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The pandemic has shown that it has dark sides that no one wants to be in, but often there not much to do about it. In turn, there are companies and people who have taken advantage the situation. None more exemplary than educational technology companies from China, which have shown a reliable path of growth, operational results and investor’s rewards.
According to open data, in 2020 13 EdTech companies joined the Chinese stock exchanges, specializing primarily in K-12 services, online education and vocational education.
At the time of writing, the companies are down from historical heights and upswings, which in some cases reached 50% growth in a matter of days or weeks. Blue Elephant Capital says that the companies that have been in the industry the longest did show an increase of 40% and 50%, but instead, the new companies registered showed an increase of 90% and 300% over the past year.
In 2020 three of the China-based education companies reached a market value of more than 100,000 Yuan (approximately $ 415,374 USD at time of writing).
According to Duojing Capital, in 2020 there were 21 mergers in the education industry, 9 agreements concluded for educational computerization and 6 for vocational education. Early childhood and K-12 education were also involved in this event.
It is understandable that the actions of K-12 increased and were stable at the beginning of the pandemic, but when face-to-face education decreased, it gradually recovered and virtual education is decreasing little by little, but it cannot be denied that the pandemic allowed educational methodologies to necessarily evolve.
EdTech In China Skyrocketed In 2020, Again
In 2020 there were 27 financing agreements for the K-12 market that had a reduction of almost 50%.
But this led to over $7.7 billion, and the top five deals were for educational providers given the COVID-19 pandemic, which has boosted the penetration rate of online education.
According to Duojing Capital, there were 257 financing deals closed by technology education companies in China.
Thus, having a total amount of financing of $9.75 million, this occurred due to transactions of large sums of money in the second half of 2020.
In addition, the increase in penetration rates in rural areas or areas with difficult access where a large part of the Chinese population lives, and the growing demand for educational resources, have stimulated the continuous development of the industry.
According to Chinese market trends, the online K-12 market is estimated to reach $300 billion by 2024.