European edtech report 2022: Fewer rounds, less deals, but more angel activity

the darkest period During the days of the pandemic, money wasn’t an issue in many developed markets.

Governments, public sector organizations, and many private companies have gone to great lengths to ensure public safety and an adequate supply of core services. Clearly, spending has reached unsustainable levels.

But 2022 will be the year that this “spend” slows down, instead being rebranded more broadly and accepted as actually being “borrowed.” This realization justified the onset of significant cuts in public spending compared to before and during the pandemic.

These cuts have always taken longer to implement than they would have wished, but inflation has run rampant across Europe, in part due to supply chain problems related to the situation in Ukraine. Not only are public services cut, but wages not rising in line with inflation are leading to a cost of living crisis in many markets.

These terms do not help earn the trust of investors and founders. In times of economic crisis, Edtech and education, which are usually one of the more resilient sectors, were not affected by the recession.

It is against this background that we have produced our annual review. European edtech activities in 2022For the first time since 2014, venture capital funding for European edtech startups fell year-on-year, with startups raising $1.8 billion in 2022.

The global ecosystem is on an upward trajectory, albeit inconsistently, and the decline in new investment in 2022 was sharp. Global funding has fallen from his $20.1 billion in 2021 to his $9.1 billion last year. This is in line with public market macro trends.Like other tech sectors (both trends were highlighted in our article Dealroom October Report).

Italy was the only European market to see an increase in both funding and deal numbers.

Given that 2021 was a booming year, the decline in funding is being felt more acutely. The optimism that the pandemic is over and the world is reopening has spread to ambitious founders and early teams. This momentum continued through his first half of 2022 for European edtech.Indeed, if reported in JulyEuropean edtech funding increased by 40% in the first six months of last year compared to the previous year.

However, as we now know, that momentum has waned in the second half of 2022. Optimism has receded, with European edtech startups only raising about $400 million in the last six months.

That said, the sector proved more resilient in Europe than in other major regions. It’s worth pointing out that the region saw more edtech deals in the second half of 2022 than in the first half, but they were simply smaller, more early-stage rounds at lower valuations.

Europe fared better than the rest of the world, but Edtech VC funding fell only 28% in Europe, 64% in the United States, 46% in India, and 46% in the rest of the world. In the country it decreased by 32%. world.

Funding declines least in Europe and RoW, again largest in China

Funding declined across markets, with a slight decline in Europe.

Funding declined across markets, with a slight decline in Europe. Image credit: brighteye ventures

In Europe, the UK continues to lead in funding and trading activity. Her Edtech firm in the UK secured the most funding. In 81 deals, he earned $583 million, beating his next market, Germany, by more than $200 million.

France slides off the podium as fundraising and trading activity plunge from the previous year

Edtech funding in Europe by market. Image credit: Brighteye Ventures

Edtech funding in Europe by market. Image credit: brighteye ventures

Italy is one of the few European markets to see an increase in funding and transaction numbers. Italy’s technology ecosystem has been growing gradually as momentum has been building relatively consistently since 2010. It is also expected that the secured capital will be spread across various sectors, with fintech, healthtech and real estate companies raising the largest rounds.

As for edtech, the market is on a steep upward trend after 2020. Italy’s edtech had a record year in 2019, largely driven by a large round raised by Talent Garden, which could drive an upward trend in 2022. is very promising. In a small early-stage round of less than $15 million.

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