The Prediction of American Educational Technology Market: Many Losers and A Little Winners (II)

In 2018, 112 publicly disclosed transactions totaled $1.45 billion. According to the financing round, the total investment of 1.45 billion US dollars is mostly concentrated in later transactions. It is also worth noting that the number of angel investments and seed investments continues to decline, from more than 100 peaks in 2013 to less than half in 2018. This decline is also related to the decline of educational technology accelerators, which have helped spawn many early startups. Despite this, early education startups still have a lot of money available. Seed investments continue to generate new funds, including some university-affiliated funds and family financial funds. Over the years, the seed round’s financing scale has risen–the threshold for seed round financing is also rising: in the past, seed financing as long as a proof of concept, galvanized steel tubing suppliers a talented team and some early customers are enough, but now, investors hope to participate You will see $500,000 to $1 million in revenue before investing in the seed round.

For educational technology companies, the era of loose money marked by pre-revenue financing may have ended. In 2010 and 2011, it was more common to make money easier. At that time, investment in education technology was still at an early stage, and a large number of new ideas, new companies and new investments emerged, which led to the popularity of such financing transactions. But today, the number of people who rely on the ”freemium” model to get funding is much smaller. Although this proposal has driven the development of startups like ClassDojo and Remind, it turns out that other companies like Edmodo have created challenges. Over time, investors understand which business models are effective and which are not. Some people have fled the industry, and the people who stay have become picky and cautious.

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