Good Morning [%first_name |Dear Reader%],

How are you this week? It’s edition #34. Let’s jump right in.

And I know, I know. What in the high hell is “dead-tech”, you’re asking. In case you think I’ve fully turned the corner on my most beloved sector, let me explain. A few months ago, during a discussion with friends, a book idea was proposed. They suggested I pool in all my misgivings about edtechs—potential scams, scary founder stories, the lack of any measurable impact (you know, the usual)—and write a book titled The Annals of, what they jokingly called, “Dead-tech”.

This isn’t years ago, mind you. Only a few months. Now, that funny, flippant conversation has turned into a full blown portent in my mind. The dark clouds of layoffs, slowdowns, and shutdowns seem inescapable. My trusted Google search dipstick, which I do before every edition, has been solemnly blue.

The swift turn in fortunes is spooky, but I’ll refrain from going into supernatural territory. My concerns are more earthly. Everyone’s behaving strangely, as though our good, common friend edtech has been murdered. All we have left are good memories of a golden era. An IPL ad or two. A celebrity endorsement.

Except for two things.

I can’t find a body.

Or a crime.

What has happened, really?

Casting a large shadow

Let’s get a few things out of the way first.

1. The layoffs problem is real, and cruel. But it’s clearly not restricted to edtech. 
2. Global macro trends—the war in Ukraine, increasing interest rates, the reopening of schools–are all temporal wormholes that edtech-like sectors have fallen into.

There are also individual testimonies on Twitter, like the one below from one of the founders of SuperLearn, which bravely list reasons for why a particular edtech idea didn’t work.

Source: @kunalbhatia91/Twitter

The whole thread is quite illuminating, and ends with the hopeful message of “learnings” from version 1.o for Bhatia and gang. It got me thinking about what a “fundable” edtech idea would look like. Is it about finding a niche? If that was the case, then SuperLearn had one. Here’s how Inc42 describes their platform:

Bhatia makes a clear point about the current lack of venture capital and parent interest in edtech. But even so, the thread really isn’t a proclamation of the “dead-tech” era.

It’s definitely a confusing space to be in. No one killed edtech, but there’s some blood spilled. There’s no real crime, but there are surely villains in this plot.

In a crime thriller, this would be the halfway mark. But edtech isn’t nearly as exciting as a real whodunit. So you have me—a pseudo Sherlock Holmes—trying to piece together what changed.

Killing the monster, not Frankenstein

In the frosty first half of 2022, five edtechs have already raised close to US$400 million. PW is a test-prep, K-12 solution; UpGrad is an upskilling platform for adult learners; Leap is an overseas education platform; and the fourth, and smallest, fundraise of US$4 million was done by another test-prep player called Toprankers. Cuemath, a K-12 solution with a special focus on math learning, also raised another US$57 million in early June. (The Byju’s and Eruditus fundraises were announced a bit before the whole thing came crashing down).

This isn’t to say that there isn’t a dip in funding. During the same period last year, edtechs had already raised US$560 million. But what’s changed more drastically than the funding levels is the narrative.

There are founders (and obviously VCs who back them) trying to push back the gloom with feelers, announcing new hires and business lines.

Source: @Bright_Champs/Twitter

This is a narrow approach to building evidence. But stay with me.

I drew up a rough map of edtechs who have received funding in the last few months, and mapped them against two criteria: a) stage; b) marketing spend. I also plotted the villains of the edtech whodunit on the graph. The ones that had to let their people go and/or shut down.

It’s evident that there’s no pattern to this finding. K-12, upskilling, test-prep… funders aren’t choosing sectors yet. Though K-12, admittedly, will have to be bundled with other types of courses. What is clear is that Byju’s and Unacademy far outspent any other edtech when it comes to marketing. 

The other thing that most stood out for me was the stage at which four of the five edtechs have raised funding. Older edtechs and late-stage rounds dominate the chart. PW, again, is an anomaly. 

Edtech’s sales and marketing engines grew to monstrous proportions during the pandemic. But the edtechs that made the monster can be redeemed. Edtechs can either choose to be in the bruising battle of customer acquisition and outspend each other. Or they can be battle-adjacent, either sticking to niches and/or finding guerilla tactics when it comes to marketing and acquisitions. 

As for the whodunit, I think we all know who’s ultimately responsible for spreading “narratives”. Why it’s us, the media, of course!

Though I can think of one more group of people who love the cloak-and-dagger games. Can you guess? 🙂

That’s all for this week folks. Do keep writing to [email protected] with all your tips, suggestions, and comments. Also, what patterns do you think are most visible in edtech funding?

Best,

Olina