At the moment, it looks like African edtech startups are scaling on their own. The sector appears totally unattractive to VCs, and very little has been heard about it.
The World Bank expects that by 2100, Africa will have the largest share of the global workforce, with 22 million Africans joining the workforce each year. This population needs the digital disruptive power that Edtech provides to enable the digital economy to gain momentum.
The pandemic served as a launchpad for a massive market opportunity for Edtechs to seize and close the gap by offering programs that accelerate learning. Given the potential of Edtechs, venture capitalist firms have been eager to capitalize on this profitable industry, which experts from the Jacob’s Foundation predict will be worth more than $10 billion by 2026.
Additionally, 141 edtech startups in Africa have received investments totaling more than $935.7 million. Importantly, the majority of these investments happened in 2021.
While it would be assumed that Africa’s edtech funding problems are only now beginning, various pieces of evidence show that the industry has experienced a decline in funding since 2022.
According to data, edtech firms in Africa raised $24.6 million in 2022, or 0.7% of the continent’s overall financing. It marked a 69.6% drop from the peak reached in 2021.
Crunchbase data reveals that venture capital spending in the edtech sector globally decreased by more than 60% from the same period in 2022 through the first seven months of this year. Meanwhile, the frequency of sizable, later-stage edtech fundraising rounds has plummeted.
Education has been struck more severely than most other sectors, despite a decline in venture capital funding across the board. Africa’s Edtech sector has renewed optimism for improved digital learning systems in 2023. This hasn’t happened, though.
Crunchbase reported that 2023 has not yet seen a single funding round of $100 million+, whereas there were more than 60 such investments globally over 2021 and 2022. In Africa, the situation is damning. African edtech startups seem to be flying solo right now.
