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Global Spending on Virtual Reality, AI in Education Poised to Skyrocket, Report Says

global spending on virtual reality ai in education poised to skyrocket report says

Global spending on artificial and virtual reality in education is expected to soar from $1.8 billion to $12.6 billion annually over the next four years, a new analysis projects.

Spending on artificial intelligence in education, meanwhile, will jump from $800 million to $6.1 billion yearly over that same period, according to the report released recently by HolonIQ, a global research and intelligence firm.

The report made several projections for global ed-tech expenditures in K-12, higher education, and corporate training through 2025. Those include forecasts of total education spending, upskilling, spending on digital technologies as a proportion of total education spending, and venture capital investment.

“AR/VR is coming down the stack from workforce into higher ed, and is slowly making its way into K-12,” Patrick Brothers, the co-CEO and co-founder of HolonIQ, said in an interview.

Augmented and virtual reality has seen only modest uptake yet in K-12 because there’s a big learning curve for students and teachers to become familiar with the technologies, and because their use will take some time to catch on, he said.

Other areas of advanced technology figure to see significant growth in expenditures through 2025, include robotics and blockchain, according to the report. It projects that the total spent on robotics will rise from $1.3 billion in 2018 to $3.1 billion in 2025, and that the total spent on blockchain will rise from $100 million in 2018 to $600 million in 2025.

HolonIQ
HolonIQ

The biggest driver for the use of blockchain in education is a desire for secure and scalable credentialing, while the biggest spark behind the use of robotics in education is schools looking for different ways to engage learners in STEM fields, Brothers said.

HolonIQ forecasts overall global spending on ed-tech to rise from $227 billion in 2020 to $404 billion in 2025.

Currently, spending on digital technologies makes up just 3.6 percent of total expenditures in the areas of K-12, higher ed, and corporate training. In 2025, that percentage is expected to rise to a higher but still small level of 5.2 percent of overall spending.

“While the longer term impact of COVID-19 on education models is yet to play out, over the next few years we expect an upswing of spending on digital infrastructure in education and greater spending over the long term in new digital models,” the report states.

HolonIQ defines spending in the report as governments, companies, and consumers devoting money to a learning product or service. That distinguishes it from education investments, which are characterized by the supplying of capital in exchange for a stake in a company, Brothers said.

The report also notes that global ed-tech venture capital funding has risen from its previous record of $8.2 billion in 2018 to $16.1 billion in 2020, with Chinese companies occupying the largest share of funding compared with other countries.

Investment in educationwill continue to grow, but is not evenly spread across the globe and weighted heavily towards late-stage mega-rounds,” the report says.

Chinese ed-tech companies saw $26.8 billion in venture capital investment between 2010 and 2020, while U.S. companies saw $13 billion invested in the same period.

Overall, HolonIQ projects that total global education spending will rise from an estimated total of $5.4 trillion in 2020 to a total of $7.3 trillion in 2025, noting that education composes over 6 percent of global GDP.

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Zoom’s Big Stamp on the K-12 Market Is Poised to Grow

zooms big stamp on the k 12 market is poised to grow
MB Analysts View Nov 18

The communication platform has become an essential component for school districts trying to bring remote learning to students and families.

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Investment Is Flooding India’s Ed-Tech Landscape, With Global Implications

investment is flooding indias ed tech landscape with global implications
MB India 02

India’s ed-tech sector is rapidly accelerating, riding a wave of momentum driven by increased investments and acquisitions, while its constellation of home-grown startups are adding new users to their platforms by the millions. 

So far in 2020, funding is smashing previous levels for India-based education startups, outpacing even investments made in U.S. ed-tech companies…

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Europe’s Largest Ed-Tech VC Firm Launches Second Fund With $54 Million

europes largest ed tech vc firm launches second fund with 54 million
MarketTrends VC 1

Europe’s largest ed-tech venture capital firm has started its second fund.

Brighteye Ventures anticipates investing in 15-20 companies over the next three years at the seed and Series A stages, and writing checks of up to $5 million.

The Luxembourg-based firm’s recent $54 million fundraise for its second fund brings the firm’s total assets under management to $112 million, and it anticipates raising a total of $88 million by the spring for Fund II, the Brighteye Ventures said in a statement.

Brighteye Ventures anticipates receiving funds from a mix of family offices and strategic and institutional investors.

Like its first fund, which committed roughly $60 million in total capital, Brighteye Ventures is expected to spend about half of its second fund on direct-to-consumer products, one-quarter on corporate learning tools, and one-quarter on software that enables existing educational institutions to be “better, faster and cheaper,” Benoit Wirz, a partner at Brighteye, said in an interview.

One possible exception in that calculus is that Brighteye could look to invest a bit more in software for schools and universities, as the pandemic has increased digital penetration within the education market.

“The companies that have done the best [during COVID-19] are full-stack, purely online educational offerings that respond to people’s needs to train, or particularly related to professional skills,” he said. Yet “across the board, I think online educational experiences are doing well.”

Two of the 18 total companies financed by Brighteye’s first fund were based in the U.S., Wirz noted, adding that he expects Brighteye will invest in about one to four U.S.-based companies out of the second fund.

About 80 percent of the firm’s investment targets are based in Europe.

In terms of the types of U.S. companies that Brighteye will look to target through its second fund, the firm is considering software that allows for large-scale delivery of online education, ranging from administrative tools to tutoring platforms to online assessment proctoring, Wirz said.

Wirz also sees enormous potential in efforts to apply artificial intelligence to learning.

“The use of AI for content creation is something that we’re really interested in,” Wirz said. “There’s a number of companies that are doing that quite well.”

Brighteye is also scouting potential uses of AI for narrow professional development applications, Wirz said. He pointed to the firm’s completed investment in Silicon Valley-based TeachFX, which provides a coaching application to improve the quality of dialogue between teachers and students

The firm has invested only about 50 percent to 60 percent of the money committed to its first fund, but the remainder of capital available in that account is reserved for follow-on investments in existing portfolio companies, according to Wirz.

The firm has committed or invested about 5 percent to 10 percent of the $54 million currently in its second fund, he said.

“While Brighteye Ventures has long advocated for greater adoption of tech-enabled learning solutions, we scarcely imagined the size of the move that closing 90% of global schools would provoke in Europe, the U.S. and beyond,” said Alex Spiro Latsis, managing partner at Brighteye Advisors, the sole advisory firm to the fund, in a statement.

Latsis continued, “Post-crisis we expect broader awareness of tech enabled learning tools to continue to drive increased adoption as consumers and businesses look to enhance skills through the coming recession and recovery.”

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A Venture Capitalist’s View of the Ed-Tech Market During COVID, and Beyond

a venture capitalists view of the ed tech market during covid and beyond
MB Analysts View Oct 1

Amit Patel, a managing director at Owl Ventures, talks about how his venture capital firm makes investment decisions, and the forces he sees in play in the market during COVID-19.

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