Education is not a hot area for venture investors lately.

So far in 2024, startups in the space have pulled in just over $1 billion in total funding, 1 per Crunchbase data. Consequently, investment in edtech is on track to hit its lowest total in years.

For a sense of how steeply funding has fallen, we charted out total annual investment and deal counts since 2019 below. As you can see, the education space is not showing signs of a rebound.

For U.S. investment, the pattern looks much the same. Investment is still far below where it was even before the 2021 market peak.

It’s not a great time for exits either. We haven’t seen a big IPO for a venture-backed edtech company in quite a while. Large acquisitions also haven’t been happening lately.

Not a growth problem

What gives? Clearly it’s not a demand problem. Across the world, more people than ever are receiving formal schooling.

Enrollment numbers continue to grow too, especially for higher education. The World Bank predicts the number of post-secondary students will rise from an estimated 220 million in 2021 to 380 million by 2030.

Nor is adoption of edtech waning. In coming years, edtech is expected to grow at a faster pace than the overall global education sector, per Morgan Stanley analysts, supported by increased internet access and the high scalability of edtech business models.

These aren’t small numbers either. Morgan Stanley projects global edtech spending to increase from $250 billion in 2022 to $620 billion in 2030.

Maybe an ROI problem

Despite all that growth, however, it’s been a while since we’ve seen a really big investment success story out of the edtech startup space.

The last time we saw a string of sizable IPOs was 2021, when venture-backed unicorns Duolingo, Coursera and Udemy went public. Since then, shares of language learning platform Duolingo have held up well. But Coursera, a higher-education course provider, and Udemy, a skills training marketplace, are well below their debut prices.

Investors also were clearly counting on more big outcomes in 2021, when funding to education (and venture investment overall) hit an all-time high. In 2021 and 2022, there were more than 60 education-related financings of $100 million or more, per Crunchbase data.

Of those, by far the largest funding recipient — and most famous edtech unicorn gone awry — is India’s BYJU’s. The online tutoring and educational content provider to millions had a reported $22 billion valuation at its 2022 peak.

Unfortunately, since then BYJU’s has served as more of a cautionary tale than an inspiring example. In the past few quarters, the company has faced charges of deceptive marketing practices, carried out large-scale layoffs, and filed for bankruptcy for its U.S. division, among other woes. It was recently valued at a reported $1 billion.

Other edtech unicorns haven’t secured new funding in a while. Bangalore-based online learning app provider Unacademy, for example, raised over $800 million between 2017 and 2021. But the company, which has had multiple rounds of job cuts since then, has not closed on a new round in nearly three years.

Denver-based Guild, which works with employers to provide upskilling and higher-education offerings to workers, has also carried out large layoffs. The company has raised over $640 million to date, securing its last round two years ago.

One bit of positive news came this year from Vienna-based online tutoring marketplace GoStudent, which reportedly is now profitable. The startup previously raised over $780 million in equity funding, and carried out multiple rounds of layoffs in recent quarters.

So, who is getting funded?

But, that’s enough about who’s not getting funded lately. More pertinent for startups in the space is who has been managing to secure fresh financing in a challenging climate.

We used Crunchbase data to put together a list of seven intriguing startups that raised financings of $20 million or more this year.

Up from here?

Optimists could make a case that education and edtech startup funding should see upward movement from here. After all, the problems edtech startups set out to solve haven’t gone away.

As AI capabilities advance, we’d also expect to see more investment in startups that leverage the technology for education (in use cases other than cheating.) And even as several edtech unicorns have seen their fortunes falter, there’s nothing clearly stopping a new generation from emerging.

For now, though, edtech investment levels remain far from recovery territory.

Related Crunchbase Pro list:

• Edtech And Education-Related Startup Funding

Illustration: Dom Guzman