in 2020, compared to $1.32 billion in the preceding year.

A recent survey gathered insights from thirteen prominent edtech investors regarding how the expansion of lifelong learning is transforming the industry. Considering the unexpected consequences of pandemic-related lockdowns – like the disappearance of snow days and the surge in home baking – it’s clear that education now extends well beyond traditional school schedules. As the needs of learners become increasingly diverse and complex, the edtech companies supporting them are evolving accordingly. 

This theme consistently emerged in the survey, highlighting a change in investor strategies concerning hybrid learning models. The future of education in a post-pandemic world will likely be intricate and highly competitive, with a growing number of well-funded edtech companies vying for prominence. While we previously surveyed investors about their expectations in July, the landscape has shifted considerably. Predictions of a complete disruption to higher education have not materialized, and current forecasts suggest a return to pre-pandemic learning formats for K-12 students as vaccinations become more widespread. 

This creates a challenge for startups: if 2020 was characterized by the adoption of video-based instruction, what developments will define 2021? Will we see greater integration among various edtech applications? The emergence of innovative student collaboration platforms? Are employer-driven skills development programs and a renewed focus on personal growth expanding the total addressable market for edtech?

Below is a list of the investors we consulted, along with their respective areas of focus and expertise:

• Deborah Quazzo, managing partner, GSV Ventures (an education fund backing ClassDojo, Degreed, Clever)
• Ashley Bittner, founding partner of Firework Ventures (a future of work fund with portfolio companies LearnIn and TransfrVR)
• Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)
• John Danner, managing partner, Dunce Capital (an edtech and future of work fund with portfolio companies Lambda School and Outschool)
• Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multi-stage generalist fund with investments including Forage, Clever, and Outschool)
• Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly-valued companies including Byju’s, Newsela, and Masterclass) 
• Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy, and BibliU) 
• Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer, and Aula)
• Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)
• Daniel Pianko, co-founder and managing director, University Ventures (a higher ed and future of work fund that is backing Imbellus and Admithub)
• Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet, Duolingo)
• Andreata Muforo, partner, TLCom Capital (a generalist fund backing uLesson)

Deborah Quazzo, managing partner, GSV Ventures

Regarding the future of edtech as students return to in-person learning, and considering the increased familiarity with remote options, what emerging ideas do you anticipate gaining traction?

For the K-12 sector, the integration of digital tools and platforms will be widely accepted as standard practice – exemplified by companies such as Lexia, DreamBox, and Nearpod. This shift may lead to increased adoption of resources historically confined to classroom use, like those offered by Lexia. Given students’ newfound proficiency with platforms like Zoom, we could see a rise in synchronous learning opportunities delivered via video conferencing, extending beyond traditional academics to include enrichment activities like music and dance. With schools now possessing comprehensive technological infrastructure, the possibility of implementing structured home-based learning programs – recognizing that students dedicate a significant portion of their time at home – may also be explored.

What are the most significant challenges facing early-stage edtech companies aiming for expansion? Which opportunities are diminishing as the edtech landscape evolves?

Edtech businesses should avoid replicating existing solutions. We’ve observed a proliferation of over 20 creator-focused learning platforms spanning all age groups, alongside established players like Teachable, yet few possess a sustainable competitive advantage in my assessment. I believe the window for simply copying existing models may have closed. As current market gaps become filled with competition, new opportunities will likely arise. Cutting-edge technologies – including artificial intelligence, natural language processing, machine learning, and virtual reality – will continue to drive innovation. A substantial opportunity remains to improve competency attainment across all levels of education, from pre-K to higher education and professional development, as current efforts are insufficient.

In what ways has the recent surge in edtech influenced your investment activity? Has the increased attention from non-specialist investors led to inflated valuations, or is overall market expansion benefiting all participants?

Throughout the pandemic, we conducted over 800 virtual meetings with founding teams globally. We made investments in 14 new companies and are currently finalizing funding rounds for two more. Valuation pressures are present throughout the technology industry. I would contend that education still exhibits comparatively lower valuations than the broader tech sector. A key question for edtech is whether the total addressable market can support the emergence of a $100 billion company within the sector.

Ashley Bittner, founding partner, Firework Ventures

How do you envision the future of educational technology as students return to in-person learning? With the increased acceptance of remote learning, what emerging ideas do you anticipate gaining traction?

From the perspective of our investment strategy, I foresee a shift in the responsibilities of companies regarding their employees. Prior to the pandemic, projections indicated that approximately one-third of the American workforce would require new employment by 2030. Businesses consistently identify deficiencies in employee skills as a primary concern impacting their ability to remain competitive. We anticipate that employers will increasingly assume greater accountability for enhancing the skills of their existing personnel, integrating training directly into the work experience – a departure from solely seeking new hires to fill skill gaps. Degreed represented an initial phase of this trend, while Learn In exemplifies the subsequent stage in this development. As organizations seek to deliver more skills-based training, as opposed to simply ensuring regulatory compliance, we expect a greater reliance on external resources, as many CEOs acknowledge their current internal capabilities are insufficient to meet the demands of workforce reskilling. Furthermore, we believe a significant portion of this training will be delivered online and during employees’ working hours, to overcome the time constraints that can create inequities. I also believe virtual reality platforms will see increased adoption as we move toward more digital and remote learning environments, as demonstrated by companies like TRANSFR. These insights are supported by research conducted by McKinsey.

What are the most significant challenges facing early-stage edtech companies as they attempt to grow? Which opportunities are diminishing as the industry evolves? Within the US pre-kindergarten and K-12 sectors, substantial customer fragmentation – encompassing 16,000 school districts and over 100,000 schools, with even greater fragmentation in pre-K due to limited public funding – presents a major obstacle, alongside lengthy sales processes, budgetary constraints, pedagogical considerations, and regulatory requirements. The total addressable market is also a factor. Consumer expenditure on education remains comparatively low when measured against other markets. However, there are emerging opportunities, including improved access to broadband internet and increased availability of devices. In the realm of future of work, there is growing acknowledgement that reskilling and upskilling are essential for business success, that company culture is a key component of competitive advantage, and an increased emphasis on diversity, equity, and inclusion.

Jomayra Herrera, principal, Cowboy Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?
I anticipate that activities that are inherently more effective when conducted face-to-face will return to in-person formats – things like athletics, musical instruction, and other extracurricular pursuits. I believe educators will continue utilizing new technologies adopted during the pandemic that have proven beneficial to their teaching methods, while less essential tools will likely be discontinued. Cowboy Ventures holds the belief that supplementary education options (such as Juni Learning, Reconstruction, or Outschool) will largely remain online, as parents appreciate the convenience of eliminating travel to learning centers and these platforms can provide engaging learning experiences.
What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?
For businesses concentrating on K-12 students, penetrating school systems and districts remains a significant challenge due to extended sales processes. This difficulty is likely to increase as local and state funding becomes more constrained. Regarding diminishing opportunities, I foresee that tools lacking a genuine benefit for educators, students, or parents, or those without proven positive effects on student achievement, will begin to decline in use. Following the pandemic, consumers appear more knowledgeable about the potential of technology and demonstrate less patience for tools that don't deliver measurable results. For companies focused on adult learners, the primary obstacle continues to be attracting customers and establishing a trustworthy brand.
What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?
I sincerely hope that the pandemic has highlighted the vital role educators play in our children’s development and that we will see increased compensation for teachers. Encouraging our most talented individuals to enter and remain in the teaching profession is a key step toward improving education.
Within K-12 education, I foresee greater acceptance of technology in the classroom, with technology being integrated alongside in-person instruction to provide educators with the data necessary to personalize learning.
In higher education, I anticipate a continued expansion of online learning options for adults seeking to enhance their skills or acquire new ones. There will be increased access to effective and reasonably priced self-paced online learning opportunities.

John Danner, managing partner, Dunce Capital

How do you envision the future of educational technology as students return to in-person learning? With the increased familiarity of remote learning, what emerging ideas do you anticipate gaining traction?

Within the K-12 sector, the educational landscape will likely remain largely consistent, as most parents primarily value schools as a source of childcare for their children. However, a segment of parents are reevaluating education following a year of direct observation of their children’s daily learning experiences. I believe we’ll observe a continued separation of childcare services from academic instruction. I previously detailed this trend in a published article, and its progression has notably accelerated this year.

What are the most significant challenges facing early-stage edtech companies as they strive for growth? Which opportunities are diminishing as the industry evolves?

Vocational training programs employing a deferred tuition model—where payment is required only upon securing employment, as seen with Lambda or SV Academy—must prioritize successful job placement for their graduates. Lambda’s recent implementation of a fellowship program has proven effective in facilitating substantial scaling. For companies focused on early childhood and K-12 online education, success hinges on establishing new parental routines and cultivating consistent engagement, similar to the approach taken by Outschool. In the realm of continuing education for seniors, such as that offered by GetSetUp, securing reimbursement pathways through healthcare providers is likely to be crucial.

Looking ahead to five or more years, once the pandemic has become less prominent, what changes do you foresee in the field of education?

I anticipate a continuing shift towards a greater proportion of academic activities taking place online. Currently, this primarily involves live, interactive experiences with direct human involvement. However, within five years, I expect to see a considerable impact from artificial intelligence taking over many tasks currently performed by educators.

Mercedes Bent, partner, Lightspeed Venture Partners

What changes can we anticipate in edtech as students return to in-person learning? With the increased acceptance of remote learning, what emerging ideas might gain traction?
Educational institutions will need to address hybrid learning models – many are already doing so – and provide families with considerably more adaptable learning options. Charter schools are currently collaborating with new companies to deliver educational services, and we might observe a rise in collaborative efforts between the private sector and public school systems.

What are the most significant challenges facing early-stage edtech companies aiming for growth? Which opportunities are diminishing as the industry develops?
I believe there's a substantial potential for learning platforms centered around social interaction and community, built on top of existing educational materials, particularly within the realm of adult education. While tutoring will always be in demand, the conventional approach of individual instruction and repetitive exercises is likely to change. Increasingly, educational tools will focus on delivering tutoring through interactive, stimulating asynchronous content as the core offering, with live assistance available when learners encounter difficulties. We're also seeing a shift towards larger, live online learning environments, as demonstrated by companies like Fiveable.

Ian Chiu, managing director, Owl Ventures

How do you envision the future of educational technology as students return to in-person learning? With the increased familiarity of remote learning, what emerging concepts do you anticipate gaining traction?

We anticipate that educational institutions will, going forward, require the capacity to deploy technology on a large scale to ensure uninterrupted learning for their students. Consequently, solutions offering both online and offline capabilities, allowing for a smooth transition between in-person and virtual environments, are expected to become increasingly common even after students fully return to classrooms.

As remote learning becomes more widespread, we foresee a rise in appealing direct-to-consumer (DTC) educational products, as families explore supplementary and, in some instances, alternative options to traditional schooling. This model is already well-established in international markets like China and India, where we’ve observed highly successful DTC edtech businesses. We believe similar opportunities will emerge for edtech companies to connect directly with consumers within the U.S. Over the last year, we’ve made several new investments in DTC companies globally that serve students and families. Recently, we announced our investment in uLesson, which has experienced 70% month-over-month growth through a DTC approach in Africa.

What are the primary challenges facing early-stage edtech startups aiming for growth? Which opportunities are diminishing as the industry develops?

We identify one of the major obstacles for early-stage edtech startups seeking to scale as effective market entry and adoption within a highly competitive landscape. This landscape includes established digital companies with strong brands and large, globally-scaled edtech organizations. A key strategy for early-stage companies is to clearly define their distinct value and convincingly demonstrate their effectiveness and results. We are firm believers that the most successful companies are those that can accurately measure educational outcomes and effectively communicate them to the market. At Owl Ventures, we collaborate closely with our portfolio companies on outcomes and efficacy, supported by our director of Outcomes and Efficacy, Malvika Bhagwat. We showcase the impact of our portfolio companies in our annual Education Outcomes report.

Looking ahead five or more years, once the pandemic is less prominent, what changes do you foresee in the field of education?

We expect edtech to remain a crucial component of education and schooling, even as the pandemic fades into the past, particularly given predictions from many experts of future periods requiring remote learning. Therefore, we anticipate increased adoption of solutions that can seamlessly integrate both online and in-person learning experiences. Furthermore, we’ve witnessed significant growth in digital education for graduate studies and professional certifications, enabling individuals to enhance their skills and knowledge without interrupting their careers. We believe this shift towards virtual delivery is permanent, as it provides more flexible and accessible learning opportunities while also generating valuable data for benchmarking and measuring outcomes, especially considering the substantial changes occurring in the workplace and demographics in the years ahead.

Jan Lynn-Matern, founder and partner, Emerge Education

How will the landscape of educational technology evolve as students return to in-person learning? Considering the growing familiarity with remote learning, what emerging concepts do you foresee gaining prominence?

The year 2020 brought substantial transformation to the education sector, with European edtech businesses experiencing a significant surge in demand.

Educational organizations globally were unexpectedly required to deliver learning experiences digitally. Consequently, demand increased for businesses specializing in learning experience platforms (Aula), digital content distribution (BibliU), and digital student recruitment (Unibuddy).
Simultaneously, numerous institutions of higher learning faced heightened financial challenges due to declining student enrollment. This led to an increase in public-private partnerships (PPPs) within higher education. PPPs assist universities in expanding their digital reach and diversifying revenue streams through the provision of accredited online education (Fourthrev).
Educational companies focused on direct consumers were able to fulfill needs unmet by traditional institutions. This resulted in considerable growth in demand for online courses (FutureLearn), career training (Jolt), online tutoring services (GoStudent), online study groups (Studysmarter), informal learning applications (Babbel), and educational entertainment for children (Yoto).
Governments worldwide confronted historically high unemployment rates and a widening disparity between the skills of the unemployed and the requirements of hiring companies. This spurred the development of government-funded initiatives for lifelong learning and a corresponding increase in demand for companies offering training aligned with employer expectations (Multiverse, Openclassrooms, IUBH).
The shift towards remote hiring, work arrangements, and training programs fueled demand for business-oriented learning communities (Sales Impact Academy), education intermediaries (such as U.S.-based Guild), and a wide array of remote productivity applications.

As we move into 2021, we anticipate that most of these trends will either persist or continue to develop.

Although many higher education institutions encountered difficulties adapting to digital formats and faced criticism from students, the sector as a whole has made considerable investments in its digital infrastructure. Long-term technology plans were compressed into one-year timelines. In a post-pandemic environment, universities will aim to maximize the benefits of these investments, including:

An expanded selection of courses in a hybrid format, facilitated by learning experience platforms – allowing students to seamlessly transition between in-person and online participation in tutorials, seminars, and lectures. This will be particularly advantageous for non-traditional students balancing study with family responsibilities and/or employment.
An even greater number of fully online degree programs, particularly geared towards adult learners but increasingly also attracting undergraduate students. PPPs established during the pandemic to support these programs are based on long-term agreements and are expected to endure.
Even with the pandemic subsiding, economic recovery will take time. A widespread economic rebound will require:

A significantly larger supply of concise, career-focused courses aligned with employer needs. We see substantial potential for programs that combine the immersive, career-oriented approach of a bootcamp with the credibility of university accreditation typically associated with a full degree. Professional learners generally favor accredited digital credentials over bootcamps.
Ongoing, substantial government investment in lifelong learning and education aligned with employer standards. To address the skills gap, governments should incentivize employers to fund vocational training. Drawing inspiration from the German dual study model, we expect to see more private education companies establish connections between employers and educational institutions to scale vocational training.
In some respects, edtech fell short of expectations in 2020. The gap between those with and without access to digital education widened, and issues such as Zoom fatigue, feelings of isolation, and inconsistent learner support led both parents and students to desire a return to traditional learning environments.

Nevertheless, 2020 established online learning as a mainstream option. Numerous adult learners utilized digital courses to acquire new skills and successfully transition to new careers; millions of children engaged in online communities and classes; and all education providers learned – through necessity – how to deliver and support online learning.

As the world settles into a new normal, consumers will seek the advantages of both in-person and online learning, and not all traditional educational institutions will be equipped to provide this. We are particularly optimistic about the potential of community-based live online learning. Companies that excel in this area combine the strengths of face-to-face and online education: first, a strong emphasis on building communities among online learners; second, access to the world’s leading educators leveraging the capabilities of the internet. This powerful combination can be applied to virtually any learning area and any age group, and we are eager to support companies in this space.

What is your outlook for the future of education in the next five years and beyond, as the pandemic fades from memory?

Three key macroeconomic factors are shaping the future of education:

1. Worldwide demand for higher education is projected to double by 2030, increasing from 200 million to 400 million learners.
2. A global labor shortage is expected to reach 85 million workers by 2030, representing 11% of the global workforce and $8.5 trillion in potential lost productivity.
3. The increasing digitization of both education and work, a trend accelerated by COVID-19.

Our investment strategy centers on supporting companies that bridge the gap between talent and opportunity, which we refer to as “engines of opportunity.” Specifically, we are enthusiastic about:

1. Vocational on-ramps: Businesses that offer scalable training programs designed to facilitate career transitions, aligning with employer needs and often funded by employers rather than students.
2. Challenger universities: Companies that fundamentally redesign higher education, innovating across technology, pedagogy, employer connections, and cost, with the goal of significantly improving and expanding access to higher education.
3. Workforce development companies: Businesses that assess employers’ current skill sets, identify career progression pathways for individual employees, and provide on-the-job training to support their advancement, serving as a crucial tool for closing the global skills gap.
4. Employer-university collaboration: Models that foster partnerships between leading brands – universities – and employers to better prepare students for the workforce.
5. Digital teaching and learning at scale: Companies that develop the technical infrastructure necessary to build, deliver, and support online learning providers on a large scale.
6. Revenue diversification in higher education: Businesses that enable universities to expand their reach, impact, and income by addressing new, previously inaccessible markets.
7. Community-based learning: Companies that integrate the power of community, technology, and world-class teaching talent to create exceptional learning experiences.

Benoit Wirz, partner, Brighteye Ventures

How will the landscape of educational technology evolve as students return to in-person learning? Considering the increased familiarity with remote learning, what emerging concepts do you foresee gaining prominence?

Before the recent global events, digital education was experiencing growth, but investment from consumers, businesses, and established educational institutions remained comparatively limited.

The pandemic dramatically highlighted this disparity, as approximately 95% of the world’s student population transitioned to online learning. Consequently, demand surged for both comprehensive digital learning platforms, such as Epic (a digital library for children) and YouSchool (focused on vocational skills), and tools designed to enhance blended learning within traditional settings – for example, Google Classrooms for primary and secondary education, and Aula for higher education. Citi/HolonIQ data indicates that digital learning now constitutes half of all learning activities, yet represents less than 3% ($160 billion) of total educational expenditure, creating a substantial $2.7 trillion gap.

As the pandemic’s impact diminishes, the rapid expansion of edtech will likely moderate, particularly for fully digital solutions, with the resumption of in-person schooling. However, growth rates will still exceed pre-pandemic levels, as increased awareness has reduced customer acquisition costs for edtech companies, and investment will continue to align with evolving, technology-driven learning preferences. Solutions adaptable for both classroom and home environments are poised to navigate this transition successfully.

Furthermore, heightened parental engagement in education, coupled with a greater understanding of online learning possibilities, will likely lead to a shift in children’s screen time, with a portion of the typical 2-3 hours per day dedicated to more enriching online activities that have emerged recently; screen time will increasingly be integrated into extracurricular pursuits.

We can also anticipate a rise in alternatives to conventional universities. Many students accumulate significant debt and lack practical skills after completing their studies. Shorter, more affordable options with clear career pathways, like IronHack and Lambda, will become increasingly appealing as routes to employment in rapidly evolving industries.

Lastly, there will be a growing emphasis on learning communities. While knowledge acquisition is achievable with sufficient study, maintaining motivation is a common challenge. Learning communities, such as Plato for engineering or Tandem for language learning, offer the potential to leverage social dynamics to foster sustained engagement in learning.

What are the primary challenges facing early-stage edtech companies seeking to expand? Which opportunities are diminishing as the market matures?

Historically, a significant obstacle for edtech businesses in Europe, especially within the K-12 sector, has been the difficulty of creating a product perfectly suited to a specific national market – such as France or Germany – while simultaneously attempting to scale internationally, due to limited digital infrastructure in schools and inconsistent online learning practices across countries. Many successful European edtech companies, like Kahoot, initially focused on the U.S. market to establish substantial traction within a single market before addressing the complexities of international expansion.

Although some regional variations will persist, the widespread exposure to online learning experienced recently has resulted in more consistent online learning behaviors across different countries. This is advantageous, as solutions developed locally can now more readily scale globally, as a product designed for the German market is more likely to meet the needs of international users. However, this also means the timeframe for developing a localized product before encountering international competition will be shorter.

In a more competitive environment, solutions will need to demonstrate differentiation not only within specific regions but on a global scale, delivering superior value in terms of cost (learning cost per hour), relevance (the value of the material), efficiency (learning rate per hour), or engagement (time spent learning).

Looking ahead five or more years, once the pandemic is largely behind us, what do you envision the future of education will be?

While edtech has experienced substantial growth in the past ten months, the transition to online learning has not been universally positive. The abrupt shift often resulted in traditional teaching methods being directly transferred online, without adapting to the unique requirements of online engagement. This frequently led to a decline in the quality of instruction and learning, and many students lacked the necessary devices and internet access to participate effectively.

In five years, I anticipate that the majority of learning, particularly in K-12 education, will return to the physical classrooms that existed in January 2020. However, there will likely be a greater recognition that a standardized approach to education is inefficient, both online and offline. Ideally, a more proactive integration of technology and traditional teaching methods will enable educators to dedicate more time to coaching, motivation, and personalized learning, while foundational instruction and information delivery can occur outside of the classroom.

Beyond secondary education, I expect a significantly wider range of options for students. While those with the financial means may still choose traditional on-campus college experiences, many will opt for shorter, online courses of study with demonstrated success in job placement.

The most significant change will occur within the workplace, where learning will become an integral part of daily operations. Training and productivity tools will converge, providing regular updates on best practices, and real-world results will inform future training cycles. Continuous learning will become a standard component of professional life.

Charles Birnbaum, partner, Bessemer Venture Partners

What changes do you foresee in edtech as students return to in-person learning? With the increased familiarity of remote learning, what emerging ideas might gain traction?
The adoption of cloud technologies has historically been slower in K-12 and higher education compared to other sectors. Although numerous specialized solutions have achieved success, the challenges presented by the recent pandemic compelled educators, students, and families to rapidly increase their comfort level with technology, which is expected to benefit the edtech sector in the coming years. The possibility of online tutoring, teaching, and guidance through digital platforms and marketplaces has existed for some time, but customers are now witnessing its effectiveness firsthand.
What are the primary challenges facing early-stage edtech companies as they attempt to expand? Which opportunities are diminishing as the industry develops?
Successfully and rapidly establishing a market approach has consistently been difficult in this sector, as businesses frequently encounter lengthy and complex sales processes. Despite the increasing demand for software solutions, we do not expect this to change in the near future. We often observe companies with excellent products achieving initial acceptance, but struggling to achieve substantial growth within the education sector unless they can bypass K-12 or higher-ed institutions and connect directly with end-users.

How do you envision the future of education in five or more years, once the pandemic is largely behind us?
We maintain our belief that a significant opportunity exists to address the skills gap experienced by employers, especially within the United States. While many companies are working to resolve this issue, including our own rapidly expanding portfolio company, Guild Education, we also anticipate that higher education will require fundamental changes over the next several decades as employers prioritize specific skills for the modern information-based economy. Consequently, we expect to see a growing space emerge between traditional four-year degree programs and shorter-term training programs and bootcamps.

Bradley Twohig, partner, Lightspeed Venture Partners

How do you envision the future of educational technology once students return to in-person learning? With the increased familiarity of remote learning, what emerging ideas do you anticipate gaining traction?

Within the K-12 sector, the traditional “snow day” is likely to become a thing of the past. Having successfully operated in both fully remote and hybrid learning environments, schools are less inclined to dismiss classes for weather or other non-individual reasons. There’s a growing acceptance of hybrid classrooms and more flexible learning models throughout education, not only among students who have grown up in a digital environment, but also among educators and school administrators.

The pandemic significantly sped up the integration of digital tools by teachers and administrators, who control a substantial portion of educational spending. During the pandemic, educators and administrators favored solutions that had already proven effective and adapted them to meet the demands of distance learning. This resulted in school-wide implementations evolving into broader institutional deployments. We expect these trends to continue even after the pandemic subsides, positioning solutions that demonstrated success both before and during the pandemic as leaders in the future.

What are the most significant obstacles facing early-stage edtech companies as they attempt to grow? Which opportunities are diminishing as the industry develops?

Success during the COVID-19 pandemic does not automatically translate to success in a post-pandemic world. The challenges related to distribution, funding, and the acceptance of specific methods will remain, as they have historically. However, the overall demand for startups offering digital learning solutions has substantially increased.

We foresee a decline in the prevalence of all-encompassing content solutions for core subjects like mathematics, English, science, and social studies. This shift will create opportunities for more focused and adaptable digital teaching methods. The conventional methods of content creation, distribution, and adoption employed by major publishers are rapidly losing ground. We anticipate it will become increasingly difficult for even new companies to achieve dominance in a single subject area as this trend continues, and industry consolidation is likely to follow.

Looking ahead five or more years, once the pandemic is largely behind us, what changes do you foresee in the education landscape?

Historically, investment in technology within the education sector has been lower compared to other major industries. The pandemic acted as a catalyst, providing a compelling reason to bridge this gap as traditional, offline methods became impractical. We believe that investment in educational technology will soon align with the levels seen in most other major software categories.

Daniel Pianko, co-founder and managing director, University Ventures

How do you envision the future of educational technology as students return to in-person learning? With the increased familiarity of remote learning, what emerging concepts do you anticipate gaining traction?

Those closely following K-12 education technology will likely be surprised by the speed at which learning reverts to pre-pandemic, in-person norms. Many experts will likely consider the period of COVID-19 as a setback in learning, with numerous advancements in online education being abandoned alongside the negative experiences associated with remote instruction.

In contrast, higher education and workforce development programs are facing a reevaluation of their core financial structures. Students and their families have gained insight into the value proposition of higher education – is the substantial tuition cost truly justified? Both parents and employers will likely begin to seriously question the existing cost structure and redirect their investments toward programs that offer more direct pathways to employment – a focus on job-focused training rather than traditional education will be a key trend in 2021.

A significant development will be the growth of education solutions directly targeted at consumers, such as Outschool and Varsity Tutors. Affluent parents will increasingly seek supplementary educational opportunities for their children outside of traditional schooling, potentially widening existing economic disparities within the country. This trend existed prior to the pandemic, has been amplified, and is unlikely to reverse without intervention.

What are the primary challenges facing early-stage edtech companies as they attempt to expand? Which opportunities are diminishing as the industry evolves?

The extended sales process continues to be a major obstacle for new edtech startups. Achieving substantial revenue growth remains a significant hurdle.

Access to capital will be readily available for companies that can attract investment from Silicon Valley. However, a key risk for edtech startups is the potential for Silicon Valley-level valuations to clash with the typically slower revenue growth inherent in the education sector, creating a disconnect between investor expectations and the actual pace of change within education.

Edtech founders often anticipate that a superior product will naturally gain widespread adoption. However, they may not realize that success in edtech often hinges more on effective sales strategies than product excellence. Distribution is a critical factor in edtech.

Looking ahead five or more years, once the pandemic has become less prominent, what changes do you foresee in the education landscape?

Artificial intelligence will increasingly automate basic learning tasks, shifting the focus of instruction toward computer-based methods. Attempts to utilize technology to address educational inequalities will achieve only limited success. Increased private investment from affluent families will likely exacerbate existing disparities in educational access.

Rebecca Kaden, managing partner, Union Square Ventures

What changes can we anticipate in edtech as students return to in-person learning? With the increased familiarity of remote learning, what emerging concepts do you foresee gaining traction?

The COVID-19 pandemic has significantly accelerated pre-existing shifts in education, particularly in demonstrating the diverse and effective methods of learning available. While I don’t anticipate the end of in-person instruction, I believe we’ll increasingly observe hybrid learning environments. These models will incorporate tools that facilitate flexibility, personalized learning experiences, and education driven by student interests. Some parents, having utilized platforms such as Outschool (a company we’ve invested in) as temporary alternatives during school closures, are now continuing to use them alongside traditional schooling. Furthermore, we expect to see innovative school models, like Sora (another one of our investments), that provide alternative educational settings for students who previously felt mismatched with conventional schools, when in reality, the issue was the incompatibility between the student and their existing school environment.

What are the primary challenges facing early-stage edtech companies as they attempt to expand? Which opportunities are diminishing as the edtech landscape evolves?

We believe the most promising opportunities lie in directly reaching the learner. We find that the most impactful way to transform a system is from the outside in, through products and services that learners genuinely enjoy and readily adopt. We are more enthusiastic about this direct-to-learner approach than traditional models that rely on sales to institutions or school districts. The advantage of a direct-to-learner strategy is its speed, accessibility, and adaptability. However, the challenge lies in prompting behavioral changes within a long-established system that has remained largely unchanged for decades. We are witnessing this shift occur, and it’s encouraging, but it requires exceptionally compelling products to sustain momentum.

How has the recent growth in edtech influenced your investment decisions? Has the increased interest from investors outside the edtech sector led to inflated valuations, or is the market expansion benefiting all participants?

We are pleased to see greater attention directed towards a sector that urgently needs innovation and expanded options. USV has a long history of investing in learning, with portfolio companies like Duolingo, Skillshare, Quizlet, and Codecademy demonstrating the potential for value creation through direct-to-learner models. These models make new learning behaviors more accessible in terms of both convenience and cost, spanning from childhood through lifelong learning. Increased attention and focus in this area are generally positive, but we maintain a focused investment thesis, specifically seeking companies that align with our criteria.

Historically, edtech has experienced limited exit activity. When do you foresee this changing? Are you optimistic about the recent surge in funding? Conversely, what consolidation trends do you anticipate?

We anticipate several significant exits within the education sector in the near future. The leading companies in the market are maturing and demonstrate fundamental strengths comparable to successful consumer internet businesses, and the market is beginning to recognize this. There are now more potential exit strategies than ever before. Considering these factors, we expect to see activity within the next 24 months.

Andreata Muforo, partner, TLCom Capital

How will educational technology evolve once students return to in-person learning? Considering the growing familiarity with remote learning, what emerging concepts do you anticipate gaining traction?

We anticipate the interplay between remote and in-person learning will continue for at least another year, given the varying conditions across different regions. However, several key insights have already emerged:

Educational institutions must adapt their approaches to facilitate a smooth transition between physical and virtual environments. Currently, the market is quite fragmented, with limited availability of comprehensive, end-to-end solutions, particularly within the African context. There’s a growing requirement for systems capable of managing both on-site and remote learning, with a focus on simplified connectivity and reduced data consumption. Rapid feedback mechanisms for teachers and support for online (video) curriculum development are also essential. The demand for high-quality video content – especially pre-recorded, asynchronous materials – is substantial for both formal and informal education. Furthermore, the ability to cater to diverse learning paces within the same age group is increasingly critical in remote learning scenarios, presenting a significant challenge for educators and schools.

Parents are actively seeking supplementary learning resources for their children. Beyond the school day, they are also prioritizing “live” interactions, even if virtual, as children spend more time at home and have fewer opportunities for in-person social engagement.

In summary, there’s a rising need for “school operating systems” that enable seamless transitions between on-site and remote learning, utilizing personalized video content. These systems should be simple to use, require minimal technical infrastructure and connectivity, and provide teachers with quick feedback loops. Simultaneously, parents are increasingly willing to invest in additional support and educational activities for their children, demonstrating greater openness to “live video sessions” and other digital content that enhances learning and alleviates some of the homeschooling burden.

What are the most significant obstacles facing early-stage edtech startups aiming for growth? Which opportunities are diminishing as the sector develops?

In Africa, the primary challenge remains customer acquisition and the consistent management of subscriptions – specifically, securing recurring payments. Important considerations include pricing strategies, market positioning, and effective distribution channels to reach a broader population. Affluent families are generally well-connected and capable of affording higher price points and utilizing card payments. However, targeting lower-income segments (the middle class, for example) necessitates a focus on cost-effective acquisition and distribution methods, as well as pricing models and retention strategies that address the complexities of ongoing payment collection. Given that families already allocate a significant portion of their income to education – both proportionally and in absolute terms – we believe the potential for further edtech solutions and platforms is substantial and largely untapped.

Looking ahead five or more years, once the pandemic is largely behind us, what changes do you foresee in the landscape of education?

While predicting the “new normal” remains difficult, we expect to see a greater integration of on-site and remote learning, increased utilization of video resources, and a higher degree of personalization. However, the pandemic underscored the fundamental importance of the social and experiential learning aspects of schools, universities, and education as a whole – particularly in scientific disciplines. Consequently, we believe that schools will remain vital and continue to play a significant role in both delivering and receiving digitally enhanced education. The pandemic also provided parents with firsthand insight into the strengths and weaknesses of traditional schooling, as well as the challenges of taking on greater responsibility for their children’s education, prompting them to seek more comprehensive and enriching educational experiences. Overall, we anticipate increased spending on education, with schools incorporating more technology into their teaching methods (and certain programs, such as non-hands-on master’s and doctoral degrees, transitioning fully online), and parents actively seeking supplementary educational resources both within and outside the formal education system.