As the world stays home, edtech’s Q2 venture totals rose sharply – ProWellTech
But an important round has distorted the numbers
My friend is colleague Natasha Mascarenhas he reported a lot about edtech’s pace in 2020. So far by reading its coverage, I have found that not only is edtech less boring than I expected, but it is actually quite interesting on a regular basis.
For example, India Byju purchased WhiteHat Jr., another Indian edtech company, for $ 300 million this week. So what are you thinking, is it just another startup agreement? Yes, but it was an entirely cash transaction, e White Hat Jr. was only 18 months old.
Just tell you that edtech is currently in vogue. Which makes sense: much of the world is repairing itself at home with the school and offices closed.
The exchange explores startups, markets and money. You can read it every morning on Extra Crunch or receive the Exchange newsletter every Saturday.
The COVID-19 era has provided a huge advantage to many software startups, albeit some more than others. Fortunately for its boosters, edtech, after being neglected by VCs due to the expectations of small outputs and long sales cycles thanks to bureaucracy, is one of the sectors that enjoy renewed interest from private investors and customers.
According to a report focused on the Silicon Valley Bank (SVB) markets, edtech venture funding reached local highs in the second quarter of 2020, jumping more than 60% from the first quarter of this year to the second. On an annual basis, Q2’s edtech V2 results have been even more impressive.
But there is some nuance in the data that should mitigate the claims that edtech’s private financing has changed forever.
This morning we separate the SVB data and analyze the edtech funding rounds from the second quarter to see what we can learn. COVID-19 is remaking the global economy as we speak, so it’s up to us to understand its evolving shape.
An edtech boom?
From the front line numbers, you would be forgiven for thinking that Edtech’s Q2 venture capital results were impressive at all levels.
Before digging into the results themselves, here is the chart you need: