The vast majority of North America’s most promising ed-tech companies share a common factor: They were founded pre-pandemic.
That’s one conclusion from a recent report sizing up the landscape of ed-tech startups across the region.
HolonIQ, a global research and intelligence firm based in Australia, recently released its annual North America EdTech 200 list identifying fast-growing and what it considers to be innovative ed-tech companies in the U.S. and Canada.
The research firm evaluated more than 1,000 education companies and spoke with local market experts to come up with the list of 200 North American startups it has deemed among the “most promising” in the region.
HolonIQ also puts out similar lists of ed-tech firms for other regions around the world. As with those other analyses, the North American list contains companies in the K-12 and higher education sectors.
For 2023, more than half of the 200 companies on the list are categorized as specializing in education management systems or in workforce and upskilling.
Another 17 percent of the companies on the list are categorized as “new delivery models,” a term that HolonIQ uses for ed-tech firms using “innovative approaches to learning,” said Meg Hamel, vice president of the research firm’s education sector. And 9 percent of this year’s list are in the “content” category, which is used for companies that produce curriculum and other education resources.
Mature Companies Have an Edge
More than half of the education companies on this year’s list have been around for more than seven years, according to the report.
Only 13 percent were founded post-pandemic.
Mature startups that have established trust in their markets and solid customer bases “have done well this year,” the report said. Hamel, HolonIQ’s vice president of education, said the “maturity level” of the ed-tech companies was among the most interesting characteristics of the companies on this year’s list.
Those organizations that have been around a little longer tend to have more market traction, and can show momentum and how their businesses have grown over years, which helps them score better on HolonIQ’s rubric, she said.
“But the younger companies are starting off very strong,” Hamel said, referencing the 13 percent of companies on the list that were founded after 2020. “They’re coming in with more research than maybe some of the later-stage startups did at first.”
The Holon IQ report also found that the direct-to-consumer business model appears to be on the rise among North American ed-tech firms.
Fifty-three percent of the companies on the 2023 list do some kind of business in the direct-to-consumer market, up from 48 percent a year ago and 39 percent in 2021.
Hamel said it’s a trend her firm is watching.
“We’re seeing more direct-to-consumer with up-skilling, tutoring and with higher education financing solutions,” she said. “If I had to guess, language learning would be the next-hottest category with the success of Duolingo over the last few years.”
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