Prepping for Exit - a Founder’s Perspective on M&A - Issue #31

Edtech valuations aren’t skyrocketing, but investors see more exit opportunities. Less than a year after we put out an initial temperature check survey, it’s clear that specialist investors are even more bullish on edtech. Bears are hard to find right now: the sector, once undercapitalized, has brought in $10 billion in venture capital funding globally in 2020. As investors told us last week, the biggest consumer opportunity in 2021 and beyond is lifelong learning (and portfolio companies have the profits to prove it).

K-12 School Closures and the Sudden Shift to Remote Learning Exposes Existing Inequities in Education New report documents differences in students’ learning experiences in school and at home Irvine, California - The sudden and unplanned shift to remote e-learning caused by the pandemic last spring resulted in a national awakening on the challenges of learning continuity when not every student has appropriate, safe and consistent access to digital tools and the Internet outside of school.

A Record Year Amid a Pandemic: US Edtech Raises $2.2 Billion in 2020. A most disruptive year to schools and society proved lucrative for the education industry, particularly for those raising private capital. In 2020, U.S. education technology startups raised over $2.2 billion in venture and private equity capital across 130 deals, according to the EdSurge edtech funding database. That’s a nearly 30 percent increase from the $1.7 billion invested in 2019, which was spread across 105 deals.

Is 2020 bringing more edtech rounds than ever, or does it simply feel that way? Venture capital activity is high at the moment, making it difficult to keep up with the influx of new rounds that are being announced. Our cup runneth over, and I would much rather be busy than bored, but not all sectors are as busy as others. We’re not drowning in consumer social rounds, for example. We are, however, seemingly suffering from a deluge of edtech investments.

1 big thing: Missed school will cost U.S. trillions Anyone who hires — or ever will — should worry about this: COVID will leave a less-skilled America … High-school dropouts are projected to spike. The pandemic’s disruption of in-person school is triggering long-term economic consequences to the tune of trillions of dollars.