Here are some of the takeaways from keynote speaker Mr. Alex Ng, Managing Director of Spaze Ventures, and panel discussion with Mr. Neo Zhizhong, CEO & Co-founder of Geniebook, Mr. Stanley Han, Founder & CEO, Koobits, and Ms. Yvonne Soh, CEO & Co-founder, Noodle Factory during our Deep Dive series on Understanding and Investing in Edtech Startups.
The EdTech industry has experienced rapid transformation over the last decade, with advancements in AI in education, changing learning models, and the ongoing challenge of scaling EdTech businesses globally. Through discussions with experienced founders and investors, we’ve distilled key EdTech trends that shape the future of online learning and education technology.
1. The Evolution of EdTech & Market Growth
Over the past few years, the education technology industry has witnessed both growth and transformation. While digital learning was already on the rise, COVID-19 accelerated the adoption of online education. Despite this growth, some aspects of the industry are still evolving, requiring EdTech startups to continuously adapt to new challenges and opportunities. Industry veterans with over a decade of experience acknowledge that while EdTech has made significant progress, new challenges in online learning continue to emerge that demand innovative solutions.
2. AI in Education: Opportunities & Challenges
AI-powered learning is revolutionizing education, making personalized learning more effective. However, simply adding AI in EdTech does not guarantee success. Many companies initially focused on building AI tools for education, but this approach proved unsustainable. Successful AI-driven EdTech solutions enhance student outcomes and improve teacher efficiency.
“We don’t allow AI to replace teachers, but rather to empower them.”
A well-integrated AI system empowers educators rather than replacing them. AI is most effective when used to support teachers, enabling them to provide adaptive learning experiences and freeing up time for meaningful student interactions. Companies that recognize this and develop AI-powered education tools that complement human educators are more likely to succeed.
3. The Digital Shift Post-COVID
Even as students return to physical classrooms, hybrid learning models remain critical. The pandemic accelerated the adoption of digital education platforms, and many EdTech businesses have retained blended learning approaches. This shift has also influenced the way institutions structure their courses, with many still leveraging learning management systems (LMS) for flexibility and accessibility.
4. Validating Market Fit: Beyond Vision
A strong vision is necessary, but true market validation for EdTech startups comes from traction, engagement, and sales. Many founders enter the EdTech sector with a grand vision, only to struggle when it comes to proving real demand. A company’s success is ultimately measured by user adoption, revenue growth, and retention rates. Entrepreneurs who focus on solving specific pain points in education technology and securing early adopters are more likely to establish a sustainable business.
Moreover, the distinction between a startup vs. small business in EdTech becomes evident in this phase. While small businesses focus on steady operations, EdTech startups need to rapidly iterate and scale. This mindset shift is crucial for founders seeking venture capital for EdTech and global expansion.
5. The Challenges of Scaling Internationally
Expanding into different countries requires deep localization, from adapting to curriculum differences to navigating education regulations. Scaling an EdTech business globally requires understanding local markets, modifying offerings to fit regional education policies, and ensuring compliance with country-specific education laws.
“Every country has its own curriculum, and it’s critical to align with local standards.”
For example, every country has its own curriculum standards, and aligning EdTech products with these frameworks is essential. Additionally, EdTech companies expanding internationally must consider language barriers, cultural expectations, and differences in technology infrastructure.
6. Rising Customer Acquisition Costs
With more players entering the EdTech market, the cost of acquiring new users is rising. Digital marketing for EdTech continues to grow, making customer acquisition in EdTech increasingly expensive. Companies that rely solely on paid advertising for education platforms may find their customer acquisition costs (CAC) becoming unsustainable.
To mitigate this, successful EdTech startups are focusing on organic growth strategies, referral programs, and community-driven engagement. By building a product that naturally encourages word-of-mouth marketing, businesses can reduce reliance on high-cost digital ads for education businesses.
7. Differentiating in a Crowded Market
A key challenge in EdTech business growth is standing out. With AI-powered education platforms becoming more common, companies must differentiate themselves by delivering a superior online learning experience rather than just incorporating AI as a buzzword. Many businesses have fallen into the trap of branding themselves as AI-driven education platforms without offering a tangible improvement in education quality.
The most successful EdTech platforms integrate adaptive learning technology, real-time feedback, and data-driven insights while maintaining a human touch in education. AI should work alongside teachers, enhancing the learning experience rather than replacing their role.
“The best AI doesn’t work without teachers—it must be a collaboration.”
8. Hiring & Building the Right Team
The right team can make or break an EdTech startup. Founders must be deliberate about hiring for EdTech businesses, ensuring that every team member aligns with the company’s mission in education.
“We initially thought experience was everything, but later realized adaptability mattered more.”
A common mistake is prioritizing experience over adaptability in the EdTech industry. While industry experience is valuable, EdTech companies scaling often need people who can pivot, learn quickly, and thrive in uncertain environments.
“If it’s not a sure ‘yes’ when hiring, then it’s a sure ‘no’.’”
Another important hiring lesson is recognizing that if a candidate does not feel like a definite fit for an EdTech startup, then it is likely a “no.” The cost of hiring the wrong person in a startup environment can be high, as misalignment in culture and vision can slow down progress significantly.
9. Balancing Profitability & Mission
“We’re not a non-profit, but we’re also driven by a mission, and balancing both is hard.”
Many EdTech founders struggle between ensuring financial sustainability and fulfilling their education mission. While education businesses serve a noble cause, they still need to be profitable EdTech ventures to survive and scale. One of the biggest challenges is identifying who will pay for an EdTech product.
Some companies rely on direct-to-consumer (DTC) EdTech models, where parents pay for online education subscriptions. Others partner with schools, governments, or corporate learning initiatives to secure funding. Regardless of the approach, founders must find a balance between accessibility in EdTech and revenue generation in education technology to sustain long-term growth in EdTech.
10. The Future of AI in Education
“AI will not replace teachers; it will make them more effective.”
AI-powered learning systems will become the norm, but they won’t replace educators. Instead, AI in education will enhance teaching methodologies, streamline administrative tasks, and personalize learning experiences at scale. As AI-driven learning management systems (LMS) become more widespread, schools and EdTech companies will increasingly integrate them into their curriculum development strategies.
However, the role of teachers in AI-driven classrooms remains crucial. The best AI learning tools will serve as intelligent assistants for educators, helping them optimize lesson plans, assess student progress, and provide targeted interventions. Rather than replacing human instruction, AI-driven education platforms will make teaching more effective and scalable.
Final Thoughts
The EdTech landscape is evolving rapidly, and success requires more than just innovative education technology. Founders must focus on real user value, strategic differentiation in EdTech, and sustainable growth strategies. AI in EdTech, data-driven personalization in education, and hybrid learning models will continue to shape the industry’s future.
Companies that remain adaptable in the education sector, prioritize meaningful AI integration in learning, and build strong teams in EdTech will be best positioned for long-term success. As we look ahead, the EdTech industry holds immense potential to transform education, making learning more accessible and effective worldwide.
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