Online employee education startups are booming, according to a report by the consulting firm McKinsey. Investment in these companies has grown at a compound annual rate of 45% over the past five years, with dozens of startups becoming unicorns. McKinsey identified the trends emerging in this booming sector:

•  Capital inflows to these companies are higher than ever, reflecting companies’ need to train their employees in light of the digital transformation processes they are undergoing.
• Due to the high sales and marketing costs of edtech companies (between 20 and 60 percent of their revenue), mergers and acquisitions are seen as the way to gain market share and improve efficiency.
• The B2B market is the main driver of this growth. Large companies view employee training and development as a necessity. Companies such as Walmart, Google, and Amazon have announced significant investments toward this goal. As a result, of the 15 adult edtech companies that raised the most capital in 2021, 14 offer B2B solutions.
• India is emerging as one of the leading markets for edtech, partly due to restrictions in China and the fact that English is widely spoken in India. In 2020, China accounted for 63% of global edtech funding, falling to 13% in 2021, when India accounted for 18%.

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Source: HolonIQ/McKinsey