Blog + Private Equity
Blog + Private Equity
Investors continue to put money to work behind efforts to fix K-12 education both inside and outside of schools. There are three principal drivers behind this activity: 1) fixing what COVID-19 mitigation policies broke; 2) improving COVID-19-revealed weaknesses inside public schools; 3) creating solutions to work around the public K-12 school system. All three avenues are likely to be productive avenues going forward regardless of larger macro-economic trends.
COVID-19 mitigation has impacted schools and students in two significant ways. First, it created gaps in educational attainment that require acceleration strategies to help students catch up to grade-level proficiencies. Secondly, the social isolation caused by the pandemic has created a mental health crisis among large numbers of school-aged children that is roiling many public-school systems. Last month saw two meaningful deals aimed at these gaps.
Leveraging technology to improve both student-facing and administrative systems has been a stable long-term theme in ed-tech investing. But the weaknesses revealed in both areas by COVID-19, as well as an ample remaining ESSER (COVID-19) funding, in addition to the presence of recession-proof ESSA funding has reenergized investing in this area of the market.
COVID-19 sparked a new level of parent investment in education outside of the public K-12 system that seems to represent an enduring new dimension of the education landscape. Multiple companies have stepped in to take advantage of this expression by parents to both supplement, and in some cases, supplant the instruction their children are receiving in school. Tyton Partners has documented this trend extensively in our School Disrupted series and Choose to Learn reports. In past weeks, we’ve noted the heightened level of private school formation and consolidation, but last month saw two deals in the related extra-curricular instruction market.
The mandate to rectify damage done by COVID-19, the continued urgency to address issues of equity in public education, and the new energy behind the market for parental spending in education seems likely to keep K-12 investing at a heightened level through 2023.