The ed-tech sector saw mergers and acquisitions worth more than $3.35 billion in the first nine months of 2021, more than three times the combined amounts raised in the previous two years — $416 million in 2020 and $783 million in 2019.
In the first nine months of 2021, M&A activity in the ed-tech sector was worth more than $3.35 billion, nearly three times the consolidated sums of $416 million in 2020 and $783 in 2019.
According to Venture Intelligence data, ed-tech companies raised $3.77 billion in PE-VC funding in the first nine months of 2021, far exceeding the totals of $2.22 billion and $968 million raised in 2020 and 2019.
Larger corporations, such as Byju’s, control a large portion of merger and acquisition activity, with much of the funding concentrated at the top.
This year, India’s ed-tech sector will raise significantly more money than last
According to CB Insights data, global ed-tech companies raised $8.27 billion this year and are expected to raise a total of $11.03 billion this year, compared to $12.63 billion raised last year. The majority of this funding has come from seed, angel, and Series A rounds for early-stage start-ups.
Byju’s has already secured nearly half of the total ed-tech 2021 funding. This year, the company has raised more than $1.5 billion. Byju’s has been involved in four of the five largest ed-tech M&A transactions in 2021, with a market cap of $18 billion. This includes the $1 billion purchase of Aakash Educational Services in January 2021. In July, the company announced plans to expand internationally after paying $600 million for Singapore’s Great Learning and $500 million for ed-tech startup Epic in the United States. Tynker, a code-learning platform based in California, was purchased by it last month for $200 million.
Education, like many other service-oriented businesses and commerce, saw a market opportunity online as a result of the pandemic. Donations this year reflect that. While the ed-tech boom in India has occurred outside of schools, more like private tutoring, a Bengaluru partner at an early stage venture capital firm believes there is a real opportunity in these start-ups and companies working with governments and education boards to develop curriculum better suited for a digital world.
Following a $1.39 billion investment in Byju by Blackstone, Silver Lake, Prosus Ventures, GSV Ventures, and others in March, Softbank, Accel USA, and the Canada Pension Plan Investment Board invested $650 million in Eruditus. In August, Unacademy received $440 million in funding from Softbank, Tiger Global, Temasek, General Atlantic, and Mirae Asset Global Investments.
Industry experts have also highlighted the opportunity to view education as a for-profit industry
The government’s crackdown on the education and test prep industry earlier this year in China, the world’s largest ed-tech market, slowed the sector’s rapid growth, which was primarily caused by the pandemic. Furthermore, the country’s core public school curriculum was prohibited, and students were restricted in terms of when they could attend class. Because of the new regulations, education technology entrepreneurs are scrambling to revamp their business models before they run out of financial runways.
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