EdTech still going strong with £3m investment in UK HE skills training platform Aptem
“The world is rapidly changing, with globalisation giving way to protectionism”
Aptem (MWS Technology Ltd), the market-leading SaaS software provider for apprenticeships, vocational training and employability, has secured £3 additional funding at a valuation of £33 million from long-term investors 24Haymarket and Guinness Ventures. Despite UK crises and talk of funding cuts, alongside a level of disenchantment with online learning in HE, EdTech is still seen as a good bet.
It is no exaggeration to say that the UK is in a political and economic crisis. With a new government (albeit the same political party) every two years and three different education secretaries in 2022 alone, the impact on education has been stark. Reliant on stability and continuity, particularly in an era of funding constraints, the sector is struggling to deliver the skills the UK needs.
Current UK policy towards the higher education sector is uncertain. The Johnson government was keen to press ahead with expanding degree apprenticeships – albeit with limited funding. No one yet knows what the new government – focused on growth, deregulation and a shrinking state – will do with universities. However, it appears their commitment to skills remains firm, with plans for new vocational colleges.
The latest investment round in Aptem – a rapidly growing SME and one of the leading providers of apprenticeship EDTech in universities – may be compelling evidence that skills are still firmly on the agenda, including degree apprenticeships.
The international EdTech sector was already growing before the pandemic, but the need to end in-person teaching for most fuelled exponential growth and rapid investment. In 2020, global EdTech investment reached $36.4 billion, compared to $18.7 billion in 2019.
With most countries worldwide declaring that Covid mitigations were at an end and with growing economic and geopolitical turbulence, commentators expected that investment in 2022 might fall. However, while there has been a slowdown in the US, Europe has seen continued growth, with Brighteye Ventures revealing that investment was 40% higher than in recent years. There is also a slowdown focused on fewer companies, but that doesn’t imply an over-inflated bubble about to burst.
As Reach Capital’s Jomayra Herrera says: “The deal pace has definitely slowed down in 2022 across most sectors. For context, we were closing a transaction every four days last year, and that has significantly dropped this year given the market conditions. I would say the past few years have been more of an anomaly, and we are getting back to a more sustainable pace.”
Skills and labour shortages
It appears EdTech is here to stay. Several trends are driving widespread adoption. In some areas, it is about skills and labour shortages. To return to Aptem’s primary market, the UK is suffering post-Brexit skills and labour shortages with a burden of pandemic-related ill-health among the – in particular – over-50s labour market. In the US, ‘quiet quitting’ may affect over 50% of the workforce. A World Economic Forum/PWC report has estimated that half of the global workforce will need upskilling by 2025.
More broadly, the world is rapidly changing, with globalisation giving way to protectionism. In this context, says Ashley Bittner and Kate Ballinger of Firework Ventures, governments and companies are investing in the existing labour force to achieve growth rather than saving money by shedding and rehiring. Few countries can afford to disinvest in skills.
An EdTech future for HE
This is where EdTech comes in. It promises to deliver education and skills in a flexible and mostly remote form, that is, ‘learning in the flow of work’. Furthermore, there is evidence that populations have become more accustomed to learning, and teaching, through tech (even if they aren’t fully convinced).
Not all EdTech startups will survive. Intuitive platforms that can flexibly adapt to in-person and online learning, are end-to-end and have a strong management team dedicated to sustainable growth, are most likely to be seen by investors as long-term winners. AI, data, game-based learning, and AR/VR are central to EdTech’s future.
When it comes to education and skills, EdTech is still seen as a great bet for investors. Universities, and suppliers like Aptem, need to think hard about what it means for institutions, learning delivery, and student satisfaction in the post-pandemic world.
About the author: Richard Alberg is CEO of Aptem (MWS Technology Ltd.). He co-founded and was a board member of management and technology training provider, Corndel, and was chair of North Hertfordshire College until the expiry of his term in June 2017.
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