Edtech investor Owl Ventures closed over $1 billion across several funds in the latter half of 2021 as venture interest in the education sector grows, especially during the pandemic.
The venture firm closed its fifth fund, raising $640 million, including $270 million for its opportunity fund and over $100 million for other special purpose vehicles. These new funds are expected to allow Owl Ventures to lead investments in edtech deals.
Amit A Patel, managing director at Owl Ventures, said the support for the funds shows commitment to a sector they feel is just now hitting its stride.
“We’re at the very beginning stages of a multi-decade opportunity within the sector,” Patel said. “We’re kind of in the first pitch of the first inning basically.”
He added that innovation and technology had improved significantly in the past few years, along with demand, and more companies are seeking to scale up.
In a filing with the Securities and Exchange Commission in July, Owl Ventures said it was targeting $450 million for its fifth fund. For its opportunity fund, the firm said it’s a good chance for Owl Ventures to continue to be a part of the early- and growth-stage companies it invests in as they continue to scale up, especially as many are choosing to stay public longer.
Owl Ventures’ portfolio includes MasterClass, Newsela, Quizlet and Stash. One of its most significant investments is in Indian edtech provider Byju’s, which is considered one of the most valuable education companies in the world.
Managing director Ian Chiu said the edtech sector is only going to continue to grow as more people get used to the platforms that were forced into use at the onset of the covid-19 pandemic.
“We are not going back to what we had before because there was already an inflection point happening around digital technology,” Chiu said. “Look at what happened with SARS and e-commerce where it accelerated key trends that were already happening and led to decades more of innovation.”
As more innovation comes to the edtech sector, Owl Ventures sees opportunities in areas that are not traditionally seen as part of edtech, particularly where edtech converges with other sectors like fintech, such as in expanding financial education.
Patel said another factor that’s helping grow the sector is the need for upskilling or retraining workers. As more companies adapt to a remote workforce, they can hire from many different parts of the world and workers can now access various upskilling programs digitally. He highlighted SV Academy, which provides training classes in the sales industry to underrepresented communities, as an example.