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The EdTech Episode #8

Welcome back to our newsletter.

We periodically highlight China's large and well-funded EdTech sector, but funding conditions have changed dramatically for Chinese startups over the past year. From a peak of US$41B in the second quarter of 2018,
Chinese VC investment fell almost 80% to US$9B in the second quarter of 2019. For startups, this has meant tougher terms from investors (paywall) and a shift in mentality away from "growth at any cost". The EdTech sector has not been immune, with VIPKid reportedly (paywall) struggling to raise a new round.

Perhaps the lesson is that while fundamentals are structural, funding is cyclical and hence, difficult to predict. On the other hand, forces such as attitudes to education,
willingness to spend on the right EdTech product, and rising Internet penetration will likely remain relevant for years to come.

Peter Sahui
Senior Associate, Navitas Ventures

Market News
For the first half of 2019, the Chinese EdTech sector raised US$1.8B in EdTech funding, spread across 184 deals (a decline of almost half from 1H18), according to iyiou data cited by JMDEdu
Company/Institution News
StartEd has announced the USA Edtech Accelerator - a 3-month, fee-based program aimed at international EdTech companies looking to expand into the US market. 

Graduway, an alumni engagement software provider, has raised US$60M from K1 Investment Management.

Benchling, a provider of R&D cloud software for life sciences, has raised a US$34.5M Series C round. Menlo Ventures led.

Brainly, a student Q&A site, has raised US$30M, according to an SEC filing.

NexGenT, an IT skills trainer, has raised US$18.2M, according to an SEC filing.

Riid, the South Korea-based developer of an AI tutoring app, has raised a US$18M Series C roundPremier Partners, Alpenroute Asset Management, DSC Investment, IMM Investment, Korea Growth Investment Corporation and D Ventures Private Investment Fund participated.

WhiteHat, a UK-based apprenticeships provider, has raised a US$16M Series A round. Index Ventures led.

Eloomi, a corporate LMS provider, has raised a DKK 75M Series A round. Kennet Partners led.

SAM Labs, a STEAM education resources provider for K-12, has raised a US$8.9M Series A2 round. Partners in Equity and Inventures Investment Partners participated.

PlayShifu, a developer of educational AR toys, has raised a US$7M round. Chiratae, Inventus Capital, and BIF led.

Glints, a Singapore-based careers and internships portal, has raised a US$6.8M Series B round. Monk's Hill Ventures led.

Maximum Education, a Russian test prep provider, has raised a RUB 390M (US$6.8M) Series B round. Skolkovo Digital led.

Frontline Education, a private equity-backed provider of K-12 school administration software, has agreed to acquire Perennial EdTech from Alpine Investors.
New Funds

No new EdTech funds have been raised since our last newsletter.
Final Thoughts

How easy is it for an EdTech founder to tap into sector best practice? 

My guess would be, "easier than it used to be". Community events, such as ASU-GSV, London EdTech Week, GET, and EdTech Asia, have grown in scale and regional diversity. Accelerators and ecosystem champions have emerged around the world, such as Emerge Education (UK), Injini (South Africa), LearnSpace (France), and EduGrowth (Australia), or are expanding into new programs and geographies (as with New York-based StartEd's new, bi-coastal program).

There is still work to be done -- for example, India and Southeast Asia have strong demographic potential and a few well-funded EdTech scale-ups, but less developed support systems. For these regions, building out their communities -- often in conjunction with other factors, such as funding -- is an opportunity.

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