E-Learning Companies & the Private Equity Investment Backing Their Growth
- E-learning trends in 2021
- Private equity investment in e-learning companies
- Drawbacks and considerations
Gain exposure to institutional private equity and hedge funds that are investing in e-learning companies and technologies for your clients’ portfolios.
E-learning, also referred to as online learning or electronic learning, is the acquisition of knowledge that takes place through electronic technologies and media. Simply put, e-learning is defined as “learning that is enabled electronically”.
Advances in technology are enabling our society to shift from traditional, in-person educational models to virtual programs. With modern software systems, people can learn anything from Python programming to Japanese and even accounting without ever leaving the comfort of their homes. Logging on to a computer or mobile device allows access to knowledge from world-renowned chefs, professors, and so much more programs developed in collaboration with a multitude of e-learning companies.
Indeed, e-learning companies help make this all a reality. They grant accessibility, affordability, and opportunity to people around the world. People who might have had limited opportunities due to their location now have access. Now, with e-learning, earning an interactive college degree online and learning at your own pace, for a far lower price than a traditional university, is possible.
E-learning is growing as technology increases its reach and reliability, with the e-learning industry projected by some to surpass $243 billion by 2022.
E-learning systems can make it easier to reteach employees at the same time, regardless of where they are located around the world. A location-independent, technology-empowered system can help companies form a lasting web of global learners who can reclaim their lifestyle while balancing career goals. E-learning companies with web-based enterprise learning programs support pivots like these, providing an agile solution to a fast-paced market.
E-learning Trends in 2021
There is little doubt that the pandemic has had a fast-forward effect on the e-learning market since most schools and universities had to shift to online learning, and many people who want to learn new things turn their offline-learning habits to online.
As a result, today’s educational landscape is going through a revolution unlike any seen before. And the e-learning industry growth statistics don’t seem to be slowing down according to industry experts. The largest EdTech and e-learning companies are already valued at over $1 billion and will be the driving force of the entire online education industry.
Private Equity Investment in E-learning Companies
Education is a space that private equity players historically invest in, and now e-learning has created a more robust opportunity set. In response to Covid-19, e-learning startups and companies saw spikes in user growth, and they are now leveraging this momentum to raise additional capital from numerous private equity managers.
E-learning is not a short-term trend, says Jeff Lieberman, a managing director at Insight Partners, a private equity firm that has backed nearly two dozen education companies, one example being Udemy. "Software will reshape learning both in the classroom and out well beyond the pandemic." Udemy is an e-learning company whose platform provides a marketplace offering more than 130,000 different online learning courses from business analytics to meditation lessons.
Duolingo another notable e-learning company, has raised $183.3 million over nine funding rounds. Major investors include Tim Ferriss, General Atlantic, Capital G, Drive Capital, and New Enterprise Associates.
In April of 2021, Summit Partners, with participation from existing investor Conny Boersch, founder of Mountain Partners, invested $68 million in Lingoda, an e-learning company and trusted language school. The new funding will support Lingoda’s expansion in new markets, further enhance the company’s live classroom experiences, and accelerate the company’s already robust growth.
Drawbacks and considerations
While e-learning covers a huge range of degrees, courses, classes, training, and lessons across multiple sectors, there are certain courses and fields that simply cannot be taught online due to the practical components. There is also a lack of student bodies, student communities, and clubs. Students can become lonely and isolated when learning remotely. To meet this challenge, e-learning companies are starting to add video discussions for students, slack communities, and “remote catch-ups”.
Other drawbacks include the fact that modules may not have assessments or even oversight from instructors, and, therefore, students only learn as much from the classes as they choose. While it may be ideal for many students, others might need more direct contact from an instructor.
Despite both employees and students reporting self-paced instruction as one of the key motivators to use e-learning, statistics on the self-paced e-learning market reveal a steep decline of 6.4% or more per year.
However, increased demand and competition in the industry are forcing online learning and e-learning companies to adapt faster and provide a better experience for a larger global audience, which might place a strain on the e-learning industry.
Private equity firms are identifying e-learning investment opportunities that require attention, talent, technology, and immediate investment. With COVID-19 jeopardizing in-school learning, the widespread adoption of EdTech and e-learning software is likely to continue.