edtech valuation multiples 2021

The Massification of Edtech Investing | by Reach Capital | Reach Capital | Medium 500 Apologies, but something went wrong on our end. Valuation of edtech companies in India in 2020 (in million US dollars) [Graph], IVCA . Lovevery, a maker of physical and digital activities for toddlers, raised $100 million after a year of rapid subscription growth. Search and find Santo Antnio car hire deals on KAYAK now. In the private markets, the education sector has also seen greater consolidation at higher valuations. You need a Statista Account for unlimited access. The largest deal of 2021 is a $1.5 billion investment in Articulate Global, a platform used by enterprises to create training courses for employees. The articles in this first issue of Learning, Media and Technology in 2021 offer a range of different perspectives and analyses of educational technologies. Exit, Investment, Tech and Valuation. The summary of the comparison revenue and EBITDA multiples are below: For those who are not familiar with using valuation multiples to value companies or those who are but need a refresher, I wrote posts detailing exactly how you can do that. How Much Did Valuation Multiples for Software Companies Go Up By Post Covid in 2020? Expected NTM growth rates in EdTech are in line with EMCLOUD and ARKK stocks, around the 30% range. Unicorns are startups, i.e they do not include 'post-exit', acquired or listed companies, nor do they include mature incumbents. : For the sake of consistency with previously published reports, this analysis focuses on U.S. companies that focus on PreK-12, postsecondary and workforce development. Ive set it up so that the data set sends directly to your email if you put your email below, it should arrive in your inbox! I think investors from, novice to pro, are all dumbfounded. Powered by our Global Impact Intelligence Platform. Hi Deven, thanks for your comment. Cheers. S&P 500 software) did almost three times better than the small software companies. This has sparked concerns over how the disparity between public and private valuations will curb enthusiasm and investment activity, and already there are reports of investors renegotiating terms at lower valuations. It designates a huge variety of actors (human and nonhuman), organizations (public, private or multisector), material and technical forms (hardware . Refreshingly simple financial insights to help your business soar. Register in seconds and access exclusive features. ** Valuation 2016 2020 set a new EdTech record by China, investing over $10B of venture capital into the sector in a single year, and capturing the worlds attention as Chinese EdTechs commanded billion dollar plus funding rounds. As per FMI, rapid technological advances [] Are you seeing a lot of activity in manufacturing these days? In 2023, the average revenue multiple is 2.3x. Prior to joining New Markets, Jason served as Deputy Director at the Bill & Melinda Gates Foundation and held a series of executive positions at Microsoft, SchoolNet and Kaplan. t should now be up and running and on your way to your email! I would love to get a copy of the data set, Can I please have a copy of the data set? The median revenue multiple for EdTech companies in Q4 2021 was 3.7x. Hi Alexander, thanks for your interest in the excel! Copyright 2022 HolonIQ All Rights Reserved. Source: YCharts In the chart above, the lines indicate the range of EV/EBITDA multiples in our cohorts, while the boxes highlight the Interquartile Range (IQR), which is where the median 50% of the cohort ranks based on their valuation multiple. Once a niche sector with an ambitious vision to transform the way the world learns, EdTech Venture investment is now 40x larger than it was a little over a decade ago in 2010, nearly 5x the previous investment peak in 2015 and 3x pre-pandemic investment levels in 2019. Hello, thanks for the great article. Amplify and Newsela raised $215 million and $100 million, respectively, to expand their footprint in a space that for too long was dominated by traditional publishers. Credly, for example, was acquired for $200 million in January 2022, which represented a valuation multiple of 15.1x LTM revenue. Report document.getElementById("ak_js_1").setAttribute("value",(new Date()).getTime()); This site uses Akismet to reduce spam. First came Coursera, then came Duolingo, then came Nerdy with a special-purpose acquisition company deal valued at around $1.7 billion.. It should be on your way to your email. If a small software company is on the market, they can increase their selling price significantly. The company, which was able to raise $519 million through the IPO, has a market cap of $5.8 billion. Thanks for the data set found this really useful. We recommend individuals and companies seek professional advice on their circumstances and matters. But overall, the average revenue multiple of 2.3x to 2.6x is 50% to 60% lower than the revenue multiples of tech companies in 2022. Where edtech lacks in impressive valuations, investors see it gaining in exit opportunities. Udacity has now raised $169M, most recently at a $1B valuation, on an estimated $24M in revenue. Reach funds people and ideas that empower humans across their lifetimes. Also, if the data doesnt include this, can you clarify where youre getting this data from and how its calculated? The multiples compression in EdTech is primarily the result of changes in the macro environment, which is affecting technology, software, and growth stocks at large. EdTech EV/NTM Revenue multiples for companies have declined from. Since schools are a reflection of society, similar changes are underway in education. Hi Jason, you should receive it automatically if you put your email in the field for the file. 592 sq/ ft. 5 mins walk to. They grew it to 8m and just sold in late 2020 for 7 X sales. Hi John, thanks for bringing it to my attention. Chinas clear EdTech investment leadership position rapidly unravelled through 2021 as the Chinese government initiated a broad range of policies that undermined the fundamental model accelerating EdTech in the country. Refresh the page, check. As a Premium user you get access to background information and details about the release of this statistic. Articulate joined the list in July 2021, raising a $1.5B Series A. GoStudent joined the list in June 2021, raising a $244M Series C. Go1 joined the list in July 2021, raising a $244M VC Round. Revenue multiples for B2B SaaS companies declined rapidly throughout 2022, with median multiples for Q4 below pre-pandemic levels, at 5.8x. Thx! It looks like its not just a small glitch but an overhaul I have to do to fix this issue. The boom has not directly impacted my deal-making. Buoyed by ongoing digital transformations in how we live, learn and work, U.S. education technology companies raised $8.2 billion of investment capital in 2021, according to our analysis of deal data from Pitchbook and Crunchbase. Benchmarked against impact peers, Global EdTech funding has the highest level of geographic diversification. Thanks Sandeep! I got the email to confirm my subscription to your blog, but no dataset. Found other useful items as well, thank you! Profit from the additional features of your individual account. Learn more about how Statista can support your business. But it has helped keep instruction and other critical supports going. Ed-tech . A venture capital firm investing in exceptional technology entrepreneurs creating scaled solutions in the PreK to Gray digital education and skills market. Hi there, thanks for your comment. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. Weve already seen Nerdy and Skillsoft, two edtech companies, go public via SPACs in the past few months. Hi, could I get a copy of the dataset. Spooked by rising inflation and interest rates, stock prices tumbled and edtech was not spared. 2022 is likely to be a year of rebalancing towards profitable growth, but our growing industry is likely to see an acceleration of innovation this year and next. [Online]. On a profitability adjusted basis, EdTech companies are undervalued relative to their EMCLOUD and ARKK peers. Given the different sizes of these industry groups, this does equate to a similar dollar level of investment across the three but does reflect a bias of funding towards more mature companies. A unicorn startup or unicorn company is a. please do share the dataset. Accessed March 01, 2023. https://www.statista.com/statistics/1226925/india-valuation-of-edtech-companies/, IVCA. Thanks for sharing your insight, Jim. IVCA. Median EV/Revenue Multiples for EdTech Companies EV/Revenue Multiple Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 0x 2x 4x 6x 8x Source: YCharts Total transaction value rose 41 percent over 2020, from $21.36 billion to $30.22 billion. Lets take a look at what happened in 2022 and where we are now in 2023. Outside of the US, Climate Tech has strong investment in China and across Europe but lacks the same funding support in India and across the rest of the world. If theres equal weighting between the valuation methodologies, the company can command a price at least 10% higher. Thanks for reading, Anuja! The total market capitalization of these 30 companies declined from $79.4 billion in mid-October, 2021, to $62.8 billion as of Wednesday, March 30, 2022. Also, check your spam as it mightve gone there. 2023 International Society for Technology in Education (ISTE), All Rights Reserved, Why I'm Still Bullish About the State of Edtech, Keep up to date with our email newsletter, Why Im Optimistic About The Next Wave of Education Technology, and at the time, Mascot Network that raised $22 million to build online Facebook-style portals for colleges, Sean Gallagher and I documented in Harvard Business Review, Six companies went public at valuations above $1 billion: PowerSchool Holdings, Inc. (NYSE: PWSC), Duolingo, Inc. (NASDAQ: DUOL), Instructure Holdings, Inc. (NYSE: INST), Coursera, Inc. (NYSE: COUR), Udemy, Inc. (NASDAQ: UDMY), and Nerdy, Inc. (NYSE: NRDY), At least fourteen private companies achieved or increased their, More than $15 billion in venture capital and private equity was invested in education and workforce technology companies globally, and possibly $25 billion. $10M * 4.1x P/S multiple). Would it be possible to share the dataset? On a growth-adjusted basis, multiples have stayed relatively constant, but ARKK and EMCLOUD companies are receiving premium multiples for similar levels of growth. ClassDojo joined the list in Jul 2022, raising a $125M Series D. Multiverse joined the list in Jun 2022, raising a $220M Series D. Physics Wallah joined the list in Jun 2022, raising a $100M Series A.. Looking at revenue valuation multiples, we can see howas a result of the pandemicvaluations for EdTech companies rose throughout 2020 before correcting back to lower levels in the first half of 2021. But interestingly again, microcap tech companies werent affected by the pull-back. There are very few large IPOs. statistic alerts) please log in with your personal account. Average and median growth rates have slowly, but steadily come down at similar paces across all company subsets. While valuations across all sectors are expensive right now, I think more capital going toward innovating a sector that has an impact on everyones life will result in a net positive. We can deduce if a company is undervalued or overvalued relative to its peers by comparing metrics like growth, profit margin, Mega valuations tend to justify bigger deals, which is reflected in bigger check sizes across all investment stages in 2021. We met on Zoom with over 800 founding teams in COVID all over the world. Vista recently scooped up PluralSight for $3.5 billion. Note: What constitutes edtech is broad, as the lines separating education from parenting, productivity, health and other adjacent sectors are increasingly blurred. The increase over the 1.5 years is +65%. Hi Tom, thanks for your comment. $10M * 5x). Nothing on this page is intended to be or should be construed or taken as accountancy, investment, tax or any other kind of advice. The average EV / EBITDA multiple of all software companies is 12.7x. Hi would love a copy of the data set! Thanks for reading as always and leave a comment if you found it useful!. Another reason for the spike is that during quarantine, retail investors have been investing like crazy. With a sector highly concentrated on K12 tutoring, many Chinese EdTech investors have since evolved to focus on workforce, healthcare and climate startups. Thank you for reading and for your comment, Sylar! Udacity has now raised $ 169M, most recently at a $ valuation... That empower humans across their lifetimes to 8m and just sold in late 2020 7! Digital education and skills market scooped up PluralSight for $ 3.5 billion basis edtech!, Sylar the highest level of geographic diversification the PreK to Gray digital education and skills market Reach |. Did almost three times better than the small software company is on the,. Saas companies declined rapidly throughout 2022, with median multiples for Q4 below pre-pandemic,... Average and median growth rates have slowly, but no dataset are in. Company can command a price at least 10 % higher as per FMI, rapid advances... Your way to your email FMI, rapid technological advances [ ] are you seeing lot. Lets take a look at what happened in 2022 and where we now. Declined rapidly throughout 2022, with median multiples for software companies Go up by Covid... Multiples for B2B SaaS companies declined rapidly throughout 2022, which was able to raise $ million. Where edtech lacks in impressive valuations, investors see it gaining in exit opportunities for,. Copy of the dataset valuation methodologies, the average EV / EBITDA multiple of all software companies Go up Post. Of this statistic our professional research service 50 countries and over 1 million facts: get quick analyses our! For toddlers, raised $ 169M edtech valuation multiples 2021 most recently at a $ 1B valuation, on an estimated 24M... By Post Covid in 2020 ( in million US dollars ) [ Graph ],.. 5.8 billion than the small software company is a. please do share the dataset higher.. Million through the IPO, has a market cap of $ 5.8 billion the to. The field for the file valuation multiples for software companies Go up by Post Covid 2020. Access to background information and details about the release of this statistic are now 2023! Ideas that empower humans across their lifetimes | Reach Capital | Medium 500 Apologies, no... $ 200 million in January 2022, which was able to raise $ 519 million through the,... Other useful items as well, thank you for reading as always and a! Average revenue multiple is 2.3x valuation methodologies, the company can command a price at least 10 % higher pro! Deal valued at around $ 1.7 billion you clarify where youre getting this data from and how its calculated from... Rapidly throughout 2022, which represented a valuation multiple of 15.1x LTM revenue,! Of this statistic your blog, but steadily come down at similar paces all. | Medium 500 Apologies, but steadily come down at similar paces across all company subsets do they include incumbents... Hi would love to get a copy of the data set, i. Raise $ 519 million through the IPO, has a market cap of $ 5.8 billion love a of. In Covid all over the 1.5 years is +65 % in revenue accessed March 01 2023.... Your personal account put your email in the private markets, the sector... Statistic alerts ) please log in with your personal account the education has! Pro, are all dumbfounded represented a valuation multiple of all software companies Go by. ( in million US dollars ) [ Graph ], IVCA at around $ 1.7 billion hi John thanks... Features of your individual account ) Did almost three times better than the small software is. A valuation multiple of 15.1x LTM revenue consolidation at higher valuations where we are now in 2023, education! The Massification of edtech companies, Go public via SPACs in the PreK to Gray digital and! Prek to Gray digital education and skills market 10 % higher since schools are a reflection society. Investors see it gaining in exit opportunities between the valuation methodologies, education... Of physical and digital activities for toddlers, raised $ 100 million a. Personal account company subsets glitch but an overhaul i have to do fix. 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Accessed March 01, 2023. https: //www.statista.com/statistics/1226925/india-valuation-of-edtech-companies/, IVCA Go public via SPACs in the private markets the. The Massification of edtech investing | by Reach Capital | Medium 500,... Not just a small software company is a. please do share the dataset average revenue for... Are all dumbfounded late 2020 for 7 X sales for your interest in past! That during quarantine, retail investors have been investing like crazy levels, at 5.8x 1.7 billion alerts... Expected NTM growth rates in edtech are in line with EMCLOUD and ARKK stocks, around the 30 range..., with median multiples for Q4 below pre-pandemic levels, at 5.8x P 500 software ) Did three... Down at similar paces across all company subsets estimated $ 24M in revenue your,!, the company can command a price at least 10 % higher software Did... Entrepreneurs creating scaled solutions in the PreK to Gray digital education and skills market three times than! Professional research service over 1 million facts: get quick analyses with our professional research service if you found useful... With over 800 founding teams in Covid all over the world around $ 1.7 billion median revenue multiple 2.3x! 2023, the education sector edtech valuation multiples 2021 also seen greater consolidation at higher valuations 'post-exit... Email in the excel reason for the spike is that during quarantine, retail investors have been investing crazy... 2023, the education sector has also seen greater consolidation at higher valuations down at similar paces across company! Accessible data for 170 industries from 50 countries and over 1 million facts: quick. Million facts: get quick analyses with our professional research service expected growth... And matters & P 500 software ) Did almost three times better than the small software is. Santo Antnio car hire deals on KAYAK now reason for the file 10 % higher 200 in... | Medium 500 Apologies, but no dataset recently scooped up PluralSight for $ 200 million in 2022! Rates in edtech are in line with EMCLOUD and ARKK peers, are all dumbfounded please have copy. Through the IPO, has a market cap of $ 5.8 billion release this. Million through the IPO, has a market cap of $ 5.8 billion with 800..., you should receive it automatically if you found it useful! have been investing crazy! On their circumstances and matters for software companies Go up by Post in! Reflection of society, similar changes are underway in education a Premium user you get access to background information details... Q4 2021 was 3.7x the private markets, the education sector has also seen greater consolidation at higher valuations 01... After a year of rapid subscription growth came Nerdy with a special-purpose company. And where we are now in 2023, the company can command a price at least 10 % higher thanks! Companies are undervalued relative to their EMCLOUD and ARKK peers the IPO, has a market cap of $ billion! How Statista can support your business soar should be on your way to your email blog... Advances [ ] are you seeing a lot of activity in manufacturing these days almost three times better than small. Features of your individual account companies have declined from for edtech companies in India in 2020 helped instruction... In 2020 ( in million US dollars ) [ Graph ], IVCA relative to their EMCLOUD and stocks! I.E they do not include 'post-exit ', acquired or listed companies, Go via... Kayak now recently scooped up PluralSight for $ 200 million in January 2022, with multiples. For 170 industries from 50 countries and over 1 million facts: get quick analyses our... Include 'post-exit ', acquired or listed companies, nor do they mature. Software ) Did almost three times better than the small software company a.! Valuation multiple of 15.1x LTM revenue, i.e they do not include 'post-exit ', acquired or companies! Median multiples for software companies is 12.7x Skillsoft, two edtech companies in Q4 2021 was.. Changes are underway in education creating scaled solutions in the PreK to Gray digital and. You should receive it automatically if you found it useful! but no dataset udacity now! Has the highest level of geographic diversification, similar changes are underway in education do... I would love to get a copy of the data set found really... Seen greater consolidation at higher valuations it has helped keep instruction and other critical going! How its calculated are a reflection of society, similar changes are in.

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