- Online learning platforms such as Skillshare and Altversity are trying to grab market share as stay-at-home orders lift demand for their programs.
- Investments in e-learning companies are rising while much of the global economy sputters.
- Edtech had been expanding amid labor market shifts and an increased need for workers to learn new skills. Mass unemployment brought on by the crisis is creating fresh demand.
As the pandemic causes millions of job losses and the world topples into recession, companies that keep people connected with schools, work and doctors during stay-at-home orders are among the few economic bright spots.
Online learning platforms are not only seizing the opportunity to expand during the era of home confinement; they are seeking to make those gains permanent for after the pandemic subsides.
Edtech is among the few sectors with growing investor interest in this bear market. The Chinese online educational platform Yuanfudao raised $1 billion in March — when private equity and venture capital were drying up. New York-based Skillshare, which focuses on the creative industry, has seen inbound interest from investors looking for opportunities amid the crisis.
“The VCs know this is a space that is doing well in a very difficult environment,” Skillshare CEO Matt Cooper told Karma.
Demand for its online courses has tripled since mid-March. Enterprises have contracted Skillshare to provide its offerings as a wellness benefit to employees — a growth area Cooper expects to last even as businesses reopen.
Laid-off and furloughed employees are also driving interest in online courses to get an edge in a restricted job market, as are students now unable to attend classes in person. Edtech companies hope to seize the moment and convince students and institutions to embrace the medium.
“E-learning has proved that it serves a real and core need in any modern school system,” Jared Stein, vice president of higher education at Instructure told Karma. Not only does the technology offer ways to customize and personalize learning, but it can also cut instruction costs and help increase scale. Instructure owns Canvas, a top platform for higher education courses that saw an 85% increase in users logged in at the same time in March compared to a year prior.
A rep for Coursera, which partners with colleges and universities to offer a broad range of courses with accreditation for some, told Karma that the platform’s public health classes have been the most popular in the last month, with enrollments up more than 20-fold from the same time last year. Overall enrollment is up more than six-fold globally, with blockchain and personal development also driving interest.
“I think the future of work, and learning, has changed for the good.”
Edtech was already seeing strong investment interest before COVID-19. Coursera raised $103 million last year in Series E funding for a valuation of over $1 billion. That was one of over 900 edtech deals completed last year for a total of over $10 billion, according to PitchBook.
Prior to the crisis, the global e-learning service market was projected to grow at a compounded annual growth rate of 15.6% through 2025, reaching a total market size of $138 billion, according to Research and Markets. That growth was being propelled by shifts in how rapidly the skills required for most jobs are evolving, with the average skill becoming outdated within five years, according to a World Economic Forum report.
Still, edtech investment was down last year from a 2018 high, when over $20 billion in capital was raised in over 1,000 deals. Shasha Yan, who founded the early-stage startup Altversity two years ago, attributes the dip in capital to lack of innovation in the space, noting that many online courses have traditionally had low completion rates.
But unprecedented demand for these services is bringing new growth, she told Karma. Her New York City-based startup was gearing up to launch blended learning courses — which mix online and in-person learning — on topics such as data science and programming for two financial clients when the crisis forced a pivot. Now, the team is focused on making the online-only substitute as engaging as possible with features such as live videoconferencing and interactive webinars.
“We are not going to go back to the normal prior to the pandemic,” she said. “I think the future of work, and learning, has changed for the good.”