The EdTech investment opportunity
These advantages have prompted surging capital flows into the sector. Venture capital investment in EdTech reached a massive $US20.8 billion in 2021, according to HolonIQ, up significantly from the $US7 billion invested just two years earlier in 2019.
Along with a wave of venture funding, private equity investors are also targeting the sector. Blackstone made a major growth investment in Renaissance Learning, a global EdTech leader, in 2021, with Macquarie Capital serving as financial advisor to Renaissance.
Big software sector investors are also fervently targeting EdTech. In 2021, Evergreen Coast Capital acquired a majority stake in DreamBox Learning, the EdTech provider that uses intelligent adaptive learning systems, a deal in which Macquarie Capital advised the Dreambox board of directors.
Another headline deal in 2021 was Apollo Global Management’s sale of McGraw Hill1, a leader in educational content and digital platforms, to private equity investment firm Platinum Equity for $US4.5 billion. Macquarie Capital acted as sell-side advisor.
Global investments across the EdTech sector are not slowing down. According to HolonIQ2, Venture Capital reached 3 times pre-pandemic levels in 2021, accelerating global EdTech start-ups with more than $US20 billion in funding. Today, Europe and India are helping to lead investments across the sector and offset China’s $US8 billion EdTech investment collapse in 2021, resulting from a broad range of policies impacting China's leading role in EdTech. The international investment landscape, largely fuelled by capital from the US, Europe and India set new records for growth in the sector.