During the dark In the days of the pandemic, money was virtually nothing in many developed markets.
Governments, public sector organizations and many private companies have moved heaven and earth to ensure public safety and adequate service delivery. Clearly, the cost has reached an unsustainable level.
But in the year 2022 was the year in which this “spending” was reduced and instead was widely adopted under a new name and actually accepted as “borrowing”. This realization has led to deep cuts in public spending compared to before and during the pandemic.
Although these cuts have always been slower to implement than communicated, inflation has been seen in Europe and beyond, partly due to supply chain issues related to the situation in Ukraine. Wage increases have not kept pace with inflation and public service cuts have driven up the cost of living in many markets.
These conditions are not conducive to instilling confidence in investors or founders. Edtech, and education more broadly, one of the most resilient sectors during the economic crisis, has not been immune to setbacks.
It is against this background that we have established our annual review of the European edtech movement for 2022. For the first time since 2014, venture capital funding for European edtech startups has fallen year-on-year, with startups expected to reach $1.8 billion in 2022, compared to $2.5 billion. billion a year ago.
Although the global ecosystem is less consistent, the decline in new investment in 2022 has been severe. Global funding has dropped from $20.1 billion last year to $9.1 billion in 2021. This is consistent with the macro trend in the public markets. as well as other tech sectors (both trends were highlighted in our October report with Dealroom).
Italy was the only European market to see an increase in both funding and number of deals.
In the year As 2021 is a year of growth, the financial downturn is being felt strongly. It spread to founders and early adopters who hoped that the pandemic was coming to an end and that the world was opening up again. This is the pace for European edtech in 2018. It passed in the first half of 2022. In fact, as reported in July, European edtech funding increased by 40% in the first six months of last year compared to a year ago.
But as we now know, that progress has stalled in the second half of 2022. Optimism faded, and European edtech startups raised only about $400 million in the last six months, compared to $1.4 billion in the second half.
Despite this, the sector proved stronger in Europe than in other major regions. It’s worth noting that the region saw more edtech deals in the second half than the first half of 2022, but there were fewer and more early-stage rounds at lower prices.
Europe fared well compared to the rest of the world, though: edtech VC funding fell by just 28% in Europe, compared to a 64% drop in the US, a 46% drop in India and a 32% drop in the rest of the world. the world.
Funding decreased the least in Europe and RW, and decreased the most in China
In Europe, we see the UK occupying the top spot in funding and deal activity. Edtech companies in the UK received the most funding – $583 million in 81 deals, more than $200 million ahead of the next market, Germany, where startups raised $363 million in 34 deals.
Funding and agreement activities have been greatly reduced from previous years, and France has slipped from the stage
Italy was one of the few European markets to see increased funding and deal numbers. In the year Italy’s tech ecosystem has been growing steadily since 2010, with the pace building relatively consistently. It is also promising to see the capital secured spread across sectors, with some of the largest rounds raised by companies in fintech, healthtech and real estate.
As for edtech, the market is trending upwards from 2020 onwards. Although EdTech in Italy Despite a record-breaking year in 2019, largely driven by a large round of Talent Garden launches, it’s promising to see the upward trend continue in 2022. At a minimum, a first-stage round of less than $15 million.