CB Insights: "There Is No EdTech Bubble"

Market Trends

CB Insights: "There Is No EdTech Bubble"

Jan 23, 2013

THE "B" WORD, (AGAIN): Education Week is the latest to hop in the bubbly bathtub, echoing concerns raised by Frank Catalano back in October that investment money may be flooding to ideas that have neither educational value nor viable business models. However, investment tracker CB Insights begs to differ. "There Is No Ed Tech Bubble," it solemnly states. Of the estimated $1.1 billion of financing in 2012 from VCs, angels, corporation and private equity investors, 70% went to seed/angel and Series A deals, which it apparently sees as "pocket change in the grand scheme of things." And the possibility that edtech startups won't be able to follow through with later rounds "is a sign of a market that is actually working."

Sure, what's a couple million for investors? And entrepreneurs will probably lick their chops and go about on their next venture. But when schools have committed to a product that's gone belly up, a whole lot of money, time and resources are wasted--and most especially, the time of both teachers and students.

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