European, North American edtech startups see funding triple in 2021 – TechCrunch

Startups

Even if recently in 2019, the edtech ecosystem could have been compared to a shallow well. Financing and activity were concentrated in a number of markets and only a few growing companies sparked interest.

But that is no longer the case. Gone are the days when pitches to VCs had to overcome skepticism about market size and consumers’ willingness to use technology-enabled learning solutions.

2020 will be remembered in educational circles for the uproar it caused in schools, universities and workplaces. But it will also be remembered as the year the industry woke up to the solutions developed by edtech companies to help people learn faster, cheaper, more efficiently and effectively.

Not surprisingly, 2021 saw a boom in edtech investment across a spectrum of investors. Indeed, the edtech investments in 2020 and 2021 were equal to the amount raised during the full 2014-2019 period.

To continue the original metaphor, the edtech ecosystem is now a deep, thriving lake. Exciting companies are spawning in geographic and vertical areas, and even generalist investors are building the belief that the industry is capable of generating the same kind of outrageous returns that are generated in fintech, healthtech, and other sectors.

Generalist investors are interested in the sector because of both financial and positive impact returns, creating more competition for specialist funds.

Our 2021 funding report, released today, highlights key global growth and activity metrics in edtech with a focus on Europe. We mainly used data from Dealroom, with which we developed an edtech focused data platform.

A year of records

First, European investment in edtech VC has tripled to $2.5 billion in 2021 from $790 million in 2020, compared with global funding growth of 34% to $20.1 billion in 2021, from $15 billion in 2020. The continent’s ecosystem is also becoming more robust – the number of edtech deals in Europe accounted for 31% of all deals in the sector, up from 21% in 2019.

Edtech's funding in Europe reached $2.5 billion by the end of 2021.

Image Credits: Brighteye Companies

This growth was not limited to the usual geographies: six European markets raised more than $100 million in 2021, compared to just one in 2020. Most of these markets are in Northern Europe, so we hope and expect some big ones. players can be seen breaking out in Southern Europe in 2022 (particularly in Spain, Portugal and Italy).

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