- Investors bullish on AI reviving edtech.
- Existing models must thoughtfully integrate AI capabilities.
- Despite downturn, early stage deal-making continues; breakout potential seen for startups effectively harnessing AI.
AI advancements set to revive edtech
Edtech may have lost steam since its pandemic highs, but several investors say AI advancements position the sector for a rebound.
“Tailwinds for a boom in edtech” will come in 2024 as AI transforms industries and drives demand re-skilling, predicts Day One Ventures Founder Masha Bucher.
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Existing edtech models plug in the AI
While AI hype abounds, investors emphasize startups must thoughtfully integrate the technology.
“Simply labeling generative AI as an edtech product isn’t enough,” says Earlybird’s Marieke Gehres. The magic happens when AI enhances an already robust offering like Duolingo.
Still, some see AI acqui-hires increasing amid talent shortages.
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Optimism amidst downturn
The downturn hasn’t dampened deal-making at the earliest stages. “As a pure pre-seed investor, 2023 activity was almost unaffected,” notes Emerge Founder Jan Lynn-Matern.
As unicorns stumble, investors say nimble startups able to monetize both B2B and B2C models will come out ahead.
In an otherwise gloomy funding environment, edtech’s longtime boosters remain undeterred.
Bullish on AI’s potential to transform learning, multiple investors predict thawing markets could unleash an influx of investor interest in 2024.
For founders able to compellingly harness AI today, the next wave of breakout hits may await.
