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From Easels to EdTech: The pandemic story

James Pople, Managing Director, DC Advisory
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The global Education landscape has taken an unprecedented turn as a result of Covid-19.  The widespread halting of in-person learning across the world has driven digital innovation and adoption across the traditional parts of the sector, as schools, higher education institutions and professional training providers have had to develop new ways of continuing to engage and deliver quality services to their pupils throughout the pandemic.

Pre-pandemic, the EdTech industry was already on the rise with tech becoming increasingly adopted across all learning settings, as evidenced by the huge growth in market size from ~$58 billion in 2015 to ~$165 billion[1] this year. The onset of Covid-19 has further accelerated a shift in demand for high quality remote or hybrid learning, with products and services that were previously deemed ‘nice to haves’ now very much a necessity.

One key pandemic-driven trend is the professional development space. With the pandemic creating unemployment issues and pressure on the jobs market, along with employers dealing with workforces forced to work from home, both candidates and employers are turning to online courses for a competitive edge – and online education services are responding.

We’ve seen rising investment activity (through both M&A and internal capex programmes) as professional education companies diversify and digitalise their offering to capitalise on the virtual learning trend. Platforms with online delivery models – particularly those with B2B business models and secure client bases – could be seen as increasingly high value assets in the short to medium term, as investors seek Covid-resilient assets in which to deploy their capital.

We suspect, however, that some consumers will continue to value in-person learning settings more highly than their digital counterparts and therefore the balance of face-to-face and online will be important for operators to consider post-pandemic. Several solutions-led e-Learning Management Systems (LMS) providers have recognised this concern and has responded by including face-to-face, but often virtual, instructor-led training, alongside digital workspaces and testing platforms.[2]  These ‘hybrid’ offerings could form the foundations of corporate and professional training education models moving forward, and will in part drive the value of the LMS sector to ~$28bn by the end of 2025.[3]

Innovation and change in the education sector has generally been relatively slow, with traditional education delivery models seen as ‘tried and tested’. However, the increasing pace of development pre-pandemic, coupled with providers being forced to innovate as a result of Covid-19 has sparked an increasing focus from governments and regulatory bodies who are keen to foster innovation and investment and also give providers the necessary breathing space to trade through this crisis.

In some cases, we’ve seen regulatory shifts around online delivery – for example, the UK-based Office for Students (OfS) and Department for Education (DfE), relaxing online delivery requirements for universities during the pandemic. We expect there to be more flexibility from regulators – providing quality remains high – as the world returns to normal.

With ‘second waves’ and more national lockdowns worldwide, it feels unlikely the momentum for online education models will slow down, even with increasingly positive news from the pharmaceutical industry around mass vaccination. Most interesting, however, will be the lasting results of this global test to learning delivery which may well pull forward innovation plans and delivery models by several years.

James Pople, Managing Director, DC Advisory

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