What we can learn from edtech startups’ expansion efforts in Europe – TechCrunch

It’s a story Common to all sectors today: Investors just want to see “honest” charts on the pitch. However, the growth of education technology in the last 18 months has soared to some extent that companies need to show growth of more than three times their annual recurring revenue in order to be noticed even by their favorable funding.

Some companies, like GoStudent, Ornikar, and YouSchool, can blow this out of the park, but companies that aren’t well suited to the pandemic situation are finding it more difficult to show this kind of growth. increase.

One of the most common themes Bright Eye sees in young businesses is to focus on international expansion for growth. To gain further insight into this trend, we surveyed educational technology companies on expansion plans, priorities, and pitfalls. We received 57 responses and supplemented the interviews with major companies and investors. Forty-nine of the companies surveyed are based in Europe, six in the United States and three in Asia.

Internationalization seems to make the expansion aspect more feasible when more money becomes available, later in the journey, or perhaps for VC rounds. Higher budgets also allow entry into several markets at about the same time.

The survey found that the target customers were almost evenly divided into businesses, institutions and consumers, and that the domestic market was wide enough. The largest delegations were from the United Kingdom and France, with 13 and 9 respondents, respectively, followed by the United States with 7, Norway with 5, and Spain, Finland and Switzerland with 4 respectively. About 40% of these companies have not yet expanded beyond their home countries, and the rest have been internationalized.

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International expansion is an interesting subtle part of the growth path of educational technology companies. Unlike FinTech’s neighbors, educational technology companies are expected to need to expand into many large markets in order to reach an attractive scale for VCs. This is less true than in early 2020, as digital education and work are now so common that it is possible to build a billion dollars in educational technology in a single larger European market.

But not surprisingly, almost all ambitious founders of edtech recognize that they need to expand abroad to grow at a pace that is appealing to investors. They too have good reason to believe it. For example, the complexity of selling to schools and universities is widely documented, so it may seem logical to seize the opportunity to build market share internationally. Therefore, some see expansion as a way to diversify risk. For example, what if you’re growing steadily in market X, but you have a lot of opportunities in Y and your business starts to decline in market X for some reason?

International expansion looks good, but what does that mean? As part of our research analysis, we asked many organizations this question. The answers were very broad, and their breadth reflected to some extent the target customer groups and how they reached those customers. If your product is web-based and accessible from anywhere, it’s relatively easy for a good product user to reach customers in a large number of markets (50+). The company can then build a wider infrastructure with the team around its traction.

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What we can learn from edtech startups’ expansion efforts in Europe – TechCrunch Source link What we can learn from edtech startups’ expansion efforts in Europe – TechCrunch


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