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Edtech Startups Flocked To The Public Markets During The Pandemic. Here’s What That Could Mean For 2022

Illustration of graduation. cap with paper money tassle. [Li Anne Dias]

Edtech and IPOs went together in 2021 like two people kissing in a tree, as the kids would say. First came Coursera, then came Duolingo, then came Nerdy with a special-purpose acquisition company deal valued at around $1.7 billion.

The boom in successful edtech IPOs and other exit moves in the sector via SPACs or mergers and acquisitions were pushed forward primarily by the COVID-19 pandemic. But the changes seen in the sector have been more nuanced than simply pointing to a pandemic, industry experts say.

For one, the United States has been laying the groundwork for more accessible online education and work through broadband infrastructure over the past decade, which contributed significantly to the country’s ability to grow and adopt the technology, said Ian Chiu, managing director at Owl Ventures, which focuses on edtech investing.

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Then the pandemic hit and the entire country rushed to solve the second part of the U.S.’ connectivity infrastructure hangup: Laptops or personal computers and hotspots that some people simply couldn’t afford or didn’t have for one reason or another. Suddenly, those devices became a must-have for students, and programs in cities, counties, school districts and even private industry helped fill in many of the blanks.

Edtech adoption “had been happening a bit more steadily at the beginning, and then COVID accelerated a lot of that,” Chiu said. “In many ways, it’s very similar to what SARS did for e-commerce a couple of decades ago. We think we’re right at the beginning of this digital transformation within education, that the spend will continue to grow and the global markets for this opportunity will continue to be very, very compelling.”

Another shift in edtech trends came from China’s regulatory crackdown on the edtech space this year.

The new government oversight seems to have cooled off sector investment in China, where edtech startups had been leading the industry for years. That offered companies in other countries, including the United States, a larger platform—though that doesn’t mean that Chinese edtech is out of the investing picture entirely.

Below are some of the biggest edtech industry moves, from IPOs to SPACs and M&A, that happened in 2021—and what they could mean for the sector in 2022.


Coursera: As a private company, Coursera raised more than $443 million in funding, according to Crunchbase data. In March, it was valued at $4.3 billion as it prepared to go public on the New York Stock Exchange, but the market was even more bullish on the company—at first. Shares closed at $45 apiece 36 percent higher than the company expected on its first day of trading, leaving it with a market cap of $5.9 billion. Since then, they’ve dipped to around $24 apiece as of mid-December.


Zhangmen: Chinese online tutoring platform Zhangmen completed an IPO on the New York Stock Exchange in June, closing its first day of trading up nearly 44 percent from its offer price and raising almost $42 million. But the company’s nearly $17 share price at the close of its first day on the stock market has since dropped to about $1.13 as of mid-December. The company raised at least $902.3 million over seven funding rounds before going public, according to Crunchbase data.


Instructure: Salt Lake City-based Instructure, which makes popular learning management system Canvas, raised $250 million in its July initial public offering. Unlike most other edtech companies on this list, Instructure’s shares have gained value since its IPO, when shares went for nearly $21 at the market’s close. As of mid-December, they were valued at almost $23 apiece.

Duolingo: In July, Duolingo arrived on the Nasdaq with a $6.5 billion valuation, raising $521 million through its IPO and closing out its first day of trading at about $140 a share, up nearly 40 percent. As of mid-December share prices had dipped to $104 apiece. The language learning platform had raised at least $183 million in funding as a private company.

PowerSchool: Folsom, California-based PowerSchool sold 39.5 million shares at almost $18 apiece in its IPO, raising $710.5 million. That meant the company, which develops cloud-based software for K-12 education, was valued at about $3.5 billion following the public offering. Since then, its stock price grew, before settling back in at about $17 a share in mid-December.


Nerdy: Nerdy, which owns the popular Varsity Tutors, went public via SPAC in a deal valued at about $1.7 billion in September. The deal gave the St. Louis-based company up to $750 million in proceeds when it started trading on the NYSE. Since that deal, on Sept. 20, share prices have more than halved, going from $11.20 apiece to about $5 in mid-December. 


Udemy: San Francisco-based Udemy, which offers online courses for professional skills in technology and business, went public Oct. 29. It started the day selling shares at $29 apiece, but closed the day at $27.50 per share, still valuing the company at around $3.8 billion. After an initial surge in stock prices in November, shares were trending downward and valued at about $17.50 in mid-December.

Anthology and Blackboard: Boca Raton, Florida-based Anthology and Reston, Virginia-based Blackboard announced in September their plans to merge in an effort to “create the most comprehensive and modern edtech ecosystem at a global scale for education.” In other words, they were to become an edtech software behemoth for higher education. By October, the merger was official.

Look ahead

BYJU’S: India-based BYJU’S had a busy year, acquiring Singapore-based Great Learning for $600 million, then Redwood City, California-based Epic for $500 million and finally India-based Aakash Educational Services for around $1 billion, tech marketplace G2 outlined in its recent report on the edtech boom. Now, BYJU’S is rumored to be considering going public in the United States through a SPAC, according to the Economic Times. 

Despite the dips in stock prices of many companies that did IPOs this year, investor interest in the industry seems to be as bullish as it was when the year started—if not even greater, Eurie Kim, a partner at Forerunner Ventures told Crunchbase news.

The infrastructure progress for digital learning also excites Kim as much as it does Chiu at Owl Ventures. With that in place, Kim said she sees a future where edtech is a centerpiece for education.

“The biggest shift is that before COVID, it was all supplemental, nice-to-have education that was digital,” she said. “Now, I think we’re really going to start to see real core education move forward on the digital track and ask ‘How do you supplement schools that don’t have resources for some of these classes?’ Can some of these platforms like Juni, Coursera or some of the other bigger platforms start to enable more access to quality education?”

Perhaps the answer to that question will become more clear in 2022.

Illustration: Li-Anne Dias

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