In the wake of London Tech Week and London EdTech Week last month, there is a sense of renewed optimism about the state of the UK EdTech industry at the moment, coupled with a distinct feeling that it maybe be gaining prominence compared to its flashier, more established counterparts in Health Care and Finance – which itself has recently been under the spotlight for London Fintech Week.
A tangible UK EdTech growth spurt is in evidence.
From 2014 to 2017, investment in European EdTech start-ups more than tripled in size, from €140mn to €490mn, with 35% of this €490mn figure attracted by UK start-ups and roughly a quarter of Europe's EdTech companies based here.
While €490m represents just a third of the venture funding invested in US EdTech in 2017, just five years ago it was a tenth.
Britain’s growing status as an EdTech enabler
Britain’s growing status as an EdTech enabler has also just been enhanced with the announcement that The World Bank, University of Cambridge and UK tech companies are partnering with the government’s Department for International Development (DFID) to create the largest ever education technology research and innovation project.
This EdTech hub will conduct research into how innovations can be evaluated, scaled-up and used across developing countries in particular.
That’s £20mn of aid and a lot of expertise focused on helping teachers and governments around the world, particularly in African nations, choose the right technology for their classrooms.
Innovating education in Africa
At Tmrw Digital we have long been advocates of the pressing need to innovate education in Africa as a global imperative, so the creation of this new hub, with real investment from government and a meaningful partnership with the right blend of players from academia and the private sector too, is hugely welcome.
London Tech Week, although only six years old, really came of age this year as Prime Minister Theresa May opened it for the first time.
The PM used the occasion to announce a £150mn investment in quantum computing and 2,500 AI course places at universities, with 1,000 scholarships across the country. At the same time, she noted tech companies around the world are investing £1.2bn in Britain.
This kind of priority given to the sector, backed with meaningful investment and a further bringing together of relevant partners and players, is just the kind of activity needed to boost, underpin and give real meaning and weight to the government’s recent EdTech Strategy.
EdTech has a severe funding challenge
We must remember, however, that while UK EdTech companies raised £300mn in funding between 2010 and 2018, this is still dwarfed by funding in UK Fintech which received £2.6bn in 2018 alone.
By revenues, the global EdTech, Fintech, and Digital Healthcare sectors are all roughly the same size, so it’s no exaggeration to say EdTech has a severe funding challenge – fragmented and drawn-out buying cycles often mean that investor returns in EdTech simply aren’t that attractive.
Specialist EdTech investment funds and accelerators are a large part of the answer, yet they are still few and far between, especially in Europe, although there are notable funds such as Emerge Education in the UK, and Brighteye Ventures and Educapital in Paris, a growing EdTech hub itself.
Assuming the funding is there, there are many areas of EdTech growth and opportunity. There is the growth of:
- Kids coding
- Language learning
- The shift of online content towards lifelong learning
- Corporate learning
- And no shortage of companies providing software to improve educational outcomes at schools.
EdTech has huge potential to improve the efficiency and outcomes of learning and I expect to see some big winners in the space over the next few years.
Lifelong learning leading to vibrant EdTech hybrids
The lifelong learning trend is particularly advantageous for EdTech firms to move into, as its market space is so broad and covers so many sectors.
It is also an area of key interest in the government’s EdTech Strategy, which says it sees an increasing role for digital technology supporting adults in up-skilling and re-skilling throughout their career, particularly in response to changes in the labour market.
Interestingly, with the EdTech market covering such a wide range of technologies and applications:
- Learning / educational platforms
- School administration
- Learning management systems
- Communication platforms
- Study tools, and
- Learning analytics
Some notable intersections with HealthTech and FinTech are becoming apparent, as they begin to produce some vibrant EdTech hybrids.
The financial education for university students app BlackBullion and Lexplore, which helps children with reading difficulties such as dyslexia, are good examples in this regard.
One of the UK’s fastest-growing industries
As one of the UK’s fastest-growing industries, with a 22% revenue growth year-over-year, and accounting for 4% of all UK technology companies, EdTech’s steady rise is good news for a country currently facing ongoing Brexit uncertainty.
London’s preeminent position as a launch pad for EdTech startups and its growing reputation as a leading hub – with many foreign nationals choosing to establish their EdTech companies in the capital – is also unlikely to change soon.
If the UK can continue to nurture companies and connect the wide variety of stakeholders in the industry, we are in the right place to continue to contribute to – and benefit from – the sectors upward trend.
Vikas Pota, Group Chief Executive of Tmrw Digital @vikaspota