Global edtech deals and funding up 30% in Q2
Education technology funding was up 30% to $564m in Q2 2016, with 112 deals worth $564m; Age of Learning posted the largest deal with a $150m private equity funding round by Iconiq Capital. Despite the tick up, the full number of deals for the year is expected to be around 450 worth around $3.3bn, below 2015's bumper year of over 500 deals, a three-year high.

Ed tech activity increased for the second-consecutive quarter in Q2'16, but the year is still unlikely to match 2015 deal levels.

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Financing to ed tech companies peaked in 2015, with over 500 deals worth nearly $3.3B in aggregate. Interest has lagged this year, and if deals continue at their current rate ed tech will see fewer than 450 deals in full-year 2016, putting the industry below 2014 deal levels.

However, on a quarter-on-quarter basis, deals and funding crept up in the most recent quarter. Q2’16 ed tech deals increased slightly from the previous quarter, and funding jumped 30% to $564M.

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Annual deals and dollars

Ed tech startups have attracted 222 funding deals so far this year, worth $999M in total. Deals and funding to the sector grew for three consecutive years to a peak in 2015, but as previously mentioned this year will fall below 2014 levels.

Quarterly deals and dollars

Ed tech saw 112 deals worth $564M in Q2’16, marking the second quarter of quarterly deal count growth. However, deals still remain below their peak of 147 in Q1’15.

The largest deal in Q2’16 was a $150M private equity round by Iconiq Capital to Age of Learning, the California-based provider of early childhood-learning software called ABCmouse.com. This was followed by a $60M Series D to Udemy, led by Naspers, and a $40M corporate minority round to Beijing-based mobile learning platform Yuanfudao by Tencent.

Funding dollars peaked in Q4’15 based on four mega-rounds; a $230M corporate minority to HotChalk, by Bertelsmann, TutorGroup’s $200M Series C, HuJiang’s $157M Series D, and Udacity’s $105M Series D.

Most well-funded VC-backed ed tech companies

Shanghai-based English-learning platform TutorGroup is the most well-funded VC-backed ed tech startup, having raised $315M in disclosed funding. California-based HotChalk, which develops online education platforms for schools and provides online content, ranks second, and professional learning platform Pluralsight ranks third.

Ed Tech Most Well-Funded VC-Backed Companies Rank Company Disclosed Funding ($M) Select Investors 1 TutorGroup $315M Alibaba Group, Qiming Venture Partners, Goldman Sachs 2 HotChalk $249M Bertelsmann, McGraw-Hill Ventures, Mohr Davidow Ventures 3 Pluralsight $208M Insight Venture Partners, Rethink Education, Felicis Ventures 4 Udemy $173M MHS Capital, Insight Venture Partners, 500 Startups, Norwest Venture Partners 5 Desire2Learn $165M NEA, OMERS Ventures 6 Udacity $161M CRV, Google Ventures, Andreessen Horowitz 7 Knewton $157M First Round Capital, Accel Partners, Bessemer Venture Partners, FirstMark Capital 8 Coursera $146M Kleiner Perkins Caufield & Byers, NEA, Learn Capital 9 AltSchool $136M First Round Capital, Andreessen Horowitz, Harrison Metal 10 17Zuoye $135M Shunwei Capital Partners, Tiger Management Corp

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