• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • Subscribe
  • facebook
  • instagram
  • RSS
  • RSMUS.com

The Real Economy Blog

Search

  • Economics
  • Technology
  • Consumer
  • Industrials
  • Finance
  • Real Estate
  • Health Care
  • Life Sciences
Home > Coronavirus > Education technology will be crucial this school year, could see record venture capital in 2020

Education technology will be crucial this school year, could see record venture capital in 2020

Jul. 28, 2020 by Kurt Shenk and Victor Kao

  • email
  • Twitter
  • Facebook
  • Linkedin

As fall draws near, school districts, educators and parents are trying to figure out what educational plans will look like for students and teachers in the 2020-2021 academic year. Earlier in the pandemic, UNESCO estimated that nearly 1.5 billion learners globally were affected by school closures. On July 17, California Gov. Gavin Newsom ordered all schools in more than 30 counties to have remote classes for the upcoming school year. Chicago Public Schools plans to use a hybrid model of remote learning and in-person teaching. New York City also plans to use a blended model.

Given the enormous upheaval the education system will face in the coming year because of the coronavirus pandemic, technology will undoubtedly play a bigger role in connecting students to their teachers.

Schools are adopting more technology, but challenges remain

Historically, education systems have lagged in the adoption of technology. Less than 3% of global education expenditure is spent on technology, according to education market insights company HolonIQ. Prior to the pandemic, learning management systems such as Blackboard and Canvas provided online platforms where teachers could interact with their students. Technological applications in the education space have continued to evolve. Some schools are now using technologies such as artificial intelligence and virtual reality to provide engaging learning experiences for students.

The wealth of knowledge available online can enable students in their learning, yes, but it can also be a roadblock to education when students use it as a shortcut. With the ubiquity of smartphones and constant internet connection, some students might be inclined to turn to Google for answers. The fact that some students have a computer and high-speed internet at home and others do not is another crucial educational access issue the pandemic has underscored. Unequal school funding also contributes to uneven access to technology.

Since the pandemic shuttered schools around the country earlier this year, teachers have been navigating a massive shift in the way they do their jobs, substituting remote teaching for in-person classrooms. However, educational services is the top industry for jobs that can be performed at home, according to the National Bureau of Economic Research. That is not to say this shift has been or will be easy, but ed tech companies provide possibilities to make remote teaching more feasible.

Ed tech venture capital could have a record-setting year

Education technology companies typically develop software or hardware that is used to enrich teaching and enhance student outcomes. Ed tech will enable remote learning for many students this upcoming school year, and startups in this sector are often heavily reliant on venture capital to fund their business models.

Venture capital raised by education technology companies has surpassed $4 billion in the first two quarters of this year, nearly eclipsing the venture capital raised in by ed tech companies in all of 2019. One notable venture capital round raised in Q2 of 2020 include the Series E $100 million round raised by MasterClass, an e-learning platform. Coursera, another ed tech platform, announced in July that they have raised $130 million in a Series F round of financing.

The global ed tech sector is expected to double in coming years, reaching $341 billion by 2025, according to HolonIQ.

Technology provides alternatives to more traditional education models

The skyrocketing cost of higher education in recent years has become a barrier for some potential applicants. Simultaneously, more young adults are questioning whether higher education is worth the debt it typically incurs. This is evidenced by eight consecutive years of declining U.S. college enrollments, according to the National Student Clearinghouse Research Center. In the fall of 2019, enrollments in postsecondary education dropped by 1.3% according to a report from that group.

Along with costs associated with higher education, the COVID-19 pandemic has added another factor for students to consider. Some ed tech companies have offerings that may help some students continue educational pursuits during this uncertain time. Those include Coursera’s platform, which students can subscribe to for less than $100 each month in order to take a class and receive a certificate upon completion.

Other middle market tech companies such as Vemo Education offer a platform for income-based financing that benefits both the school and the student. Through an income share agreement, students have an opportunity to attend a school they might not have been able to enroll in otherwise, in exchange for a percentage of the student’s earnings over an agreed upon period of time. Vemo is also vested in the student’s completion of higher education and their success in a career.

Beyond specific companies in the education space, we also expect that blockchain technology will be more widely used by schools in the future. Experts believe that blockchain will be able to “transform the ‘record keeping’ of degrees, certificates and diplomas,” according to a 2019 report from Gartner.

Machine learning provides opportunity

One technology that we expect to be particularly transformative for schools well into the future is machine learning. For K-12 students, for instance, machine learning technology can help bridge the gap between over-performing and underperforming students by determining where they are on the learning spectrum and tailoring the curriculum to each student’s needs. When machine learning and the data from an ed tech platform are used appropriately, these tools can help predict the likelihood of a student passing a class and graduating from the school.

The upcoming school year will almost certainly be a tumultuous one, full of uncertainty for parents, students and teachers alike. Ed tech applications may be able to help connect teachers and students in new ways as they try to adapt to this enormous disruption.

For more on the back-to-school economy:

  • Student housing, once a beacon of stability, is now vulnerable.
  • The back-to-school debate and its impact on the real economy.

For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

  • email
  • Twitter
  • Facebook
  • Linkedin

Related posts

  • Venture capital tech investments show strength in first half of 2019

    For cash-intensive technology companies, access to capital is often required to sustain operations and quickly achieve scale. Venture capital firms invested over $30 billion in tech startups in the second quarter of 2019, according to data from Pitchbook,…

  • Office Building
    Technology industry pressured by global issues in near term

    Macroeconomic indicators signal slowing growth in 2019, and the tech industry is likely to follow suit. Adding to concerns is the future of the trade spat between China and the United States, which remains unclear. As a result, some U.S.…

  • Coronavirus epidemic threatens technology global supply chain

    Coronavirus deaths continue to rise Recently, we’ve seen significant volatility within the global market as investors continue to weigh the overall impact of the coronavirus (2019-nCoV).  While a vaccine from drugmaker Gilead Sciences Inc. brings a glimmer of…

Filed Under: Coronavirus, Tech, Media and Telecom Tagged With: coronavirus, distance learning, ed tech, education, technology, virtual reality

About Kurt Shenk

@kurt_shenk

In January 2018, Kurt was selected as a senior analyst in RSM’s cutting-edge Industry Eminence Program, which positions participants to understand, forecast and communicate economic, business and technology trends shaping the industries RSM serves. Senior analysts advise clients on conditions impacting middle market leaders. Kurt’s focus is the technology industry.

Kurt has over nine years of audit and accounting experience, serving innovative venture- and private equity-backed technology clients. His responsibilities include working to assure effective and efficient planning, execution and wrap up of engagements. His proactive approach toward client service is the foundation of the strong client relationships that he maintains.

About Victor Kao

@victorkao4

Victor provides a unique blend of accounting, operations, and IT subject matter expertise, and leads a wide spectrum of projects including internal audit, Sarbanes-Oxley compliance, systems organization controls readiness and attestation, business process improvement, and information technology assessment services. Prior to joining RSM, Victor served in senior management roles in a variety of industries, including consumer products, food and beverage, technology, banking, and financial services. Currently, Victor’s core industry and subject matter expertise lies within technology.

Victor has substantial IT risk advisory experience leading and coordinating ERP software selections and implementations, IT general controls review, segregation of duties analysis, cybersecurity, and system and organization controls readiness and attestation. In 2018, Victor was selected as a senior analyst in RSM’s cutting edge Industry Eminence Program, which positions participants to understand, forecast and communicate economic, business and technology trends shaping the industries RSM serves. These senior analysts advise clients on conditions impacting middle market leaders.

Primary Sidebar

Read RSM analysts’ industry coverage of coronavirus.

Categories

  • Economics
  • Technology
  • Consumer Products
  • Industrials
  • Financial Services
  • Real Estate
  • Health Care
  • Life Sciences

Recent Technology articles

5 trends from defense technology companies’ Q3 earnings calls

Jan. 4, 2021

CHART OF THE DAY: December is anticipated to be the biggest on record for IPOs

Dec. 10, 2020

CHART OF THE DAY: Dealmaking in the cybersecurity sector continues its strong year

Nov. 25, 2020

RSMUS.com links

The Real Economy

Middle Market Business Index

MMBI Special Reports

Footer

  • Facebook
  • Instagram
  • RSS

About The Real Economy Blog

The Real Economy Blog from RSM US LLP was developed to provide timely economic insights about the middle market economy. It is offered as a complement to RSM’s macroeconomic thought leadership, including The Real Economy monthly publication and the proprietary RSM US Middle Market Business Index (MMBI).

© 2021 RSMUS.com | Privacy Policy | Cookie Policy

The Real Economy Blog
  • Economics
  • Technology
  • Consumer
  • Industrials
  • Finance
  • Real Estate
  • Health Care
  • Life Sciences