Why Is China the World’s Leader in Edtech?
Whether you choose to look at size or money, China comes out tops every time in terms of edtech. In 2018, Chinese startups received over 50% of all the capital invested by venture capitalists in edtech worldwide. Chinese edtech companies received more money than the total amount invested in edtech firms from all other countries combined, according to a study by HolonIQ.
Education is a $6 trillion industry and is expected to grow to $8 trillion by 2015, according to HolonIQ. However, education is receiving a relatively small portion of global investments when one looks at all sectors. Global investment in all sectors is worth $90 trillion while the education sector is worth only $150 billion.
China, the largest education market in the world
Venture capitalists are warming up to global education and investments are up from $2 billion in 2014 to $8 billion in 2018, but the investment is not evenly spread across the globe. China is a key driver of global investment in education, having captured 50% of all global VC investment in 2018. In comparison, the USA received 20%, India, 10% and Europe 8%.
In 2015 there were 10 listed education companies with a market value of more than $1 billion. The authors of this report predict that there will be more than 100 by 2025. Asia has become the fastest growing edtech market in the world.
Beijing, the edtech capital of the world
According to a study by Navita Ventures, the education venturing arm of global education provider Navitas, Beijing has the highest concentration of edtech companies per capita globally – an astounding 120 edtech companies per million people. New York has 117, the Bay Area 91, and Bangalore 77.
Unicorns soar in China
Unicorns, companies that are worth $1 billion, are supposed to be a rare species. Not in China. The country saw the birth of no less than 97 unicorns in 2018. That’s one every couple of days! In fact, according to a list compiled by HolonIQ, six of the world’s ten largest edtech unicorns were founded in China.
There are a number of factors pointing to China remaining the world’s leader in edtech.
1. Family values
Education is extremely important to Chinese families. Some families spend up to half of their income on the education of their children. Many families go short so that children can study abroad at elite tertiary institutions.
2. Sheer numbers
China as a huge population. And now that the government has ended the one-child policy, more children will likely enter the education system.
3. Government investment
The Chinese government has in recent years invested and still continues to invest vast sums in education, increasing the proportion of its GDP spent on education every year. Premier Li Keqiang has vowed to modernize China’s education by 2030 and the government is providing the funds and support to make that happen.
China is the world’s undisputed edtech leader in terms of size and funding and it looks like the Asian country will retain that status for the foreseeable future.