Edtech’s venture capital-backed globalization stops in China – TechCrunch

Edtech based investors in the United States is increasingly globalizing, but recent regulatory crackdowns in China, which ordered local K-12 tutoring startups to become nonprofits, has led to a chill among checkwriters who look at the country.

When I first started reporting on edtech over a year ago, American investors often cited China as a validation of the opportunity for direct-to-consumer businesses in the K-12 world. The success of Chinese edtech has been used to predict the rise of US-based mainstream edtech, which has seen parental adoption increase during the pandemic.

On Saturday, the Chinese government put in place legislation to ease the financial burden of educational services for families, to the detriment of venture-backed startups.

On Saturday, however, the Chinese government put in place legislation to ease the financial burden of educational services for families, to the detriment of venture-backed startups. Reactions have been mixed: One founder told me he doubled his personal stake in every Chinese publicly listed edtech start-up, considering the current issues were just one leap in the timeline, but another. told me he was happy to have sold his investments in China last month.

And everyone seems to be looking at India as the next geographic testing ground.

“We didn’t think we were smart enough”

Reuters reported last week that China was banning for-profit tutoring platforms on basic school subjects. The country has also introduced time limits and curfews for private lessons, including banning platforms from raising capital through IPOs and advertising their programs. The news sent Chinese edtech stocks tumbling – NYSE-listed shares of TAL Education, for example, closed at $ 4.47 per share on Monday, down nearly 80% from $ 20.52 per share. last Thursday before the news broke.

Owl Ventures, which has one of the largest edtech-focused funds with $ 585 million, has been actively investing globally in recent years. Investor Ian Chiu said last October that he viewed K-12 tutoring in China as “the biggest education market today.”


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Estelle D. Eden

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