EdTech startups are booming in Europe

The venture capital market has seen some surprises in recent months as the valuations of many exciting businesses took a downturn. Despite this, the EdTech space appears to be booming in Europe.

Brighteye Ventures, which specializes in EdTech investment, worked with Dealroom and sourced data from Crunchr, Pitchbook, and Tracxn, to find out how the market is changing.

The study found that the average round of funding for an EdTech startup has increased in the first half of 2022, growing from an average of $8.4 million in H1 of 2021 to $13.1 million.

In terms of money invested in total, European EdTech financial backing is 40% higher than at the equivalent point in 2021, it is now $1.4 billion in 2022, compared to $1.0 billion in the same time frame last year.

As a result of these increasing investments, Europe’s startups have made up a greater deal of the funding received by EdTechs year on year. European EdTechs managed to gain 22% of all industry investment in 2022.

The UK is currently leading in attracting investment, but it is followed by France and Germany. Interestingly, in 2022 Austria has jumped up in its EdTech investments and is currently the second most invested country in the EU.

Will this spending continue?

Speaking about why capital is being invested in workplace tools, Zoe Chambers, partner at venture firm Frontline Ventures told UNLEASH: “We’ve noticed a real focus on the employee as a human, not just as a resource.

“Technology companies are really thinking about making employees’ lives easier, and the sell to the corporate level is achieved by demonstrating this.

“Employers must look at things like benefits and the way they’ve changed. They must look at what’s available and make sure they don’t prioritize people in countries with easier access to certain benefits than others. That being said, this can certainly be hard to manage at scale.”

Naturally, education and upskilling can be a sizable benefit to staff who want to develop. With that in mind, EdTech may be seen as a smart avenue to explore for both businesses and investors.

However, the growth that has been seen in the first six months of 2022 is not guaranteed to continue.

With fears of a recession looming, investment firms and businesses may slow down their spending, ultimately leaving startups in peril.

Time will tell whether EdTech startups in Europe can continue to thrive, but they have made a fantastic start to 2022.

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