Eyeing a major opportunity for disruption, VCs, angels, corporations and private equity investors plowed nearly $1.1B of funding into Ed Tech in 2012. But while nearly 60% of that amount came in the first half of 2012, Ed Tech has seen smaller investments in 2013 even as deal activity remains strong.
As shown in the chart below, H1 2013 claimed 10% more deals for private Ed Tech companies than H1 2012. Deal levels in the first half of 2013 topped those of 2012 in four of the first six months. Like in 2012, the Ed Tech sector is seeing plenty of investment at the Seed/Angel and Series A stages, which combined to take just over 50% of all Ed Tech deals and 30% of all Ed Tech dollars in H1 2013.
While deal activity is up, Ed Tech funding in H1 2013 has not been as strong. Compared to the $650M invested in Ed Tech companies in H1 2012, funding in the first six months of 2013 has seen a 26% drop versus H1 2012 and totaling only $481M. Lynda.com raised $103M from Accel Partners and Spectrum Equity in January 2013 suggesting that more mega-deals might spur larger Ed Tech financing in 2013, but so far, it hasn’t happened. In an earlier research brief, we had dispelled the notion that we were in an Ed Tech bubble and, instead, were in the early part of Ed Tech’s maturation. As in any nascent, hot industry like Ed Tech, there is a lot of hope and hype initially which drives an abundance of early-stage deal activity. Ed Tech remains in this over-hyped phase with the majority of deals still in the early/seed stages and mid-stage financings in H1 2013 claiming just 21% of overall deals.
As might be expected, Ed Tech’s most active investors in H1 2013 consist entirely of early-stage funds and investment firms with a specialized focus on Ed Tech. The top five most active investors by unique company investments are listed below. (Note: A larger list of top Ed Tech investors is available on CB Insights using the Rankings feature.)