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Why are investors and startups interested in EdTech?

Many companies are trying to facilitate the educational process using digital innovations. Today’s learning is not just about books and lectures, but a variety of resources and engagement methods. Edtech offers new solutions that could improve the quality and increase the speed of learning. It is also expanding into adult education programmes and corporate training programmes.



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Dmitry Krutov, founder and CEO of Skillbox Online University is talking about the technological fusion of traditional education and online projects, EdTech prospects and global trends in approaches to learning.

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Online will merge with offline

Education is one of the fundamental spheres of human life and is characterized by a certain degree of conservatism. Yet educational services are becoming increasingly expensive and change is becoming inevitable. In addition, there is a huge emerging problem in today’s education system: the knowledge acquired becomes obsolete faster than graduates can apply it. Classical learning formats are being replaced by new tools and techniques, many of which have already proved their effectiveness.

Technologies can make the educational process more flexible, accessible and relevant to the labor market. Therefore, the EdTech segment today is one of the most attractive for investors. Experts estimate the current capacity of the global market in different ways: from $160 billion to $250 billion.

Technology is creating new products

Globally, education is characterized by three development vectors, which also act as drivers of investment growth. The classical education system, with rare exceptions, can not adapt to the current market demands. Only 27% of Russians work in the field of education. The gap is partially covered by the EdTech sphere.

Technologies encourage greater involvement of students in the educational process. The majority of today’s students are Generation Z, who feel comfortable  using digital products and gadgets and does not perceive information in the same way as their parents.

For example, an important tool for the young generation Z is virtual and augmented reality. This technology has already become the basis for more than one EdTech project. For example, MEL Science is offering its customers a subscription to a course on chemical phenomena using virtual reality glasses. It should be noted that this VR/AR startup has already attracted financing from large investors twice, $2.5 million in 2016, $2.2 million in 2017, and $6 million in 2018.

New directions in today’s fintech industry

EdTech is developing dozens of different directions today – from preschool to full professional education; from classical programs to hobbies and additional skills. In addition, it is heavily utilized in business: the classical corporate training is being replaced by platforms where knowledge transfer is based on the peer-2-peer principle. Many large companies are abandoning traditional offline professional development programs. Thus, British Telecom with the help of online products saves on corporate education about $12 million annually.

One of the advantages of EdTech projects is the format, which does not close the listener on only one activity (study or work). The student has the opportunity to manage his or her time. In addition, territorial barriers disappear, because in some regions quality education is simply not available.

Trend for “investment in yourself”

The development and promotion of digital education is also linked to the fact that more and more people prefer to invest in their own knowledge. This idea is not new – Benjamin Franklin said: “Investment in knowledge pays the best dividends”. Thanks to its flexibility and availability, EdTech made that principle effective. While traditional investment methods are becoming more and more risky, the contribution to your own knowledge justifies itself.

EdTech is the beginning of a global transformation of the entire education system. The key factor at the moment is the relevance of the knowledge gained from practitioners (often company executives and business leaders). Graduates get a guaranteed chance to apply the acquired skills in practice and become as interesting as possible for a modern employer.


(Featured image by Blake Wisz via Unsplash)

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Valerie Harrison is a mom of two who likes reporting about the world of finance. She learned about the value of investing at a young age upon taking over her family's textile business when she was just a teenager. Valerie's passion for writing can be traced back to working with an editorial team at her corporate job, where she spent significant time working on market analysis and stock market predictions. Her portfolio includes real estate funds, government bonds, and equities in emerging markets such as cannabis, artificial intelligence, and cryptocurrencies.