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.
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|
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