With the inflow of an estimated $6 billion of venture capital over the past five years, E-Learning is being driven not only by startup dot-com entrepreneurs but also by big corporations, for-profit spin-off ventures, as well as big and small universities. 2012 saw a boom in E-Learning technology investment. One of the largest ever investments in this sector took place in September that year when Desire2Learn, a developer of an LMS, received $80 million. According to Ambient Insight, since 2012, the investment in educational technology (“edtech”) has taken two different routes: investment in K-12 and pre-K-12 start-ups, and investment in corporate-oriented businesses.
Many universities entered the E-Learning marketplace using non-profit models, leveraging their knowledge of the traditional classroom and applying this to the E-Learning environment. In particular, the MOOC market has grown vigorously. Not only is there a proliferation of courses, there is now an expansion of MOOC platform providers and tools. Today, there are more than 2 billion potential learners around the world. More than 70% of these are, reportedly, unable to afford a college degree. Yet, today, possessing a college degree appears to be more important than ever. McKinsey believes that college-educated workers will have a three-fold advantage in salaries and opportunities by 2020.
According to Josh Bersin, the Founder and Principal at Bersin by Deloitte: “While this is still a young market, the demand is there and we expect it to grow exponentially in the coming years.” This market contains different business models, encompassing a wide spectrum of approaches. For example, there are The Disruptive Businesses (free-open access distribution) and the Education Giants (paid distribution) models. According to Forbes, there are several “disruptive” players in the education market: Cousera, Udacity, Udemy and so on. All these players are running MOOCs initiatives. Some are completely free, while others charge basic fees to students.
edX is a joint venture by MIT and Harvard to offer their courses online to a worldwide audience, for free. The courses are not for credit, but the plan is to eventually award certificates of completion to students. The site launched in the fall of 2012.
edX is a joint venture by MIT and Harvard to offer their courses online to a worldwide audience, for free. The courses are not for credit, but the plan is to eventually award certificates of completion to students. The site launched in the fall of 2012.
Udacity is an online education platform founded by Sebastian Thrun, David Stavens, and Mike Sokolsky. The site currently offers 14 courses focusing on computer science, math, entrepreneurship and more. Over 100,000 students have enrolled on their courses globally.
Coursera is a free online education platform that features over 200 courses from 33 universities worldwide. The site was launched in April 2012 by Andrew Ng and Daphne Koller, who were Stanford University computer science professors.
Knewton is an adaptive learning company that provides personalized web-based instructions on a variety of subjects. It was founded in 2008 by Jose Ferriera.
Udemy is an online learning platform where experts teach courses on a variety of subjects. Some courses are free, while others are fee-based, with prices ranging from $5 to $250.
Khan Academy provides free online education with a wide range of courses. Launched in 2006 by the educator, Salman Khan, the site now contains over 3,400 lectures.
MITx will offer a portfolio of MIT courses for free to a virtual community of learners around the world.
2U is an education-based tech-company that partners with universities to offer online degrees. Apple launched iTunes U in 2007. The app offers free lectures from universities, museums, libraries and other educational institutions. There are currently more than 75,000 files available for download.
Code Academy: A free online site offering lessons on how to code.
Within this wide spectrum, there are a number of local players emerging. According to IBIS Capital, there are over 3000 E-Learning companies in Europe alone. Disruptive businesses, education giants and local players are at the center of mergers and acquisitions, as well as transactions and fundraising.
The Corporate Learning market is also growing and, as such, it is attracting big investments from all over the world. The U.S. is the most active global fundraiser for Education. Europe only accounts for 6% of total fundraising volume.
Investing in the Distribution sector appears to be highly attractive at present, as investment returns from the Management Systems and Content sectors fall behind. However, thanks to the SaaS business model, the LMS Market has been growing fast so far -- and should continue to grow.