5 Reasons To Invest In An Edtech Startup [Latest]

Introduction

Educational Technology or EdTech Companies was started as an experiment in the mid-sixties by Stanford University professors. The concept here was simple – teach arithmetic and spellings to elementary school students using computers. And this was even before the internet was introduced.

This influx of edtech tools are changing classrooms in a variety of ways:edtech robots are making it easy for students to stay engaged through fun forms of learning;

IoT devices are being hailed for their ability to create digital classrooms for students, whether they’re physically in school, on the bus or at home; even machine learning and blockchain tools are assisting teachers with grading tests and holding students accountable for homework. 

The potential for scalable individualized learning has played an important role in tech’s ascendance. The way we learn, how we interact with classmates and teachers, and our overall enthusiasm for the same subjects is not a one-size-fits-all situation.

Everyone learns at their own pace and in their own style.

Two areas in which investors are particularly interested are education technology (EdTech Companies) and Financial Tech (FinTech). Startups in both of these fields have the potential to completely transform their sectors.

What is Edtech?

Defining EdTech can be elusive because of its vast use case and constant evolution of technology from time to time.

However, it’s not the technology but the aim that defines the true essence of EdTech – utilizing technological resources to improve the education system, pedagogy and ultimately enhancing the learners’ performance.

As per Investopedia –  

EdTech refers to software designed to enhance teacher-led learning in classrooms and improve students’ education outcomes.

EdTech is in the early stages of development but it shows promise as a method of customizing the curriculum for a student’s ability level by introducing and reinforcing new content at a pace the student can handle.

EdTech is a portmanteau of “education” and “technology”.

One of the best examples of EdTech Companies is AI. 

Artificial Intelligence has already made its mark to boost efficiency and productivity in different industries. Even education is one of them.

One of the issues that teachers and educators have been facing for years is providing individual attention to the students in a class of many.

Every student in the class has different learning patterns and even a different pace of grasping things. But since we have been following the traditional model of one-size-fits-all education, individual learning is neglected.

Here, artificial intelligence and machine learning have solved the problem. Well, before we go ahead into reasons to invest in an edtech startup, let’s checkout Darya Yegorina’s 5 learning’s on building an Edtech startup.

Why Invest In EdTech?

1.Making learning a lifelong process

The concept of acquiring knowledge at school and applying it in the workplace seems to be obsolete. The reason being – learning is not something to be left behind after completion of school or college but it is a lifelong process.

In fact, in this rapidly changing competitive world, irrespective of age, it becomes imperative to keep on updating your skill sets.

And EdTech Companies is making this concept of continuous learning possible. Whether it be updating knowledge and skills for better employability, casual learning for hobbies and personal interest or even reskilling for a career change Edtech is at the disposal.

A report by KPMG and Google states online education is the primary source of learning between the ages of 21 to 50+.

2. Personalized learning experience

EdTech Companies opens up opportunities for educators to craft personalized learning plans for each of their students. This approach aims to customize learning based on a student’s strengths, skills, and interests.

Video content tools help students learn at their own pace and because students can pause and rewind lectures, these videos can help students fully grasp lessons.

With analytics, teachers can see which students had trouble with certain lessons and offer further help on the subject.

Instead of relying on stress-inducing testing to measure academic success, educators are now turning to apps that consistently measure overall aptitude.

Constant measurements display learning trends that teachers can use to craft specialized learning plans based on each student’s strengths and weaknesses or, more importantly, find negative trends that can be proactively thwarted with intervention.

3.Attractive to investors

The Big Four have been investing billions into EdTech for years now. Giants like Apple, Google, Amazon, and Microsoft, see two significant benefits to conquering the education market.

First, they get to create lifelong fans by addicting students to their products from early on. Second, software giants realize the trillion-dollar potential of the market that has long been ignored by IT.

The year 2015 has been lauded as the most successful in terms of EdTech investment with estimated total funding from almost $3.5 billion to whopping $6.5 billion.

But after a brief nosedive in 2016, private capital injections in EdTech are on the rise again. The lion’s share of money flows towards established powerhouses like Udemy, but the daring upstart startups will also get their piece of VC pie.

There are even venture funds that invest in EdTech only. 

4. Unexplored opportunities

While the changes in education are often people-based, rather than technology-based, the businesses need to adapt to fit the market.

Despite the mixed reality being popular with investors, there were few companies utilizing it in EdTech. Besides Google Expeditions there were hardly any new AR/VR apps for education in 2017.

And that presents an opportunity for those with an idea and a technical knack. Mixed reality can be a boon for a student and teacher alike, so companies that can find a good way to bring it to the classroom are bound to join the unicorn club.

Gamification is another field where there was surprisingly little development last year. While receiving a fair amount of publicity, the approach has somewhat lost its appeal to the startup founders.

Gamification itself still remains a powerful tool, waiting for someone to use it wisely and profitably.

5. Emerging technology and tools in E-learning

The virtual IT world has turned from a separate industry into a platform for the development of all other sectors— science, production, everyday life, and education.

It is an education where tech innovations can bring real, tangible benefits. Take VR and AR. Despite the associated costs, the introduction of AR and VR technologies can significantly reduce expenses on real exhibits.

For example, in medicine, engineering or construction. 

The explosion of augmented and virtual reality, robots, 3D technology, using AI for apps have implications for eLearning software development that haven’t been seen before.

NOTE:You should also check 20 Of The Best SaaS Startups in India In 2020 

Conclusion

Tech startups, in general, have been “hot” for a number of years now. Innovators have developed apps to meet business, entertainment and other needs; other startups have designed a myriad of new technologies and have sought investors in order to develop and scale their innovations.

Edtech is the practice of introducing IT tools into the classroom to create a more engaging, inclusive and individualized learning experience.

Today’s classrooms have moved beyond the clunky desktop computers that were once the norm and are now tech-infused with tablets, interactive online courses and even robots that can take notes and record lectures for students who are ill.

Edtech tools make it easier for teachers to create individualized lesson plans and learning experiences that foster a sense of inclusivity and boost the learning capabilities of all students, no matter their age or learning abilities.

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