Dive Brief:
- Education technology startups have been flush with cash in recent years, thanks to enthusiastic investors ready to “disrupt” higher education, but 2016 has brought a slowdown to the sector that is sure to impact colleges and universities.
- The Chronicle of Higher Education reports higher ed leaders can expect fewer free or low-cost trials, as well as pitches from companies offering new, innovative products or services — though career services and learning analytics arenas are still growing.
- The startups that survive in a shrinking market with disruptive business models may present greater threats to traditional higher education because they will prove their strength, like Udacity, which is now valued at more than $1 billion.
Dive Insight:
Worldwide investment in educational technology broke records in 2015, surpassing the 2014 haul by mid-year. But much of the spending was abroad — China, India and Brazil represented major investment or growth areas. And investments in companies serving the higher education sector was small and shrinking, compared to prior years.
Nevertheless, EdSurge reports the funding change from the last quarter of 2015 to the first quarter of 2016 was the largest of any since it started tracking in 2010. But with such a short-term trendline, experts caution against drawing immediate doom and gloom conclusions.