Edtech, a Booming Industry: What You Need to Know About Investing

Edtech, a Booming Industry: What You Need to Know About Investing

The combination of Eduaction and technology, ed-tech is booming in the past few years. This sector covers a wide range of businesses that use technology to improve education, making it “faster, better and cheaper”. 

Years of record venture funding and strong public market activity with several high-profile EdTech IPOs such as Coursera, Duolingo, Instructure, and Udemy have significantly expanded investment opportunities in the sector. 

The Edtech industry is growing rapidly. In 2021, the global Edtech market was worth over $250 billion. By 2027, it is expected to reach to over $600 billion—about a 15.5% increase. 

There are a lot of factors driving this growth. One is the increasing availability of internet access and mobile devices worldwide. This has made it possible for more people to take advantage of online learning opportunities. 


Another factor is the increasing cost of education. More and more people are looking for ways to learn that are more affordable than traditional methods like going to college. Edtech companies offer a lot of value for the price, making them a popular choice for students and adults alike. 

From top-down (macroeconomics) perspective  – the sector is not immune to recent top-down headwinds like rising inflation and rates. Ed-tech space though, holds characteristics of secular growth given market share gains from traditional channels, which suffer from quality and cost barriers and often lack the dynamic, innovative tools, needed to equip and prepare students for their future careers.

From online courses to tools for teachers - there are a lot of different companies operating in this space. Some of the most well-known names include Coursera, Udemy, Chegg, Bright Horizons Family Solutions (BFAM), and one that helps teachers teach - (Zoom). These companies offer online courses and other learning resources as online tutoring and homework help. These are companies that provide educational resources and services such as online tutoring, and homework help. Many different types of businesses and companies make up the Edtech industry. Therefore, selecting the right company to invest in is challenging. 

Disclaimer: Deshe Analytics analysis is AI-driven and 100% objective – recommendation expresses rationale and scoring of the algorithm 

This is where Deshe Analytics comes in. Once you feel comfortable with the ed-tech space in terms of general information and company names - search the companies comprising your ed-tech universe and within seconds the AI technology will score the companies in terms of preference, provide a recommendation, and most importantly -  provide a fundamental analysis stock analysis report, written in any language.

Example:

report one

It helps the investor turn interest in a specific sector into actual investment actions – selecting the best names in term of return potential. 

The platform is easy to use and it gives you all the information you need to make informed investment decisions.

In the ed-tech space though, all the names reviewed came as Hold and Underperform. This can be explained by the bias of the sector to growth stocks, which currently are out of favor from a top-down perspective. 

If this is the case, you may want to look at the general industry (Diversified Consumer Services) and see if there are other good options for you, from different sub-industries. Unfortunately, in this case, EdTech is not at its prime nowadays. Anyway, this tool helps me to consider our investment ideas and find other ideas in case of hold or underperformed. Or otherwise, we should wait for future data.

report 2

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