SaaS company have suffered particularly badly in the stock market in recent months, and that includes edtech. After demand for online education gained unprecedented momentum during the pandemic, many of these businesses faltered.
According to an analysis by partner Bessemer Ventures Janelle Teng, edtech companies in general have lagged other software companies on a number of key metrics, such as projected growth and cash burn efficiency. Teng’s analysis focused on companies listed in EMCLOUD, also known as the BVP Nasdaq Emerging Cloud Index, which tracks the performance of emerging cloud software companies.
Stock market data clearly supports this: When the Covid pandemic ended face-to-face classes, edtech companies took the opportunity to introduce digital learning to students around the world. Edtech company valuations unsurprisingly rose along with many other software-as-a-service companies, which significantly outperformed the rest of the stock market.
But now schools have reopened after their initial closure, and the adoption of educational technology is not staying the course. Far from revolutionizing teaching, it may have just been a less attractive substitute for on-site learning. In fact, a Brookings report concluded that “…countries reopening schools are returning to the way education was delivered before the pandemic, rather than using the opportunity of the disruption to transform education.”
However, not all edtech companies have been impacted equally by the decline, and alternative data may shed some light on which companies are performing better or worse compared to early 2020. India is home to some of the biggest edtech startups, and one of its biggest companies is planning an IPO, while China action against edtech Late 2021, resulting in catastrophic falls in value for its largest edtech companies.
We have used information collected by Thinknum Alternative Data, our parent company, to highlight the salient trends.
Indian Edtech: Byjus vs. Unacademy
Byju’s and Unacademy are two of India’s largest edtech startups and both have considered going public later this year. But while Byju’s founder, Byju Raveendran, is so confident in his business that he a $400 million loan To invest in his own company last month, Unacademy 1,000 employees laid off in the last few months.
According to web traffic data collected by Thinknum, both edtech companies saw significant web traffic during the pandemic, but traffic to Byju’s has increased since early 2020, while Unacademy’s share has fallen, another sign of the company’s troubles .
While some metrics are falling in Byju’s favour, there are rumors of potential troubles for the company. In India, Byju’s was plagued by complaints from parents about misleading and high-pressure sales tactics. As the stock market tumbles, the company’s hopes for a $48 billion SPAC deal look more in doubt.
Corporate learning shows significant employment growth
Edtech isn’t just about K-12 and undergraduate learning — human resources development companies have seen rapid growth over the past decade. Companies like Pluralsight, Skillsoft, and Udemy offer a range of instructional video courses for developers, business professionals, and various other roles.
Compared to edtech companies, which primarily focus on K-12 and undergraduate students, corporate learning companies are showing significantly greater growth in job openings, indicating that the category is thriving despite the recent struggles of the Edtech sector continues to grow.
Coursera and Udemy have the best web traffic in 2022
While several of the edtech companies that Thinknum is tracking experienced a spike in traffic with the onset of the pandemic in 2020, Pluralsight’s web traffic share has since declined, while Coursera and Udemy have largely maintained their web traffic gains.