With the ongoing COVID-19 pandemic prompting educators, learners, and families to embrace innovative technologies, the overall potential market for educational technology has expanded significantly in recent months. This transition has encouraged investors to increase funding in the field, resulting in several new companies achieving unicorn status.

However, growth and development aren't solely defined by increased investment and highly valued startups—they also involve company acquisitions.

Mergers and acquisitions within the edtech space are currently more prevalent than normal: recently, Course Hero, a company offering students subscription-based access to educational resources, purchased Symbolab, a calculator utilizing artificial intelligence. Saga Education, a tutoring organization supported by Comcast, the Bill & Melinda Gates Foundation, and others, has acquired Woot Math, a platform providing math software. Additionally, PowerSchool, a provider of software solutions for school administration, obtained Hoonuit, a tool focused on data management and analytics for teachers. Lastly, Discovery Education, a K-12 curriculum provider, bought Mystery Science, a newer company specializing in science and STEM curriculum for grades K-5.

This represents a substantial amount of activity in a brief timeframe. Fortunately, these consolidations provide valuable insights into how edtech companies are envisioning the future direction of the industry.

Smart content as a competitive advantage

In many ways, content has become readily available to anyone. If individuals can locate complimentary instructional videos on platforms like Youtube or Khan Academy, or choose to subscribe to an educational technology service offering similar resources, the increased accessibility of education benefits learners. This trend is frequently a key reason why startups employ a freemium model as a strategy for attracting customers. To successfully convert those utilizing the free version into paying customers, edtech companies must provide content that is both unique and specifically tailored to user needs.

Recent acquisitions by Course Hero and Mystery Science demonstrate the strong demand within the edtech sector for content that is personalized and targeted. Course Hero’s purchase of Symbolab was fundamentally an investment in over ten years of data detailing the mathematical problems students struggle with the most.

Symbolab functions as a math calculator projected to handle over one billion queries this year. Each solution provided contributes data to its algorithm, identifying common areas of difficulty and confusion for students. Course Hero, conversely, provides a more comprehensive service centered around questions and answers across numerous subjects. CEO Andrew Grauer stated that the algorithm utilized by Symbolab is not something Course Hero, established in 2006, could quickly develop internally, which is why they “opted to acquire rather than build.”

Grauer explained that the acquisition was strategically timed, as larger companies are also entering the question-and-answer market. Google purchased the homework assistance application Socratic in 2019, and Microsoft simultaneously developed Microsoft Solver.

Discovery Education, a provider of curricula for K-12 classrooms, acquired Mystery Science, a San Francisco-based company specializing in K-5 STEM curricula. Discovery Education has previously introduced several science education products, including Discovery Education Experience, the Science Techbook series, and STEM Connect. However, Mystery Science primarily concentrates on delivering an innovative digital approach to science education. Its programming, consisting of videos, prompts, and projects, addresses questions such as, “Where do rivers flow?” and “Is it possible for a volcano to erupt in your area?” for younger learners.

Keith Schact, CEO and founder of Mystery Science, highlighted that his product is geared towards both students and teachers, while Discovery Education focuses on educators and school districts, characterizing the acquisition as a mutually beneficial combination. Despite the growing trend of edtech companies marketing directly to consumers, Schact remains optimistic about the significant role that educational institutions play in the widespread adoption of technology.

“While reaching teachers directly can capture a certain portion of the market,” he said, “institutions continue to exert considerable influence.” Schact drew a parallel to the evolution of media, noting that while blogs allow for direct publishing and engagement with an audience, writers seeking broader reach often join larger platforms. The same principle applies to edtech, where some startups require formal approval from schools to achieve venture-scale growth.

According to an individual with knowledge of the transaction, Mystery Science was sold for $175 million after securing only $4 million in venture funding.

Using data management and analytics to improve student outcomes

What was once a concern for many families, learning remotely has now made digital engagement more accepted. As the use of digital devices increases and opportunities for in-person interaction decrease, educators require innovative methods to assess student requirements and areas for improvement.

The solution extends beyond simply requesting students to activate their cameras during virtual classes—a practice that could potentially be detrimental to students facing challenging home environments. Rather than mandating video participation or icebreaker activities, teachers and school leaders are leveraging data services to pinpoint students who are experiencing difficulties and are at risk of disengagement. This approach supports student understanding and improves school enrollment rates, which subsequently influences budgetary decisions and resource distribution.

The agreements between PowerSchool and Saga Education demonstrate a growing emphasis on learning experiences driven by analytical insights, particularly within the context of remote education.

PowerSchool provides a comprehensive range of services for school administration and operations, encompassing assignments, grading, human resources, state reporting, and student registration. Through its acquisition of Hoonuit, the company is integrating more specialized data management and analytics tools designed for educators. Hoonuit also provides professional development for teachers, utilizing predictive modeling to enhance understanding of student performance and comprehension.

Currently, PowerSchool serves over 45 million students, while Hoonuit supports more than 14.5 million. Although this acquisition will likely expand PowerSchool’s customer base, the primary benefit lies in the software itself rather than simply gaining new customers. Hoonuit employs machine learning to analyze the connections between attendance, behavior, and academic results, providing a comprehensive view of a student’s progress.

“In the process of identifying and addressing potential issues, time is the most critical factor, as early detection enables more rapid intervention,” stated Hardeep Gulati, CEO of PowerSchool, in an interview with TechCrunch. “Combining separate data sources and applying machine learning is essential for obtaining the correct insights at the appropriate time and location.”

Saga Education, which delivers math tutoring and mentorship to students from low-income backgrounds, has acquired a service that invests in evidence-based software for math instruction—Woot Math. Woot Math’s platform offers three approaches to comprehension: self-directed learning, teacher-led instruction, and peer-to-peer tutoring. Initially offered as an in-person service, Saga is now available online with Woot Math. This software enhancement not only expands Saga’s reach into more homes but also enables tutors to maintain consistent relationships with their students. The platform has received support from the NSF, the U.S. Department of Education, and the Bill & Melinda Gates Foundation.

We can anticipate numerous additional acquisitions in the coming months, as edtech entrepreneurs continually seek new ways to distinguish themselves in an increasingly competitive landscape. The edtech sector has frequently experienced fluctuations in investor interest due to the fragmented nature of available services. However, with renewed investment, edtech is now positioned to refine and consolidate its operations, addressing existing inefficiencies.