Education technology (or EdTech) has become a major focus area for venture capitalists with 324 companies building education-oriented tools & services raking in $1.43 billion between Q2’11 to Q2’12. Since 2011, CB Insights data shows an average of 64 venture capital financings per quarter to education focused startups Deal activity peaked in the second half of 2012, with 58 deals in the first quarter and 83 in the second but with recent notable financings such as Udacity’s $15 million from Andreessen Horowitz, sentiment to the space clearly remains high. Funding per quarter has also been significant with ed tech startups pulling down an average of $286.56 million per quarter over the Q2’11 to Q2’12 period.
As you can see in the chart below, funding and deal activity took a break after hitting record levels in Q2’11 but continues to mount a slow but steady come back. Venture capital funding to Ed Tech has remained choppy after Q2’11 but Q2’12 did see a slight increase in funding, in addition to a significantly jump in deals, coming in at the best levels in the last 5 quarters.
The Q2’12 funding pop to EdTech can be attributed to several mega deals as some companies that had previously raised early stage seed and Series A funding came back to the well looking for larger financing rounds to help them scale their businesses.