13 investors say lifelong learning is taking edtech mainstream

The venture potential of a startup that caters to individual students — instead of a slow-moving, small-pocketed institution — has a bullish aura that attracts investors.

Add in a pandemic that forced many to embrace remote learning overnight, and it makes sense that we have seen companies like Outschool and ClassDojo turn first profits while startups like Quizlet and ApplyBoard reached $1 billion valuations.

Last year brought a flurry of record-breaking venture capital to the sector. PitchBook data shows that edtech startups around the world raised $10.76 billion last year, compared to $4.7 billion in 2019. While reporting delays could change this total, VC dollars have more than doubled since the pandemic began. In the United States, edtech startups raised $1.78 billion in venture capital across 265 deals during 2020, compared to $1.32 billion the prior year.

In today’s survey, thirteen top edtech investors shared their thoughts on how growth of lifelong learning is reshaping the industry. Given the sudden extinction of snow days and yeast shortages brought on by student bakers in the early days of the pandemic, it’s easy to see how remote education extends beyond traditional school hours. As learners become more multi-layered and nuanced, so have the edtech companies that back them. 

This was a recurring theme in today’s survey, signaling a shift in how investors approach hybrid learning. The evolution of post-pandemic education will be complex, if not aggressively competitive among the growing cohort of well-capitalized edtech companies. While we asked investors about their post-pandemic tastebuds back in July, much has changed since. Higher education didn’t combust like some expected today, and today, many predict that K-12 students will return to pre-COVID formats after vaccinations are widespread. 

It puts startups in a difficult spot: if 2020 was about enabling video-based teaching, what might emerge from 2021? Integration between different edtech apps? New student collaboration tools? Are employer-led up-skilling and a renewed interest in self-improvement enlarging edtech’s TAM?

Here are the investors we spoke to, along with their areas of interest and expertise:

  • Deborah Quazzo, managing partner, GSV Ventures (an education fund backing ClassDojo, Degreed, Clever)
  • Ashley Bittner, founding partner of Firework Ventures (a future of work fund with portfolio companies LearnIn and TransfrVR)
  • Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)
  • John Danner, managing partner, Dunce Capital (an edtech and future of work fund with portfolio companies Lambda School and Outschool)
  • Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multi-stage generalist fund with investments including Forage, Clever, and Outschool)
  • Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly-valued companies including Byju’s, Newsela, and Masterclass) 
  • Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy, and BibliU) 
  • Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer, and Aula)
  • Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)
  • Daniel Pianko, co-founder and managing director, University Ventures (a higher ed and future of work fund that is backing Imbellus and Admithub)
  • Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet, Duolingo)
  • Andreata Muforo, partner, TLCom Capital (a generalist fund backing uLesson)

Deborah Quazzo, managing partner, GSV Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

For k12, use of digital products and platforms will now be very “normal” – companies like Lexia and DreamBox and Nearpod. Maybe this drives home usage of some products traditionally used only in schools like Lexia. Students of all ages are now very facile with zoom, this can pave the way for more zoom based synchronous learning offerings including extracurricular learning like music, dance etc. schools are now fully wired – maybe we will see schools implement home based learning programs – it’s where students spend half their time.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

Edtech cos need to stay away from the me too solutions. We have seen 20 creator led learning platforms across “preK to Gray” learning in addition to incumbents like Teachable and very few have an ability to build a moat in my view. Unless someone has a very fresh take, I think that ship has sailed. Hopefully as white spaces fill with competitors, new white spaces will emerge. Emerging tech – AI/NLP/ML/VR – will continue to push the envelope. We are still not driving enough people to competency whether in prek12, higher ed or workforce so the opportunity remains vast.

How has edtech’s boom impacted your dealmaking? Has the new interest from generalist investors made valuations too bubbly, or is the market growth helping everyone?

We met on zoom with over 800 founding teams in covid all over the world. We invested in 14 new companies and are just finishing rounds in 2 more. Valuation pressures are across tech sectors. Id argue that education still lags average tech. the question for edtech is whether there is potential for a $100B company in the sector – will TAMs support it.

Ashley Bittner, founding partner, Firework Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

As it relates to our thesis, I believe that the role of employers is changing. Pre-COVID, it was estimated that as much as 1/3 of the US workforce would need to change jobs by 2030. Employers cite skills gaps as a top 3 business concern to stay competitive. Our thesis is that employers will take on more responsibility for reskilling their current workforce, and that training will become job-embeded (rather than only trying to hire to address the challenge.) Degreed was the first wave of this… Learn In is an example of the next step in this evolution. As employers look to provide more skills training (rather than compliance training), we believe that more will come from external sources (CEOs say they are unprepared to meet the reskilling challenge with existing internal resources) and that much of this training will be provided online and during work hours (to address the time barrier that is an equity issue.) I also see an opportunity for modalities like VR to become more popular as we shift to more digital and remote solutions (e.g TRANSFR.) Stats from McKinsey research.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures? In US pre-K and K-12, high customer fragmentation (16,000 school districts, 100K+ schools…pre-K even more fragmented with little public investment), long sales cycles, budget, pedagogy, and regulation. TAM. Relatively low consumer spend on education relative to other markets. Opportunities – increasing access to broadband, increase in device penetration. In FOW, increased recognition that reskilling and upskilling is a business imperative, company culture matters for competitiveness, increased focus on DEI.

Jomayra Herrera, principal, Cowboy Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?
I think activities that are fundamentally better in person will go back to [being] in person (e.g., sports, music and other enrichment activities). I think that new technology educators may have adopted during the pandemic that they have found to be helpful to their instruction will remain but all the “nice to haves” will likely fall to the wayside. We have a thesis at Cowboy that supplemental education (e.g., Juni Learning, Reconstruction or Outschool) will likely stay online, because parents will not have to worry about driving their kids to learning centers and these companies have the opportunity to make the learning fun.
What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?
For companies focused on K-12 students, it’s still really challenging to sell into schools and school districts because of the long sales cycle. This will likely become even harder, as local and state budgets tighten. In regard to what is fading, I think that tools that don’t solve a real need for educators, students and/or parents or don’t have demonstrated efficacy when it comes to student outcomes will start to fade. Consumers, especially after the pandemic, seem to be more aware of what technology has to offer and have lower tolerance for tools not having a demonstrable impact.For companies that are targeting adult learners, the biggest hurdle continues to be customer acquisition and building a brand that learners can actually trust. As the space starts to mature, consumers are getting more aware of the questions they should be asking (e.g., graduation and placement outcomes) and are less [fooled] by clever marketing.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?
I hope that in this pandemic we’ve realized how critical our educators are to our children’s success and we pay them more :) Incentivizing our best talent to get into and stay in teaching is a critical lever we can pull to improve education.
For K-12, I expect that there will be more comfort with technology in the classroom and that tech can be partnered with in-person instruction in a way that supercharges the educator with the data needed to personalize their instruction.
For higher ed, I expect that there will be an acceleration in online learning for adults as they continue to look to reskill or upskill. There will be more opportunities to do self-paced online learning that is effective and affordable.

John Danner, managing partner, Dunce Capital

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

In K-12, education will probably continue to look much like it did, because the majority of parents are clear that child care is the principal value for their kids being at school. That said, a minority of parents are certainly rethinking education after witnessing what their children were actually learning every day for a year. My opinion is that we will continue to see a disaggregation of this care function from academics. Here’s a piece I wrote about that, which has accelerated significantly this year.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

For vocational schools with a “free until you get a job” model like Lambda or SV Academy, it’s all about job placement. Lambda has had a lot of success with their new fellowship model, which has allowed them to scale significantly. For a lot of early childhood and K-12 companies working online, it’s about new parent behaviors and whether you can develop a habit like Outschool has done. For senior learning like what GetSetUp does, finding the reimbursement models through healthcare is probably the key.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

I think we are in a transition to more and more academics happening in the cloud. Right now, that’s all about live experiences and human in the loop. In five years, I think we will begin seeing a significant impact of AI replacing many human functions.

Mercedes Bent, partner, Lightspeed Venture Partners

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?
Schools will have to contend with hybrid-learning solutions (some already are) and offering much more flexible learning plans to families. Charter schools are already partnering with startups to provide instructional services and I think we may see more private-public partnerships with the public school system as well.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?
I think there is a huge opportunity for social and community-driven learning layers on top of existing content in adult consumer learning. Tutoring is an evergreen need but I think the traditional model of one-on-one tutoring and rote practice will evolve. More and more educational solutions will transition to providing tutoring through gamified, engaging asynchronous content as the primary product and live help to get you unstuck when needed. They’ll also turn tutoring into large live online experiences — just take a look at what Fiveable’s doing.

Ian Chiu, managing director, Owl Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

We believe educational institutions from now on will need to be prepared and ready to deploy technology at scale to maintain continuity of learning for their students. As a result, adoption of solutions with online offerings that can seamlessly switch between in-person and virtual offerings is expected to be prevalent even when students finally go back to school in person.

With remote learning becoming more familiar, we expect to see an increase in compelling direct-to-consumer (DTC) offerings as families consider supplements, and in some cases alternatives, to traditional schooling. This concept is already commonplace in international markets such as China and India where we’ve seen incredibly scaled DTC edtech businesses, and we believe there will be meaningful opportunities for edtech companies to increasingly reach consumers here in the U.S. as well. Over the past year, we’ve made a number of new investments in DTC companies around the world serving students and families. Most recently, we announced our investment in uLesson, which has achieved 70% month-over-month growth via a DTC model in Africa.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

We see one of the bigger hurdles for early-stage edtech startups looking to scale to be go-to-market and adoption amidst an increasingly competitive environment that consists of well-heeled digital incumbents with established brands and scaled global edtech companies. One way for early-stage companies to do so is to clearly understand their unique value proposition and clearly demonstrate efficacy and outcomes. We strongly believe that the most successful companies are those that are able to measure their education outcomes and communicate it to the market. At Owl Ventures, we work closely with our portfolio companies on outcomes and efficacy and have an in-house specialist in Malvika Bhagwat, our director of Outcomes and Efficacy. We highlight the impact that our portfolio companies are delivering in our annual Education Outcomes report.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

We believe edtech will continue to be an integral part of education and schools, even when the pandemic is more of a distant memory, especially since many experts predict future periods where schools and businesses will again need to be remote. Therefore, there will likely be more adoption of solutions with online offerings that can seamlessly switch between in-person and virtual contexts. In addition, we have seen explosive growth in digital education in graduate and certificate education where professionals can improve skills and expand their understanding without leaving the workforce. We believe this shift to virtual delivery is here to stay as it enables more flexible and accessible learning while also creating valuable benchmarking and outcomes data, especially as the world undergoes significant workplace and demographic change in the coming years.

Jan Lynn-Matern, founder and partner, Emerge Education

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

2020 was a year of major change in education, with European edtech companies experiencing massive growth in demand.

Educational institutions around the world were suddenly forced to serve learners digitally. As a result, these institutions increased their demand for companies providing learning experience platforms (Aula), digital content delivery (BibliU) and digital student recruitment (Unibuddy).
At the same time, many higher-education institutions experienced increased financial pressure amidst dropping student numbers. As a result, we saw the rise of public-private partnerships (PPPs) in higher education. PPPs help universities expand their digital audiences and diversify their revenues by offering accredited online education (Fourthrev).
Consumer education companies had the opportunity to step in where institutions failed to serve the needs of learners. As a result, we saw massive growth in demand for online classes (FutureLearn), career education (Jolt), online tutoring (GoStudent), online study communities (Studysmarter), casual learning apps (Babbel) and kids edutainment (Yoto).
Governments around the world had to deal with the highest rates of unemployment in history and a widening skills gap between those in unemployment and companies that were still hiring. As a result, we saw the rise of government-backed funding schemes for lifelong learning and associated growth in demand in companies providing training aligned to employer standards (Multiverse, Openclassrooms, IUBH).
Companies switched to remote hiring, working and training. As a result, we saw growth in demand for business-focused communities of learning (Sales Impact Academy), education brokers (e.g., U.S.-based Guild) and a plethora of remote productivity tools.

Going into 2021, we anticipate that most of these shifts are here to stay or evolve.

While many higher education institutions have found the shift to digital difficult amidst significant backlash from students, the sector as a whole has nevertheless made a significant investment in its digital infrastructure. Ten-year technology strategies became one-year technology strategies. In a post-pandemic world, universities will seek to get maximum benefit from these investments. This will include:

A greater range of courses in hybrid format powered by learning experience platforms — students will be able to shift seamlessly between face-to-face and online attendance of tutorials, seminars and lectures. This will especially benefit nontraditional students with dependents and/or work commitments around which they need to fit study.
Even more fully online degrees, especially targeting adult learners but increasingly also targeting undergraduates. PPPs forged during the pandemic to power these programs are based on long-term contracts and are here to stay.
Even as the pandemic ends, economies will take time to recover. A broad economic recovery will require:

A much larger supply of short, career-focused and employer-aligned courses. We see a huge opportunity for courses that combine the immersive and career-focused nature of a bootcamp with the benefits of university accreditation normally available through a full degree. Accredited digital credentials, as we call them, are strongly preferred to bootcamps by professional learners.
Continued significant government investment in lifelong learning and employer-standards-aligned education. To bridge the skills gap, employers must be incentivized by government to fund vocational training. Taking a cue from the German dual study model, we expect to see more private education companies forge links between employers and education providers to scale vocational training.
In many ways, edtech failed to deliver in 2020. The divide between the have’s and have not’s increased as a result of unequal access to digital education. Zoom fatigue, loneliness and significant variability in support for learners are causing parents and students alike to wish for normality to resume.

Even so, 2020 normalized online learning. Thousands of adult learners used digital courses to reskill and successfully pursue new careers; millions of kids participated in online communities and classes; and every education provider learned — by force — how to deliver and support online learning.

As the world returns to a new normal, consumers will demand the best of both worlds and not all traditional education institutions will be able to deliver this. One new format we are particularly bullish on is community-based live online learning. Companies that get this right combine the best of face-to-face and online education: First, a strong focus on building communities amongst online learners; second, access to the world’s best teaching talent making use of the power of the web. This incredibly powerful combination can be applied to almost any vertical of learning, and any used for any age group, and we are excited to back companies in this space.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

There are three core macro factor shaping the future of education:

  1. Global higher ed demand doubles by 2030 from 200 million to 400 million learners.
  2. Global labor deficit to reach 85 million workers by 2030, representing 11% of the global workforce and $8.5 trillion in potential lost output.
  3. Digitization across the board in education and work, accelerated by COVID.

Our thesis is to invest in companies that bridge the gap between talent and opportunity. We call these companies engines of opportunity. In particular, we are bullish on:

  1. Vocational on-ramps: Companies that provide scalable training programs that facilitate career-switching. These programs are aligned to employer needs and often funded by employers rather than students.
  2. Challenger universities: Companies that redesign higher education from scratch, innovating on a multitude of factors, including technology, pedagogy, employer links and price. The aim is to radically improve and increase access to higher education.
  3. Workforce development companies: Companies that measure employers’ existing skill base, illuminate pathways for career progression of individual employees and provide on-the-job training to help them get there. Workforce development companies are one of society’s greatest levers for bridging the global skills gap.
  4. Employer-university collaboration: Models that forge partnerships between the world’s strongest brands — universities — and employers in order to better prepare students for the world of work.
  5. Digital teaching and learning at scale: Companies that build the technical infrastructure required to build, deliver and support online learning providers at massive scale.
  6. Revenue-diversification in higher education: Companies that enable universities to scale their reach, impact and income through helping address new, previously unreachable markets.
  7. Community-based learning: Companies that combine the power of community, technology and world’s best teaching talent to create unparalleled learning experiences.

Benoit Wirz, partner, Brighteye Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

Prior to the pandemic, a lot of learning was happening online but relatively little money was being spent on digital education by consumers, corporates or traditional academic institutions.

The pandemic forced people to confront this gap as 95% of students worldwide were impacted and most learning went online. Unsurprisingly, willingness to pay both for full-stack digital native edtech solutions, like Epic (Netflix for kids books) or YouSchool (vocational training for blue-collar skills) as well as tools that helped traditional educational institutions provide more effective blended learning (e.g., Google Classrooms for K-12 or Aula for universities) went through the roof. With this increase, Citi/HolonIQ estimates that half of learning is now digital, and yet less than 3% ($160 billion) of educational spend is digital, a $2.7 trillion gap.

As the pandemic recedes, the growth of edtech will slow, particularly for full-stack digital native solutions as schools go back in session, but that growth will still be higher than it was pre-pandemic as broad awareness has lowered the cost of acquisition for edtech companies and ultimately dollars will follow people’s increasingly tech-enabled learning behavior. Tools that are positioned for both classroom and at-home use will weather this transition particularly well.

Beyond that, parents’ increased involvement in their kids’ education and new awareness of online learning will mean that some of the 2-3 hours/day of kids screen time entertainment will shift to take advantage of the increasing array of more enriching online activities that have blossomed over the last year; screen time will become a regular part of extracurricular activities.

Alternatives to traditional universities will also proliferate. Too many university students wind up indebted and without marketable skills after years of study. Shorter more cost-effective alternatives with clear career outcomes like IronHack or Lambda will look even more attractive in the coming months and years as entry paths to the most dynamic parts of the economy.

Finally, we’ll see an increasing focus on communities of learning. There is very little that can’t be learned if you spend long enough studying, but staying motivated is a key struggle for many. Communities of learning peers such as Plato for engineering or Tandem for language learning, hold the promise of harnessing people’s natural social inclinations to provide ongoing motivation for learning.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

Traditionally the biggest hurdle for edtech companies in Europe, particularly in K-12, has been that creating a product that perfectly met the needs of say, the French or German market, made it hard to scale internationally because digital penetration in schools was limited and online learning habits were not standard across countries. Indeed, many of the current European standouts in the space, like Kahoot, focused on the U.S. market from the beginning because building for the U.S. market gave them the opportunity to build significant traction within a single market before facing the challenges of internationalization.

While some regional differences will remain, the massive increase in exposure to online learning we’ve just experienced means that online learning behavior is more similar across countries. On the plus side, this means solutions developed locally can more easily scale globally as a solution for, say, the German market, is now more likely to suit the needs of international users. But by the same token the window to develop a product locally before encountering competition from abroad will be shorter.

In a more competitive market, there will be a premium on solutions that are differentiated not just locally but globally, and the ability to deliver differentiated results in terms of either cost ($/hr of learning), relevance (value of material being learned), efficiency (amount of learning/hour) or engagement (hours of additional time spent learning).

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

Though edtech has grown tremendously over the last 10 months, people’s exposure to online learning has not been a uniformly positive one. Because of the abrupt nature of the transition, traditional learning techniques were often transferred online in cookie-cutter fashion despite the fact that engaging people online requires different techniques. The quality of instruction and learning suffered in these cases. Not to mention the fact that many students lacked the devices and internet access to participate at all.

Five years from now, I expect that the vast majority of learning, particularly in K-12, will happen in the same buildings where learning was taking place in January 2020. That said, I would expect that there is a broader recognition that one-size-fits-all education is highly inefficient both online and offline. Ideally, more proactive use of technology and bottom-up traditional teaching techniques will mean teachers spend more time coaching/motivating and personalizing learning and rote instruction/information exchange can happen largely outside of class.

After high school, I expect there will be a much broader array of options for students. Those that can afford to will likely still opt for in-person on-campus college experiences, but many will opt for abbreviated and/or online courses of study with a proven track record of job placement.

The larger change will happen in the work context where learning will have become much more a part of the ordinary course of business. Training and productivity tools will have merged such that regular training updates people on best practices, and real results inform the next cycle of training. We will all be learning on the job as a matter of course.

Charles Birnbaum, partner, Bessemer Venture Partners

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?
K-12 and higher-ed institutions have been among the slowest industries to adopt the cloud over the past decade. While there are many point solutions that have had success in the market, the unfortunate tailwinds from the pandemic this past year forced faculty, students and parents to quickly get more comfortable using technology and it should prove to be a boon to the edtech industry in the years ahead. Online tutoring, instruction and mentorship has been possible through online platforms and marketplaces for a while now, but customers have now seen it in action.
What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?
This has always been a tough industry when it comes to quickly scaling a go-to-market effort, as companies often deal with long and bureaucratic sales cycles. Despite the growing need for software solutions, we don’t anticipate that changing anytime soon. We often see companies with great products that gain early adoption, but struggle to really scale in the education space unless they find a way to circumvent the K-12 or higher-ed institutions and go directly to the customer.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?
We continue to feel that there is a massive opportunity to close the skills gap problem facing employers, particularly in the U.S. While there are many great companies out there solving this problem, including our own fast-growing portfolio company Guild Education, we also believe that higher education will fundamentally need to change over the next few decades as employers seek specific skills for the information economy and that there will continue to be a quickly emerging middle ground that sits between traditional four-year programs and short-term programs and bootcamps.

Bradley Twohig, partner, Lightspeed Venture Partners

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

In K-12: The concept of a “snow day” is likely gone. Now that schools have operated fully remote and in a hybrid context, the idea of students taking a day off for weather and non-personal-related matters will go away. There is a broader openness to hybrid classrooms and more distanced learning across education. Not just by students who are growing up in a digitally native/digitally first world but now teachers and administrators.

COVID really accelerated digital adoption by teachers and administrators where a lot of the spend/revenue resides. During the pandemic, educators and administrators looked to the solutions they were already having success with to solve for the new needs in distance learning. This meant school-wide adoption moved to broader institutional deployments. In a post-COVID world, we believe a lot of those trends will hold. And the solutions with success both pre-COVID in classroom and in-COVID’s remote setting are now in a position to be leading players in a post-COVID world.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

Being successful in COVID doesn’t necessarily guarantee success post-COVID. Challenges of distribution, budgets, adoption of a particular method/approach, etc. will continue to persist as they did in the past. That said, overall demand in the market for startups to address digital learning has expanded greatly.

We believe monolithic content approaches for major categories of content are fading (math, English/lit, science, social studies, etc.), opening up more targeted and digitally flexible approaches to teaching content. Parts of the traditional content development, distribution and adoption approach of major publishers is fading fast. We think it will be harder for even startups to “dominate” a category as this trend continues, and consolidation is likely to occur as a result.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

Investment in technology for the education sector traditionally has lagged behind other major industries. COVID provided an accelerant/reason to catch up, as traditional offline approaches were no longer valid. I believe it will soon mirror the technology spend of most other major categories of software.

Daniel Pianko, co-founder and managing director, University Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

K-12 edtech pundits will be surprised how quickly learning returns to pre-COVID, in-person levels.  Experts will view the COVID years as lost years for learning with many of the advances in online learning getting thrown out with the frustration with Zoom school.

Conversely, higher education/workforce-oriented training programs have seen the fundamental economics of their operations questioned. College students (and their parents) have seen behind the curtain of higher ed — are we really paying $50,000 per year for a talking head? Parents and employers will fundamentally question the cost model and look to radically shift their focus and investment toward programs that provide more clear onramps to employment — job tech versus edtech will be a theme of 2021.

The biggest change will be the rise of consumer-focused edtech plays, like Outschool and Varsity Tutors. Suddenly parents with the money to pay will more actively seek out additional programing for their children that is not offered by traditional education, exacerbating economic disparity in our country. That was the case before the pandemic, the gaps have only widened, and there’s little reason to believe they won’t keep widening if no action is taken.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

The sales cycle for early stage edtech startups remains the killer. “Crossing the chasm” to real revenue is extremely difficult.

Capital will be extremely cheap to those that can attract Silicon Valley money. But the biggest risk to edtech startups: Silicon Valley-level valuations coupled with slower revenue growth will create long-term mismatch between investor expectations and the pace of change in education.

Edtech entrepreneurs expect to build a great product and assume consumer-like adoption. What they may not realize is that in edtech, the best product almost always loses; the companies with the best sales teams win. Edtech is a distribution game.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

AI-driven learning will systematically shift rote learning toward computer-driven instruction. Efforts to leverage technology to bridge the education divide will be only partially successful. Private funding by wealthy parents will further the equity divide.

Rebecca Kaden, managing partner, Union Square Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

COVID has amplified and accelerated behavioral change that was already happening in an education system ripe for change, largely around showing that there is a much wider variety of ways to learn effectively. I don’t at all believe in-person learning is going away — but I think it is much more likely we see hybrid models emerge where there are places for tools that allow flexibility, personalization and interest-led learning to integrate into education. Parents may have discovered platforms like Outschool (where we are investors) out of a necessity to find replacements to school when things shut down, but we are seeing them continue using them as an AND instead of an OR as things open back up. I also think we will continue to see bold new models, like Sora (where we are also investors), that offer new models of schools for students who have long felt they weren’t right for school when the truth was the school they were in wasn’t right for them.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

We think the most interesting opportunities are the ones going direct to learner — that the most effective and exciting way to change a system is from the outside in and through products and services the end user (here, learner) loves and integrates. We are much more excited about that than the more traditional models selling through systems or districts. The pro of the direct-to-learner is speed, access and agility. The challenge, of course, is that you are asking for behavior change around a system that has long been in place and has changed very little in many decades — we are really seeing this change happen, and it’s exciting, but you need very compelling products to continue to propel it.

How has edtech’s boom impacted your deal-making? Has the new interest from generalist investors made valuations too bubbly, or is the market growth helping everyone?

We are excited to see increased attention on a category that’s in strong need of innovation and new options. USV has been long time investors in learning — portfolio companies like Duolingo, Skillshare, Quizlet, Codecademy have taught us about the value creation possible with direct-to-learner models that make new kind of learning behavior more accessible, both in convenience and price point, from childhood to lifelong. This is one of those categories where more attention and focus is a good thing — but it’s also nuanced so, like in others, we focus on having a clear thesis on what we are looking for and very specifically looking for just that.

Edtech has traditionally had few exits. When do you expect to see that change? Are you optimistic about the boom in funding lately? On the other hand, what consolidation do you expect to see?

I think we are likely to see some significant education exits coming up — the earlier winners in the market are not maturing and have fundamentals that rival strong consumer internet businesses. The market is starting to pay attention. There are more options than ever before for what exits might look like. It all lines up to, I would guess, some likely moves in the next 24 months.

Andreata Muforo, partner, TLCom Capital

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

We believe this remote/in-person tension will remain for at least another year (with the different “waves” in the various geographies), but nonetheless, there are a few interesting learnings already:

Schools need to adjust their offering to be able to move off/online seamlessly.Generally speaking, this remains a very fragmented market with very few “end-to-end” solutions, and even less so in the Africa context.There is a clearer need for systems that can manage both on/offline as well as focus on ease of connectivity, data consumption. Quick feedback loop with teachers and support in online (video) curriculum.The need for high-quality video content (more so “pre-recorded”/asynchronic) is immense for the formal and informal education systems.The ability to offer various progress levels for various students in the same age groups is even more critical when doing remote learning, and managing this is a true challenge for the teachers and schools.

Parents are looking for various solutions to support their kids’ learning, and outside of school they are also looking for “live” (even if online) interactions as kids are staying longer at home and spend less time with live interactions in general (school or other).

To conclude: There is growing demand for “school operating systems” and helping schools move on/offline with video content that can be personalized to the student’s level, with simple systems, minimal tech hardware and connectivity requirements and quick feedback loop from the teacher. In parallel, parents are also looking for (and willing to pay for) extra support and educational activities for their kids and are more open than before to “live video sessions” as well as other forms of digital content, which enrich the students as well as free up and take away some of the burden of the parents needing to home school.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

In Africa, the key issue remains acquiring customers and managing subscriptions over time (recurring payments). There is an interesting question on pricing and positioning, as well as main means (channels) of distribution to the wider population. The high-income families remain fairly connected and can afford higher price points and paying with cards. The lower you aim (middle class, etc.), the more acquisition and distribution channels become critical as well as pricing and ability to retain (and get paid) over time, which have more complex operational challenges tied to them and may require different business models. As this remains a space on which families already spend a very material part of their income (in relative and absolute terms), we strongly believe that we are just scratching the surface, and the opportunity is huge for more edtech solutions and platforms.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

While it is still hard to know what the new normal will be, we believe we will start seeing more combinations of on and offline, higher usage of video and higher level of personalization. With that said, if we learned something in the pandemic, it is that the need for the social aspect and experiential learning (especially in sciences) aspect of schools, universities and education at large is fundamental and will not go away. As such, we believe that schools are here to stay and will remain a very material aspect of providing (and consuming) more digitally oriented education. The pandemic also helped many parents to see from up close the shortcomings of schools (as well as their advantages and difficulties of needing to take larger responsibility for their children’s education), creating a “push” for parents to look for more challenging and broader education in many aspects to complete what they get from the centralized system. All in all, we believe we will see spend on education going up, schools using more technology in their delivery (and others, especially non-hands-on master’s and Ph.D. programs, going fully virtual), and parents looking for more enhancement and enrichment using technology in and outside the formal education system.