While NPR takes a deep dive into government funding for schools, EdSurge is taking a year-long look at the edtech industry, including the latest installment that focuses on the money. With $2.3 billion invested in startups since 2010 and constant press releases about companies getting funding, EdSurge’s analysis looks at who is actually investing in edtech, who is actually receiving the money, the top performance indicators, and perhaps most important, why edtech companies fold.
- As of early 2016 about 14 edtech accelerators graduate over 100 startups each year.
- While the number of edtech investors has grown, the majority are involved in only one K-12 deal a year.
- Although investors will want a pathway to profitability, revenue and revenue growth are the most important performance indicators.
- Seed stage funding accounts for the greatest number of deals, but, predictably, the most money goes to companies during the expansion process.
- The most common business model is institutional (selling directly to schools and districts) followed by freemium institutional (free to teachers and/or students, selling premium offering to schools and/or districts).
- Among the risks facing startups is the saturation of the market causing both difficulty with differentiation to customers among growing numbers of competitors and disinterest from investors because the investors have already funded similar projects.
Read Following Edtech Money, EdSurge (April 2016)