The EdTech Marketplace is Exploding: Three Reasons VCs Are Loving It

Ten years ago, I began dreaming of a way to improve access to education for people all over the world. It was a lofty goal but I was confident in our mission: to shape the future of effective learning.

Today, I’m the proud co-founder and CEO of Preply, a global marketplace for online language learning that connects 40,000 tutors teaching over 50 languages to over 100,000 students every month.

As a company, we can credit our success to many factors: an incredible team, a great product and loyal customers. But we wouldn’t be where we are today without capital. Preply raised $1.3M in 2016; $4M in 2018; $10M in 2020; and $35M in 2021. Our investors are just as diverse as the languages taught on our platform, including German, Polish and French.
This year’s record-breaking fundraise can, in part, be credited to the EdTech marketplace’s explosion and investors’ confidence in its future. The industry already had great momentum, but the COVID-19 pandemic catapulted EdTech to the next level and reinforced its value to learners and educators alike. According to Grand View Research, “The global education technology market size was valued at USD 89.49 billion in 2020 and is expected to witness a compound annual growth rate (CAGR) of 19.9% from 2021 to 2028.”

Here are three reasons why investors are loving EdTech companies:

Broad Demographics Create Opportunities
Lifelong learning has become a prominent part of society. From preschoolers to postgraduates to professionals, EdTech product users run the gamut, creating an extraordinary opportunity to capture a wide swath of the population. On the younger end of the spectrum, children have become proficient at using tablets and mobile devices for both entertainment and educational purposes. For adults, continuing education has both personal and professional benefits. The EdTech marketplace is full of startups for investors to choose from, such as K-12 learning platforms to career development apps.

Digital Products Create Global Scalability
Digital products allow us to reach consumers anytime, anywhere across the world. Of course, it’s no easy feat to break into different markets. But when it’s done right, the possibilities are endless. Here at Preply, we have learners from almost every country in the world, including Bhutan, Faroe Islands, the Vatican and East Timor. Investors love technology-based educational products because they value the opportunity to expand markets, acquire new customers and steadily grow the business in all corners of the globe.

Problem-Solving Platforms Create Demand
The most viable products and services provide solutions to existing problems. In the world of tutoring, for example, there are challenges for both teachers and students. For tutors, they have been historically limited by locale, only taking on students within their communities; driving to and from appointments (or opening up their homes); and managing payments along the way. For students, tutors can come with high price tags and limited schedules (i.e. after school). Businesses within the EdTech space are leveraging technology to solve problems and formulate solutions. For example, Preply’s tutors relish in the convenience of teaching online. They make their own schedules, set their own rates and swap local commuting for global clientele. As for our learners, they too gain the freedom of choice: a tutor anywhere in the world, any time day or night, at a price they can afford. For VCs, there’s a feel-good element to investing in EdTech companies because the value proposition to customers is clear and compelling.