Editor's Note: Data, data, data! Data in edtech can be ubiquitous, useful, and…overwhelming. But don’t worry! We're trying to make sense of data too, and we’ve made it our mission to help you understand it a bit better. One of our many 2015 resolutions: bringing you a “Graph of the Week,” examining how data can be used to help inform decisions.
This week we bring you not just one graph, but two! Double the fun!
How does edtech VC funding compare to VC funding in the tech industry as a whole? At first glance, they appear to be pretty similar. The first graph shows that, for example, 57% of the total number of all VC deals were seed rounds; for edtech, 54% of the total number were seed investments.
When we look at the percentage of dollars raised, however, we see a different story (see second graph below). In edtech, Series B rounds take 36% of total dollars, compared to just 21% of tech-wide VC. And late stage funding takes up less of the total in edtech than in the industry as a whole; Series D and Series E deals combined in edtech received just 11% of the total funding dollars, compared to 31% in the entire tech industry.
What does this difference between edtech and non-edtech VC mean? According to this data, there is a dearth of capital available to be risked on later stage edtech companies. But is there no capital because there are so few sustainable, later stage edtech companies? Or are there few sustainable, later stage edtech companies because there is no capital?
Perhaps more importantly, will this situation change in the future? This week the CEO of a new, for-profit fund from New Schools Venture Fund told EdSurge that the fund will hopefully "participate in follow-on rounds for more of our seed stage companies going forward." It is just one data point, but let's hope it's a sign of more late-stage investment to come.
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