Tag Archives: Education

What’s the impact of the coronavirus outbreak on the edtech industry?


Earlier today we had an online meeting of edtech entrepreneurs mainly from Northern Europe, organised by Heikki Rusama, CEO & Co-Founder of the teacher platform Freeed.com.  He interviewed me to share views on the possible impact of the corona-crisis on the education industry in general and edtech in particular.  It was great to see these entrepreneurs, albeit at a distance. I made an abbreviated transcript below for those who couldn’t join.

Heikki: Schools have been closed in Finland and we are now planning to open them again. ​What is the impact of the coronavirus outbreak for the education industry and edtech industry specifically?      

“One billion children in lockdown”

John: There are about 1.5bn school-aged kids globally and about 1bn of them are currently in lockdown-type situations. Some places, especially in Northern Europe are about to start experimenting with coming out of it.

We’ve seen massive disruption to the operating model, impacting the learnflow of pupils, the workflow of teachers, and the communication channels and the wellbeing of everybody.

This is a very sorry situation for society as a whole, it’s probably mixed news for education depending on the role in the value chain and the time frame, but overall this is probably quite positive for parts of the edtech industry, arguably a once-in-a-lifetime triggering event for deploying edtech.

“Once in a lifetime triggering event for edtech”

Short term, from an education industry perspective, there’s good news and bad news:

  • The short term winners are likely to be the big platforms and digital or blended incumbents. Probably Microsoft and Google will benefit most of all. Some incumbents might benefit if they’re well invested in digital and also because they’re known and trusted and have existing customers and established channels. People tend to choose for safety in a crisis
  • The hardest short-term pain is likely to be felt by universities (especially those with a heavy enrolment of international students) and private school chains, as social distancing significantly disrupts their operating and earnings models.

Medium term, it’s possible that education might benefit, because we’re likely to have a fierce recession or depression; although this is negative for society as whole, it normally gives a boost to education as people seek to acquire skills, upskill and re-skill and use their time usefully between jobs.

Long term, the impact is harder to predict and arguably depends on whether we have a rapid “V-shaped” recovery, or if we will have a more protracted “W” or even an “L-shaped” recovery (hopefully not!).

If it’s a V-shaped recovery, then probably the most likely outcome is a step change towards digital and an acceleration of the current direction of change to an ever-higher penetration of digital in the mix.  In other words, learning and teaching become incrementally more digital within a blended model.

However, my personal view is that we’re likely to go into an extended period, maybe 1-4 years, of the “1.5 metre society”.  This being a period of social distancing and intermittent lockdowns, until either a vaccine is deployed, or medications found, or group immunity has been established.  With current immunity at about 3-4% of the population, we are currently far away from the 60-70% required to achieve group immunity, so opening-up society will likely lead to rapid increases in new infections and new lockdowns.

“New operating model for schools?”

What does a “1.5 metre school” look like? There are probably lots of variations, but this will probably mean smaller classes, more learning from home, basically a new operating model, with a very significant digital element.

This scenario is likely to be quite bullish for the edtech industry. Here I think the bigger school-level platforms are likely to prosper in K12, and the big brand universities with a strong online presence will win in Higher Education.

However, in this scenario, state funded education systems and privately funded schools are likely to come under significant financial strain as costs rise and public spending and private wallets come under pressure. It might therefore be the case that some digital-first-institutions and -companies might prosper within an overall less healthy market than it would have been without the corona-crisis.

“New opportunities for new ventures”

So you are all leading start-ups and I think your advantage might come through agility.  I would expect the winners in the start-up space compared with the pre-corona situation to be

  • data-driven business, which will get even hotter than they already were, as it has now been shown that customers might be a bit less squeamish about data than was earlier the case,
  • companies enabling teacher workflow, since the time of teachers will become an increasingly scarce and precious resource,
  • well-being and social emotional learning approaches are likely to get a boost.

Heikki: Many edtech companies have reported exceptional usage and even sales numbers during the crisis. Do you think that the impact will last beyond the pandemic era?

“Digital usage likely to drop back somewhat from current peaks”

John: I reckon current usage levels are probably exceptional because

  1. The model is now predominantly pure-play distance
  2. Usage is nearly always highest around the time of a triggering event

When the norm is once again face-to-face, use of digital will probably fall back somewhat, and when the triggering event is behind us, the novelty effect will also fall away.  I do expect there will be a structural increase, but usage will fall back as schools open.

Heikki: Many companies have opened their offering for free during the crisis. Do you think this is a good strategy?  

Do “good” business

John: The way I see this is that we lead “missionary businesses”. Morally I think it is in many cases the right thing to do at this time.  Our societies are going through the biggest crisis of our lifetimes and we can help. It’s our duty to do the right thing and help.  Whether it makes sense from the perspective of the long-term business strategy, I don’t know, but would be inclined to be positive:

  • Is a freemium model in any case the right thing for your business?
  • If not, schools might be more inclined to feel goodwill towards you when you eventually ask a price, if you were generous and not profiteering from them in their darkest hour
  • For the long term, I tend to think that quality and reliability are more important factors in education than price (free), and charging a fair price for a good service according to competitive market practices is a sustainable approach
  • Overall, depending on the business you’re in, I can see that offering some months for free, maybe till the summer, might be most helpful to teachers and pupils, and might create goodwill for the future.

Heikki: Over the years you have consistently spoken about the importance of technology, but also advocated the blended learning model, combining the physical and digital. Has something changed during the corona-crisis in your thinking? Have you changed your mind about edtech in some ways during the crisis? 

“Blended learning with a stronger digital element has great prospects”

John: I remain a big believer in the blended model. This model is also working well in the crisis. You know, books also work very effectively in homes as well as schools, it’s not just about digital.  I do think physical proximity of teachers and pupils is essential to good K-12 education and distance learning is essentially a poor alternative for this age group. But I’m happy to see digital boosted in the mix.  What has surprised me has been the relative ease of transition to online models, and particularly the deep penetration of Google and Microsoft.  It feels like a journey that was taking 10 years, got accelerated into two weeks!

Heikki: It seems that this pandemic provides a massive exposure for edtech companies. However, some fundamental issues remain. One of those is the question of sales & distribution channels. There are several national and international initiatives, trying to solve this. The key question is, I think, how to make the “edtech ecosystem” stronger and less fragmented, together?

John: the pandemic doesn’t in any way solve the go-to-market problem. It’s good to have open marketplaces with easy procurement processes and it’s helpful to have start-up networks and so on, these initiatives are worthy. In edtech I don’t think there’s a shortage of ideas or talent.  I don’t think there’s a shortage of money for good businesses.  Sparkmind.vc in Helsinki should bring a nice boost!

However, and I realise this might not be a very popular view to this audience, I believe the fundamental problem of European edtech is that it’s sub-scale and fragmented. It will be very hard for us to compete with the Chinese, Indians and Americans on the tech part of edtech in the long term. We can compete on local market approaches and pedagogy however. We have to solve the problem of fragmentation and lack of scale.

“Imagine your life as a teacher”

Also think about it from the customer perspective. Think about a teacher. She is mainly concerned about leading what is often an unruly classroom, effectively. There are vocal parents and there’s lots of administration to do. Teachers simply don’t have time to listen to sales pitches from 3000 edtech companies nor use 3000 different solutions.

So it’s my belief that we need to enter the next stage of maturity as an industry, to move from fragmentation and to start to consolidate around a smaller number of national and regional, maybe even global champions with strong and maybe rather broad portfolios and deep networks. And we need to inter-operate across the ecosystem.

Edtech ventures might typically want to experiment with three alternative go-to-market approaches: direct, via distributors, and with partners. In addition, it might also make sense in many cases to integrate with Microsoft and Google, they have good experience in interoperating their networks.

“Go local!”

I do have a bit of a hobby horse with education which goes against a major dogma in digital markets.  In digital everyone says you need to “go global”.  You know, K-12 education is really a local market.  My view is that you need to become a “system player” in a local market to succeed. “Go local” is my credo in education 😊.

Heikki: Who should take lead in this? Global tech giants, Big educational publishers, countries or individual companies?

John: It varies per country and segment.  Who are the bigger companies serving the customers you want to serve?  Can you partner with them?  Can you learn how they do it?  Take the initiative and go and speak with them.

Heikki: Does this time make you a more or less enthusiastic edtech investor?

John: I’ve always been an edtech enthusiast.  Broadly speaking, the corona-crisis is probably bullish for the edtech sector. From an investment perspective, alongside investing in attractive edtech assets directly,  I’m also thinking in a contrarian way.  Might it as an investor also make sense to buy out-of favour “legacy assets” and transform them to digital using edtech?

Heikki: What technologies or concepts are you the most interested in at the moment?

John: I always think you have to look at what the problems are that need to be solved, and what’s scarce: Two areas particularly interest me:

  • Supporting teacher workflow (globally a major shortage of teachers and growing pressure on their time)
  • Data driven approaches – insights are currently barely being used in education and market has just proven itself to be a bit less squeamish than it was about data

Heikki: Finally, what are the 3 things that every edtech entrepreneur should care about? 


  1. Building a winning team is key to everything. Hire the very best people you can get.
  2. Put the user-experience first in your offering. Make it really easy to use. Teachers have complicated lives. Make it easy enough that a teacher leading 25 unruly kids all at the same time, can use it with ease.
  3. Work out your go-to-market approach and especially which markets to be in. Go local!
  4. I will add a fourth bonus point if I may. We’re going into an uncertain future, ranging from a rapid recovery to a depression. People are generally bullish on edtech right now, there is money in the market.  Make sure you have your funding in shape, and you have a good runway ahead of you.

After the interview we had interesting updates from Sari Hurme-Mehtälä, CEO at Kide Science about recent successes in China, Kristo Lehtonen CEO at 3D Bear about the great exposure they have had with Apple and Google, and Heini Karppinen, Chair of Edtech Finland, encouraging everyone to stay connected.  Very helpful!

Thanks for participating.  Keep the faith and stay safe!

Looking forward>>

Looking for new opportunities in education (technology)

Europe’s biggest edtech company

After 10 years at Sanoma, mostly leading Sanoma Learning, I’ve informed the company of my intention to move on as of spring next year, giving plenty of time to arrange a smooth handover to a successor.  Check out the press release of 13 November about it here.

Great place to work

It’s been an honour to lead Learning during this period, and I’m really proud about what the teams have achieved.  I love the dedication to learning that can be felt across the company and very much respect the commitment of our people to do a great job for pupils and teachers.

Growth and successful transformation

Our teams have achieved a lot of success in local markets and made great leaps forward on the digital transformation.  We have worked together intensively across the company on the High Five program in building one Sanoma Learning.  And we’ve completed a number of acquisitions including Sanoma Utbildning in Sweden, Tammi Learning in Finland, De Boeck in Belgium and and Iddink in The Netherlands, Belgium and Spain.  We are now about twice the size we were five years ago.

Amongst the best performers in the industry

Today we stand as a very successful company.  We are positively impacting about 11m learners and 1m teachers in some of the World’s best education systems through a professional organization of some 1700 talented people. We are a frontrunner on the digital transformation, arguably Europe’s biggest edtech company today in terms of revenues and employment.

We’re growing and amongst the best performing companies in the industry financially: 2018 brought us the strongest result in our history so far, and we are well on track to extend that success further in 2019.  It has really been a privilege to be part of this great company!

My priority right now is to continue leading Learning effectively and then to handover to a successor before leaving Sanoma.

Investing in education/technology

After that, I’m intending to make some investments in the education (technology) sector and to see where that  brings me.  For early stage investments I will be investing in and working together with eduimpact.fi.  For later stage investments I will work together with other investors.  Feel free to reach out to me at johnrichmartin@gmail.com if you think I could in some way help your company to prosper.

Thank you!

Thank you to my colleagues at Sanoma Learning for their excellent work and cooperation through the years. Wishing them and Sanoma Learning all the best for a bright future ahead!

Looking forward >>

John Martin

Teachers Want to Go Digital Where it Brings Most Benefits

In the fifth annual Sanoma Learning Impact Framework (SLIF), we decided to focus on the main tasks the teacher performs in her profession. In total 7075 teachers responded to the survey, which was again carried out in all of the markets in which we operate: Belgium, Finland, The Netherlands, Poland and Sweden.

Core activities

The main tasks for teacher are: lesson planning, teaching the whole class, exercising, testing, assessment and giving guidance personally or in small groups. Of course there are other tasks too, such as administrative work and professional development, but these are the most frequently repeated activities.

Figure 1 depicts the amount of time teachers estimate they spend on each activity. Teaching the whole study group takes most of the teachers’ time, but still only less than a third.


Figure 1. Percentage of time spent on different tasks

As part of the digital transformation, we are as an educational publisher very interested in whether teachers prefer print or digital materials to support them in their work. Our experience so far is that they value both, and in last year’s SLIF we came to the conclusion that blended learning is the way to go.

As-is/to-be: medium vs activity

This time we decided to be more specific and map the print vs. digital axis with the activities a teacher carries out. This provided us with revealing results, as depicted in Figure 2.


Figure 2. Materials and tools offered by publishers: Current use vs. Willingness to use

First of all, teachers would like to use more digital materials in all tasks than at present. Secondly, and perhaps more interestingly, the gap between current and desired state is the greatest in tasks where pupils/students have a relatively more active role, namely exercising, testing, and assessment.

Currently 65% of teachers are using printed tests/exams. 28% say they use half & half or primarily digital tests/exams. Contrasting this with the desired state is staggering and the percentages get flipped: only 28% would like to use primarily print and 68% half or primarily digital. A similar phenomenon can be seen in exercising and assessment.

Digital where it makes most impact

What to make of this? We think the answer is simple. Both exercising and testing generate a lot of new content and insights for the teacher to go through. This makes assessment time-consuming for the teacher. With both questions and answers in a digital form, time is saved, insights are increased and pupil/student engagement is enhanced. Teachers are selectively looking to use digital for maximum impact.

Santtu Toivonen, Lead Insight Manager, Sanoma Pro

John Martin, CEO, Sanoma Learning

How many edtech companies are exporting more than $20M each year?

Source: HolonIQ

Source: HolonIQ

The promise of education markets is well marketed.  Estimates have been made that global education and training spend will reach approximately $10T (that’s $10,000,000,000,000) by 2030, about 6% of global GDP, with approximately 55% spent on the K-12 sector (somewhat above $3T this year).

Global edtech spend is forecasted to grow from $152B in 2018 (a paltry 2.6% of total spending) to $342B in 2025 (a slightly less meagre 4.4%).

Growth in edtech spend

Source: HolonIQ.com

Applying technology to learning and teaching should be a massive opportunity to both improve learning impact and to build a successful business, right?

I’m convinced on both counts.  But if global spend on K-12 is $3T then why is the spend on edtech so relatively modest? It’s mainly important to remember that about 80% of spending in K-12 is on teachers and other staff, with additional spending on other fixed costs such as buildings. Conceptually, in a pure-play digital future, in which teachers might be replaced with AI and robots, this could be an addressable market. However, this seems unlikely to happen at scale any time soon, since it would be not only pedagogically unsound but also socially unacceptable.  (It’s my own belief that the human teacher is the “killer app” in education).

Spending on Staff

Source: OECD Education at a Glance 2018

It seems more likely that technology will be used to super-charge teachers and enable more flexible organization forms for teaching.

Is there a global market for K-12 edtech?

If we would assume for the sake of argument that 2.6% of spending on K-12 education is digital (see above), this would imply a current spend of about $85B.

I would like to understand how much success the edtech industry is having in scaling internationally. How much of the $85B is being spent on local vs global solutions and how big is the opportunity for global vendors? It’s important for us to understand this dynamic as an industry: it will inform our investment decisions and potential to make an impact on learning.

Although the edtech market is not yet very mature, it is of a sufficient scale that we should expect to see successful global operators in edtech in K-12, if the market has a (partially) global nature.  Imagine we set a very low threshold: 0.025% of $85B spend, roughly $20M.  How many edtech companies are there in K-12 today who are generating $20M sales or more each year on edtech offerings being sold outside their market of origin?  More than 100? Less than 10?  I simply don’t know, my guess is there are tens rather than hundreds or thousands.

Who is exporting more than $20M?

I am very keen to discover and understand examples of such companies (exporting more than $20M of edtech each year outside of their home markets in K-12).  I would appreciate it if you would reach out to me when you know of good examples, or if you know of any good reports on the subject.  (Of course there are a number of examples I am aware of and I am excluding the likes of Apple, Microsoft, Samsung and so on, which are more generic tech solutions than specifically edtech).

Assuming it’s likely the international opportunity is currently under-developed, are there things that we can do together as an industry to unlock this potential?  At Sanoma we have successfully scaled our bingel platform in primary education across geographies, and are now working on the same with Kampus in secondary education.  Therefore within a Group it seems to be possible.  Are there other examples across Groups or through partnerships that have scaled successfully across international markets?  What can we learn from these examples?


Source: HolonIQ

The Chinese, Americans and Indians have the advantage of huge internal markets.  At the same time, many of their edtech ventures are focused on capturing that big local opportunity.  However, it seems only to be a matter of time before some of these companies go global.  Whilst lacking their scale, could we Europeans (better) develop the capability to scale across geographies as a competitive advantage in edtech?  What would we need to do to make that happen?

Of course it’s a possibility that K-12 education and edtech markets will remain mainly local.  In which case we as an industry can adjust some of our investment hypotheses accordingly.  Yet I expect growing teacher shortages, pedagogical innovations and technological progress will drive change in our markets. We should organize ourselves to be ready for these changes.


Scaling European Edtech

I recently came across this interesting report from Navitas Ventures – Global Edtech Ecosystems 1.0: Connecting the World of Education Technology.  Navitas analysed 20 cities with leading edtech ecosystems representing about 40% of global edtech.  Beijing, the Bay Area and New York are top of the class, with Boston, London and Shanghai challenging.  They also assessed a further 14 emerging ecosystems at different states of maturity.  It’s clear that edtech is thriving across the globe!

Scale is essential to success in digital and you can see that in edtech too, with the predominance of China and the USA.  In addition, given the demography and emerging status of the edtech ecosystems in India and Sub-Saharan Africa, it’s likely that together these four regions will give birth to a generation of edtech giants.  Edtech could significantly improve the life chances of hundreds of millions of people in these regions by increasing access, participation and engagement in education.  It’s a powerful promise!


Source: HolonIQ

What about Europe?

Europe has some natural advantages in the edtech space.  We are home to many world-class education systems such as Finland. There’s a rich start-up scene in a number of European cities with London leading (but will Brexit make us BETT-sick?). Paris, Stockholm, Berlin, Helsinki and Amsterdam are vibrant and promising too, in fact there are more than 3000 edtech ventures across Europe today. Furthermore, there is significant and reliable spending on education through governments and ready access to venture and growth funding privately.

However, we lack scale

A lack of scale probably results in us under-serving our own customers.  It restricts our ability to expand to international markets. And it potentially exposes us to competitors grown in the big markets.  A lack of scale is restricting our potential.

European Champions

To address this, I think we need to create a European edtech network with strong go-to-market capabilities so we can effectively scale successful concepts across the continent.  I believe this network would be well served if it includes a handful of Champions to acts as magnets to talent, ideas and capital.

Learning organisation

I am interested in your ideas about how we could bring more scale to European edtech and what you think about the idea of building a European network with Champions.  How could we make that happen?  I’m also curious to learn from some of the challenger and emerging edtech ecosystems: how are they approaching this, what’s working and what’s not?  Learning is in our DNA, we need to put those skills to work if we are to bring this potential to life.