We tell you about the educational projects that have managed to reach a multibillion-dollar valuation.
According to HolonIQ, an analytics agency, there are 24 EdTech unicorns in the world as of June 17, 2021. The combined valuation of these companies has reached the $77 billion mark. We tell you about the ten most successful education startups and what helped them get to the top.
1) ByJu’s: valued at $16.5 billion
ByJu’s is an Indian company that has developed an educational platform of the same name. The app contains educational materials for students enrolled in the twelve-year K-12 program. Also recently ByJu’s launched Early Learn, a service aimed at young children.
Learning material is given in the form of short animated videos. The app also helps prepare for exams.
In 2019, ByJu’s received $785 million from the Mark Zuckerberg Foundation and his wife’s Chan-Zuckerberg Initiative, Sequoia Capital India, Tencent and other major investors. At the same time, the company announced that it would launch an international version of the app for English-speaking students from other countries. ByJu’s growth accelerated in 2021, with $460 million invested in March and $1 billion in April. It is now one of India’s most expensive startups.
2) Yuanfudao: $15.5 billion valuation.
Yuanfudao is China’s largest EdTech service, focusing on online lessons for schoolchildren. The company offers users a diverse program, from classes for kindergarteners and English lessons for elementary grades to courses in core subjects and for exam preparation.
Yuanfudao owns many subsidiary services. They include Xiaoyuan Kousuan, a math test application, Zebra AI, an educational platform for preschoolers, Yuantiku, Yuansouti, an online test bank, and Yuansouti, a question-and-answer service, among others. The result is a closed ecosystem of services that support each other.
Since its founding in 2015, Yuanfudao has grown rapidly, but the coronavirus pandemic has accelerated its growth even further. The increased demand for online learning in China made the company the most expensive EdTech startup in the world in 2020. Last October alone, the platform received $2.2 billion in investments.
3) Zuoyebang: valuation – $10 billion
Education service Zuoyebang was launched by Chinese Internet giant Baidu in 2015 and spun off into a separate company a year later. Using the platform, students can find the right answers to homework assignments that have caused difficulty. Artificial intelligence helps find solutions.
The service also offers classes with an online teacher. Both preschoolers and high school students can take advantage of it.
Zuoyebang claims that approximately 50 million people, a quarter of all schoolchildren in China, use the app daily. In all, up to 170 million users per month access the platform.
Zuoyebang’s popularity grew significantly during the pandemic. In the fall of 2020, the total number of students participating in paid live streaming on the platform exceeded 10 million, an industry record.
At the end of 2020, the company received $1.6 billion in funding. All told, the company has raised more than $2.9 billion in investments since its inception.
According to IT Orange analysts, startups focused on school education in China are in high demand from investors. In the first half of 2020, such companies raised $1.96 billion, or more than 60% of the total amount received by the EdTech sector.
4) Coursera: valuation – $5.17 billion
Coursera is an American online education platform. It was launched in 2012 by Stanford University computer science professors Daphne Koller and Andrew Eun. With its help, you can take courses remotely, learn new skills or master a new profession, get a higher education – a bachelor’s or master’s degree.
The list of specializations is extensive – programming, economics, marketing, business, design, and more. In particular, one university offers to teach medical workers how to treat patients with COVID-19. The company partners with more than 200 universities worldwide.
In the summer of 2020, the company raised $130 million. Then investors valued the platform at $2.5 billion. After the IPO, its valuation may increase. If Coursera sells shares at $30, the capitalization will be $3.98 billion, and if at $33 per paper, $4.38 billion. Renaissance Capital believes that the valuation could reach $5.1 billion. And that is about 17 revenues for 2020 or more than 27 revenues for 2019.
The global higher education market was $2.2 trillion in 2019, according to analytics firm HolonIQ. A similar online market reached $36 billion in the same year and is expected to grow to $74 billion by 2025.
5) VIPKid: valuation – $4.5 billion
VIPKid is an immersive English language learning app aimed at children ages 5 to 12. The service allows Chinese users to communicate with teachers from the U.S. in a video chat format. Lessons are held in individual format and last 25 minutes.
To become a teacher, you must have a bachelor’s degree and an educational license or complete a TESOL program directly on the platform.
Today, VIPKid is one of China’s leading online education startups. The service raised $200 million in seed funding in 2017 and raised another $500 million in a Series D+ round in April 2018.
In February 2020, the VIPKid platform held 1.5 million free English and math lessons for students affected by the COVID-19 pandemic. Wuhan students and children of medical professionals were given priority for charity classes.
6) Udemy: estimate – $3.3 billion
Udemy is an educational service that gives any user an opportunity to try himself as a teacher. The platform practically does not limit the content authors, so now there are more than 155 thousand training courses on a wide variety of topics – from breeding medicinal plants to the construction of a nuclear reactor.
All content is paid for, with courses ranging in price from $25 to $200. Thanks to this, some teachers manage to earn significant amounts: in 2015, the combined income of the top ten authors of Udemy exceeded $ 17 million.
The service is currently used by more than 40 million students from more than 180 countries, with two-thirds of them living outside the United States. In November 2020, Udemy received $50 million from Learn Capital, Tencent and Winter Capital Advisors.
7) ApplyBoard: valuation – $3.2 billion
ApplyBoard is a service for finding overseas educational programs. Institutions can post information for international students on the platform, and students can apply for admission.
To become a student at a foreign university, applicants must tell their story and attach the necessary documents. The service will help them choose an educational institution and give recommendations on how to apply for a visa. All of this is free (in addition to standard application fees paid by each institution). Once the student is enrolled and their visa is approved, the university pays ApplyBoard a percentage of the tuition.
ApplyBoard uses open data to simplify the international education application process. The company has become the world’s largest online platform for international student recruitment, with over 120,000 people from more than 100 countries already using its services. About 1,200 educational institutions in Canada, the United States, Great Britain and Australia cooperate with ApplyBoard.
8) MasterClass: valuation – $2.75 billion
MasterClass is an American educational service that gives students access to tutorials and lectures from experts in various fields. The app is paid, with an annual subscription costing $180 ($15 per month). Lessons last from 5 to 25 minutes and the course lasts from 2 to 5 hours.
Unlike other online courses, the emphasis in MasterClass is on creativity. There are classes on topics such as cooking, performing arts, acting, politics, economics, business, gardening, photography, video game design and more.
The instructors on the platform are well-known personalities. For example, singer Christina Aguilera, producer and performer Timbaland, writer Margaret Atwood, director David Lynch, actress Natalie Portman, Vogue chief Anna Wintour, tennis player Serena Williams, grandmaster Garry Kasparov, actor Samuel L. Jackson, skateboarder Tony Hawk, director Martin Scorsese and many others.
In 2020, the International Academy of Digital Arts and Sciences awarded MasterClass two Webby Awards in the Applications, Mobile and Voice and Internet categories. In May 2021, the platform received $225 million in funding from investment firms such as Fidelity Management & Research, Baillie Gifford, Balyasny Asset Management and Eldridge. The total amount invested in the startup exceeded the $460 million mark.
9) Duolingo: valuation – $2.4 billion
Duolingo is a free game-based language learning app launched in 2011. Users of the platform have to perform various tasks: practice pronunciation, read and translate sentences, compose texts and find matches between images and words. There are also inserts with explanations of grammatical rules.
For each completed task, users get virtual rewards – “lingots”. They can also compete with friends. In total, more than 30 languages are available in the app, including Hebrew, Swahili, Chinese and Klingon.
In 2013, Apple selected Duolingo as its iPhone app of the year, the first time an EdTech service has received such an award. Duolingo was also named the best education startup at the 2013 Crunchies ceremony and the most downloaded app in the education category on Google Play in 2013 and 2014.
Since its inception, Duolingo has raised more than $180 million in investments. Funds that have invested in the company include CapitalG, Kleiner Perkins, and Union Square Ventures.
10) Kajabi: valuation – $2 billion
Kajabi is a service for small businesses to make online courses and training programs using templates and sell them. Content creators use the service to launch personalized websites and themed landing pages. The platform also allows for payment processing, insight into customer dynamics, and automation of targeted marketing campaigns.
Kajabi users get a single ecosystem in which they can publish, sell and distribute online courses, community memberships and other digital products. To date, the company has helped its customers sell more than $2 billion worth of content.
Pricing for Kajabi’s services starts at $129 per month. The free version is only available for a trial period.
In May 2021, Kajabi raised more than $550 million in investments and was valued at $2 billion. Funds such as Tiger Global Management, TPG, Tidemark, Owl Rock Capital and Meritech Capital have invested in the company. Investors have been eager to fund the project as it has reached $1.5 billion in annual sales, up more than 150% in the past 12 months.
11) Unacademy: valuation – $2 billion
Unacademy is an EdTech startup that grew out of an educational YouTube channel of the same name. More than 47,000 teachers are registered on the platform and they conduct more than 150,000 interactive lessons a month.
The service is aimed primarily at students enrolled in the twelve-year K-12 program. Altogether over 1 million video lessons have been uploaded to the platform and are available for free and by subscription. Unacademy also offers courses to prepare for graduation and entrance exams in India.
From 2019 to 2020, Unacademy increased its monthly revenue nearly nine-fold, from $270,000 to $2.46 million. The company also attracted nearly $400 million in investments from Facebook and several large venture capital funds. This allowed it to acquire six EdTech startups at once: PrepLadder, CodeChef, Kreatryx, Coursavy, Mastree and NeoStencil.
Over the past year, Unacademy’s valuation has quadrupled: while in February 2020 the platform was valued at $510 million, by November that figure had already reached $2 billion.
What are the prospects for these projects?
In the future, EdTech startups will be able to count on receiving a portion of the budgets allocated by states for education. We are talking about “colossal funds,” because many countries spend from 5% to 10% of their GDP on education annually.
In addition, the pandemic has accelerated the transition of people online, creating favorable conditions for the growth of educational unicorns.