Education is a $4 trillion market globally in urgent need of overall — so where within education are top venture capitalists optimistic about startups building large businesses by providing new solutions?
According to EdSurge, $1.45 billion of venture capital (a mere 1.1% of the $130 billion in US venture funding) was invested in education startups in the US in 2018; there were only 112 education-focused deals. In line with the trend in venture capital overall, this represented an increase in overall capital but a concentration in fewer deals (mainly large late-stage rounds).
Education is regarded as a tough market for achieving VC scale returns. Selling into school districts and universities is difficult and slow, and freemium models that go direct-to-teachers have struggled to monetize.