I have updated this project with August funding information. As always, the data is freely and openly available via the GitHub repository that powers this site.

August saw more money flow into ed-tech than any other month this year, giving the sector a rebound from July’s dip in both dollars and deal flow. Here are the totals for the month:

  • Amount invested: $338,270,000
  • Number of investments: 19
  • Average investment size: $17,803,000 / Median: $3,200,000
  • Number of acquisitions: 9

The number of investments was up from July; the number of acquisitions was up. The average size of investment was up; the median size of investment was down. The number of investments was almost triple what we saw in August 2015; the total dollar figure was almost five time as much. Funding for 2016 has inched ahead of levels this time last year.

A couple of caveats before ed-tech entrepreneurs break out the champaign to celebrate this uptick:

  1. Your champaign toasts probably got you in this tough place in the first place. I’m still not confident that we’ll see dollars and deals return to their peak levels in 2015. I predict we’ll still see a squeeze as investors are reluctant to throw money around, as much as writers of Techcrunch op-eds try to convince themselves and others that ed-tech is a “big, untapped and safe investor opportunity.” We’re going to see more ed-tech startups lay off employees. General Assembly and Treehouse, two companies working in one of the hottest sub-sectors of ed-tech – “learn-to-code” startups – cut their staff this month, for example. The pressure will be on to find profitability, which is apparently something investors are now looking for. (Go figure!) That means layoffs, pivots (see: Altschool, Coursera), closures, fire-sale acquisitions, and the like.

  2. A quarter of the investments this month were over $40 million: Vipkid ($100 million), Incred ($75 million), Kaltura ($50 million), Galvanize ($45 million), and Panopto ($42.8 million). The rest of the investments were under $5 million. We have seen in recent month an increasing number of these large B and C (and onward) rounds of funding. This is a signal, perhaps, that the startup sector is maturing. Money and power are being consolidated into a handful of startups who’re more likely to survive the “funding crunch.”

  3. My total – $338,270,000 – includes $75 million for Incred, a loan financing company out of India. I know that a lot of ed-tech folks insist that we shouldn’t “count” this as ed-tech, but I think doing so presents a very false picture of the financialization of education. Loan startups remain one of the most funded sectors of ed-tech this year. This is crucial to watch, particularly as we see the US Department of Education experiment with financial aid for “experimental” companies like MOOC providers and coding bootcamps. Without financial aid, students turn to consumer loans. Venture capitalists seem very interested in both these funding sources.

  4. Learn-to-code startups and coding bootcamps have seen around $135 million in investment so far this year – that’s about 10% of all ed-tech investment. (If I include Udemy in this – and that online learning platform does offer a lot of skills training – learn-to-code comprises about 13%.) And again, you cannot talk about this without talking about education-focused loan startups, which have raised about $230 million in 2016.

Audrey Watters


Who's Funding Education Technology?

A Hack Education Project

Back to Archives