KUALA LUMPUR (Aug 26): After spending record sums in 2021, investors in education technology startups have started pulling back.

In a report on Thursday (Aug 25), Crunchbase — which tracks trends, investments and news of global companies from start-ups to the Fortune 1000 — said its analysis of venture funding to edtech and education startups in the US and abroad showed that funding to US companies in the space is on track to come in at less than half-year ago levels.

It said that globally, the numbers were down too, with around US$5.4 billion going into seed and venture rounds for education and edtech companies so far this year. It is on track to come in well below the US$15.8 billion investors poured into the space in 2021.

Crunchbase said this year’s pullback comes amid a not-particularly bearish environment for edtech.

It said key investment themes over the past couple years — including the rise of upskilling, growing acclimation to online learning, and the growth of direct-to-consumer models — are all ongoing trends.

And while students are mostly back in physical classrooms as pandemic restrictions lift, this is neither a surprise nor a negative development.

No one expected that Covid-induced shifts to fully online learning would stick long term, it added.

Crunchbase said the high-flying edtech public market entrants of the past few years are all way down.

It said higher education course platform Coursera, which went public in early 2021, is down over 70% from its 12-month peak.

Online class provider Udemy and language learning app Duolingo, both of which went public last year, are also down sharply from their highs.

The share price declines come as newly public tech companies in all sub-sectors are seeing steep cuts, so it’s not a message investors are sending specifically about the edtech space.

The three above-mentioned companies, meanwhile, have all posted double-digit annual revenue gains in their latest quarterly reports.

The report said venture capitalists got the message on the valuation front, and have adjusted accordingly.

So far this year, just three US education or edtech-focused startups raised rounds of US$100 million or more, per Crunchbase data.