Global ed tech venture funding reached a low not seen since 2014, topping out at just $580 million during Q1 2024, according to an analysis from global market data platform HolonIQ.
The past decade has seen $80 billion in venture capital flow into the space, with the global market spiking to a whopping $16 billion in 2020 and $20.8 billion in 2021 during the height of the COVID-19 pandemic. Overall, ed tech venture funding in 2023 reached just $2.97 billion, down 86% from 2021’s all-time high.
The boom in demand during that period happened as school districts and colleges scrambled for digital platforms and solutions for remote learning. At the same time, the space is being impacted by the artificial intelligence hype cycle — or the level of comfort and risk associated with adoption during a technology’s life cycle stages, from initial development to commercial availability to its eventual decline.
Both of these factors are making it difficult to interpret long-term trends, the analysis said. As a result, it’s expected that there will be less startup funding to go around for the “next wave of ‘over-promise’ and ‘hard-to-deliver’ projects” than there was five to 10 years ago.
Another analysis earlier this year from venture capital firm Reach Capital predicted that ed tech “may not be far away” from seeing an investment influx similar to previous years amid the growing embrace of AI, as that space raised nearly $50 billion in funding in 2023 across all industries.
In the U.S. specifically, the HolonIQ analysis found Q1 2024 ed tech venture funding capped off at around $300 million, leaving significant ground to cover between the $1 billion total for 2014 and the peak of $8.3 billion in 2021.
Last year, a HolonIQ analysis predicted global venture funding in ed tech would return to pre-pandemic levels in 2023 after falling 49% to $10.6 billion in 2022 from a record $20.8 billion in 2021.
Dive Awards
