Financing to ed tech companies peaked in 2015, with over 500 deals worth nearly $3.3B in aggregate. Interest has lagged this year, and if deals continue at their current rate ed tech will see fewer than 450 deals in full-year 2016, putting the industry below 2014 deal levels.
However, on a quarter-on-quarter basis, deals and funding crept up in the most recent quarter. Q2’16 ed tech deals increased slightly from the previous quarter, and funding jumped 30% to $564M.
Annual deals and dollars
Ed tech startups have attracted 222 funding deals so far this year, worth $999M in total. Deals and funding to the sector grew for three consecutive years to a peak in 2015, but as previously mentioned this year will fall below 2014 levels.
Quarterly deals and dollars
Ed tech saw 112 deals worth $564M in Q2’16, marking the second quarter of quarterly deal count growth. However, deals still remain below their peak of 147 in Q1’15.
The largest deal in Q2’16 was a $150M private equity round by Iconiq Capital to Age of Learning, the California-based provider of early childhood-learning software called ABCmouse.com. This was followed by a $60M Series D to Udemy, led by Naspers, and a $40M corporate minority round to Beijing-based mobile learning platform Yuanfudao by Tencent.
Funding dollars peaked in Q4’15 based on four mega-rounds; a $230M corporate minority to HotChalk, by Bertelsmann, TutorGroup’s $200M Series C, HuJiang’s $157M Series D, and Udacity’s $105M Series D.
Most well-funded VC-backed ed tech companies
Shanghai-based English-learning platform TutorGroup is the most well-funded VC-backed ed tech startup, having raised $315M in disclosed funding. California-based HotChalk, which develops online education platforms for schools and provides online content, ranks second, and professional learning platform Pluralsight ranks third.
| Rank | Company | Disclosed Funding ($M) | Select Investors |
|---|---|---|---|
| 1 | TutorGroup | $315M | Alibaba Group, Qiming Venture Partners, Goldman Sachs |
| 2 | HotChalk | $249M | Bertelsmann, McGraw-Hill Ventures, Mohr Davidow Ventures |
| 3 | Pluralsight | $208M | Insight Venture Partners, Rethink Education, Felicis Ventures |
| 4 | Udemy | $173M | MHS Capital, Insight Venture Partners, 500 Startups, Norwest Venture Partners |
| 5 | Desire2Learn | $165M | NEA, OMERS Ventures |
| 6 | Udacity | $161M | CRV, Google Ventures, Andreessen Horowitz |
| 7 | Knewton | $157M | First Round Capital, Accel Partners, Bessemer Venture Partners, FirstMark Capital |
| 8 | Coursera | $146M | Kleiner Perkins Caufield & Byers, NEA, Learn Capital |
| 9 | AltSchool | $136M | First Round Capital, Andreessen Horowitz, Harrison Metal |
| 10 | 17Zuoye | $135M | Shunwei Capital Partners, Tiger Management Corp |
Want more data about ed tech startup financing trends? Login to CB Insights or sign up for free below.
If you aren’t already a client, sign up for a free trial to learn more about our platform.