According to Collins vocabulary - the word of 2020 is “lockdown” and it’s no surprise as restrictions connected to the pandemic are applied throughout the planet. It would not be an overstatement to say that these restrictions changed people's lives drastically, being a source of stress and anxiety for billions of people.
All the industries had to adjust and digitalize and the educational sphere is not an exception. It would be logical to assume that eLearning would be one of the booming industries among startups in 2021 as the pandemic influenced classroom learning drastically.
But is it? We did some research and came to unexpected conclusions (spoiler - eLearning is not even in the top 3 domains).
Place of eLearning in startup arena in 2021
We’ve analyzed 503 startups in Europe and the USA that have open positions of software engineers as the main indication of an active development phase and here is what we learned. According to the research, only 4.4 % of the market belongs to the eLearning domain, which is 22 startups out of 503 analyzed. You can check the results of our study here.
Corporate Educational
If we go deeper into the eLearning sector we’ll see that the academic and educational sectors of eLearning feel quite good (although we’ll go back to these sectors further), while the corporate one is facing some challenges due to the general decline in the economic growth of businesses.
Industries severely influenced by the lockdown are struggling to survive in the first place, and consequently, implement a significant budget cut for new hires and corporate training. Businesses are spending only on bare essentials, which impacts the training budget.
This cut has resulted in revenue loss for the companies working in the corporate sector of eLearning. According to 2020 surveys, eLearning service providers reported a huge decline in business from their constant corporate clients forced to cut the training budget due to lockdown restrictions.
Academic Education:
Due to the general restrictions and social distancing requirements classroom learning had to be quickly digitalised. There are quite a few eLearning solutions available for the academic sector like LMS (Learning Management System) and remote communication tools like Zoom, google meet or ancient but still widely used Skype.
Among professional EdTech platforms and LMS there are off-the-shelf options like Docebo, Looop, TalentLMS, Moodle, etc., and customized LMS that need to be adjusted to each client such as Caribu, MarcoPolo Learning, etc.
So here’s our ideas of why EdTech is not booming in 2021:
Tight budget.
Businesses had to cut spendings on not essential expenses, and eLearning amidst pandemic can hardly qualify as essential by many criteria. Like it often happens, in the time of economic turbulence, it is education, science and left high and dry.
Not a necessity.
Many academic as well as corporate institutions can ensure learning processes in remote mode without fancy eLearning platforms and apps using available communication tools. For those who need more sophisticated solutions there are available ready-made or customized options.
Scarcity of development talent
EdTech software is usually quite complex and requires both expertise and serious investments to create new reliable and scalable solutions. With worldwide scarcity of engineering resources, developing advanced applications may be very challenging.
At Radency we often work with EdTech clients who struggle to find experienced engineers locally. We’ve noticed that the demand for new LMS has been steadily rising and this domain attracts more and more entrepreneurs. So maybe 2021 is just a starting point for EdTech and in post-pandemic reality it will become more essential and we’ll witness it’s boom?