Vikas Pota, group chief executive of Tmrw Digital, questions whether edtech is able to catch up with its older siblings in finance and healthcare, and explores its recent – and future – impact
In the wake of London Tech Week and London EdTech Week last June, 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 older, flashier and more established counterparts in healthtech and fintech.
A tangible edtech growth spurt is in evidence. From 2014 to 2017, investment in European edtech start-ups more than tripled in size, from €140m to €490m, with 35% of this €490m 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 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 £20m 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.
A coming of age
London Tech Week, although only six years old, really came of age this year as Theresa May opened it for the first time. The then PM used the occasion to announce a £150m 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 that 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.
We must remember, however, that while UK edtech companies raised £300m 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 on edtech simply aren’t attractive.
Specialist edtech investment funds and accelerators are a large part of the answer, yet these are still few and far between, especially in Europe.
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.
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 careers, 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.
As one of the UK’s fastest-growing industries, with a 22% revenue growth year-over-year, and accounting for four per cent of all UK technology companies, edtch’s steady rise is good news for a country currently facing ongoing Brexit uncertainty. London’s pre-eminent position as a launch pad for edtech start-ups, 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 sector’s upward trend.