Educapital, headquartered in Paris, is raising Europe’s largest edtech fund – €150m – amid a surge in investment in what was previously an undercapitalized European tech sector.
Educapital has already raised 100 million euros for the fund, its second. It aims to close it later this year, according to founding partner Marie-Christine Levet – in time for children to return to school.
The company will invest the fund in 20 European edtech startups, from post-seed to Series B, with Series A being the primary target. The average amount of the checks will be between 3 and 10 million euros.
The pandemic “has really accelerated the digital transformation of the education and training sectors and has shown the need for investment and innovation in this area,” says Levet. “We think it’s a really good time to invest.”
Europe has historically lagged other parts of the world like the US, China, and India in terms of investing in edtech. Until June 2020, when Oslo-based Kahoot! hit the $1 billion valuation milestone, Europe had no private edtech unicorns. Kahoot! is now listed on the stock exchange.
That trend has now reversed, and the continent’s edtech founders have raised significant capital. Austrian edtech unicorn GoStudent recently raised $340 million led by Prosusand Educapital holding company 360Learning raised $200 million last year from Silver Lake, SoftBank and others.
Educapital is one of the few funds in Europe run by generalist women. Levet has a background in entrepreneurship while her co-founder Litzie Maarek previously worked in private equity. The firm claims that 40% of companies in Educapital’s portfolio were also founded or co-founded by a woman.
Other European funds founded and run by women include Pink salt companies in the United Kingdom, Unconventional Ventures in the Nordics, January Ventures which invests in the United States and Europe and Revaia in France.
future of education
Levet expects to see more edtech innovations in two areas: adaptive learning and virtual reality. “Adaptive learning” includes educational tools that use machine learning to adapt to users’ needs and offer them a personalized program.
She believes virtual reality will be a key tool for K-12 teachers to engage students more in the future. A portfolio company of Educapital, Labstercreates virtual labs for students and has raised a total of $104 million, according to Dealroom.
Levet says that all edtech founders who walk through the doors of Educapital to pitch should focus on clearly demonstrating three things:
- Demonstrate the quality of your team. Levet says that sometimes the best innovators in the industry do not do have a school education. “When you have all the theory of the education sector, it sometimes prevents you from innovating,” she says.
- Demonstrate your unique selling position. “Often there are too many copycats and people doing the same thing as everyone else,” she says.
- Demonstrate proof of success. Educapital primarily targets Series A companies, which means it wants them to be able to show some traction. “If it’s B2B, it can be customers. Your customers are your best investors in the beginning. And if it’s B2C, it’s usage. You have to have traction,” Levet says.
Levet says the fund’s investors include companies such as French publisher Hachette, French banks and insurers and family offices across Europe, including the family that owns Decathlon and the Swiss Jacobs family.
Eleanor Warnock is Sifted’s associate editor. She tweets from @misssaxbys