May Edition of the X Report
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In this month's X Report, Google Cloud discusses how AI and Analytics can provide solutions for EdTech companies, and we look at the Nordic EdTech markets with a spotlight on Finland’s unique approach to EdTech product development. Each month, we will share a snapshot of key trends, showcase the stars of today and tomorrow, provide some food for thought as well as mergers, acquisitions and fundraising.

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How can EdTechs transform education with AI and Analytics?
Jesus Gomez, Google Cloud

Over the last year, COVID-19 brought on unforeseen challenges for practically every type of business and organization—including schools, colleges, and universities. For educational institutions, the pandemic was an unapologetic agent of acceleration, shifting one billion learners from in-person to online learning within two months. 

The rapid transition to online learning exposed many organizations’ lack of readiness for the new online learning environment. It also widened the learning equity gap for students, with fewer than 40% of students from low-income families having access to the tools required for remote learning.

For those who do have online access, today’s students expect everything from engaging and collaborative digital learning experiences to skills-based training for their roles in the future workforce. Expectations are also high for 24x7 multi-channel tech support across all learning devices, applications, and platforms.  

In these remarkable times, education technology companies have an important role to play in supporting academic institutions and students. Indeed, this is already happening, as the EdTech (Educational Technology) market is nearly tripling, with total global expenditures expected to reach $404 billion by 2025. However, the success of these EdTech companies depends on their performance in a number of areas, including:

  • Content and products: How quickly can they generate new content and bring new products to additional markets for broader adoption?
  • Personalization: How effectively can they leverage artificial intelligence (AI) to provide a personalized experience to all types of learners?
  • Trust and security: How trusted and secure are their services when educational organizations are suffering the highest number of data breaches since 2005?

Here are a few examples of how EdTech companies are successfully using AI and analytics to capture this opportunity and transform their businesses:

  • Build better products: iSchoolConnect is an online platform that lets students explore schools, courses, and countries where they might study, and makes higher education admissions accessible to students around the globe. The company leverages AI services to help educational institutions optimize their academic operations by accelerating admission processing by greater than 90%, while saving significant costs.
  • Launch in new markets faster: Classroom creativity tools provider Book Creator uses AI APIs to enhance accessibility and improve the learner experience. “The broad suite of intelligent APIs enables us to deliver richer experiences, faster and more easily, without having to be experts in machine learning, drawing recognition, map embeds, or other areas,” says VP of engineering Thom Leggett.
  • Scale businesses securely: Using DevOps and CDN [content delivery network] services, Chrome browser recording extension creator Screencastify was able to support eight times growth in users overnight amid the COVID-19 pandemic, while maintaining consistent total cost of ownership. These technologies helped the company rapidly scale operations in response to the overnight demand from consumers and assure student data privacy and security on a budget. “We know this is just the beginning, as more educators rely on technology to deliver richer, more interactive curricula to students,” says CEO James Francis. 
  • Provide personalized learning and support: Smart analytics and AI can provide personalized support and recommendations for students, forecast demand, and predict shifts in learners’ preferences. Online learning platform Mindvalley uses cloud-based tools to understand and make decisions based on user activity and leverage machine learning to predict behavior. 

Google Cloud is partnering with many of these leading EdTech companies, as well as industry-leading consortiums like Ed-Fi and Unizin, to standardize educational common data models and best practices for more agile and cost-effective integration of EdTech into existing environments.

The education landscape is changing rapidly, and EdTech has a major role to play as institutions adapt to the massive shift in learners’ preferences and expectations. We’re committed to empowering EdTech companies with the tools and services they need to help expand learning for everyone, anywhere.

Watch our Spotlight session with EdTechX to learn more. 

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Spotlight: Finland’s Education System and their Unique Approach to EdTech Product Development 

In the years following the Second World War, Finland found itself facing great challenges. A growing population and stronger economy resulted in an increasing number of parents looking to provide their children with a high-quality education. As enrolments surged, clear inequalities in access to education and attainment emerged. These problems led to the need for wide-ranging reforms to the Finnish education system.  

Having taken these reforms seriously since the 1970’s, the Finnish education system is now widely regarded as one of the best in the world. Not only do Finnish students place highly in PISA (OECD’s Programme for International Student Assessment) rankings, they also rank highly in terms of life satisfaction. A range of considered and simple changes have transformed their education system, which now outranks the likes of the United States and the UK.

In Finland, educational autonomy is high at all levels.While the basic functions required of schools are determined by law, schools enjoy a great deal of autonomy in determining their own administrative arrangements and vision. This autonomy extends to the teaching staff too. With no standardised testing in Finland, teachers are expected to decide on their own teaching methods and resources as well as devise their own grading system. These expectations mean that all upper education teachers are required to have a high level of training and hold a Master’s degree. 

It comes as no surprise, then, that Finland’s progressive approach to education is also making the country one of the best locations for EdTech in Europe by virtue of their deliberate steps to address the difficulties experienced in the development of EdTech products. 

A challenge facing EdTech is that, in the development of new products, much of the focus falls on the ‘Tech’ side of things and less on the ‘Ed’ side, meaning many of the products developed do not meet the needs of teachers, students, and schools.  

To address this issue, 6Aika, a coalition between the six largest Finnish cities, launched ‘The Smart Learning Environment of the Future’ project1. Funded by the European Regional Development Fund, the project offered companies the chance to develop their products in collaboration with their users (i.e pupils, students, and teachers) to address the daily challenges faced in schools. For example, one such product co-created by the Helsinki City Museum and Exove Design, was an augmented reality game that brought to life a scale model of Helsinki from 1878, livening up the historic exhibition housed in the museum.  

As evidenced by their commitment to education reform since the 1970’s and their conscious move to develop EdTech products that meet the needs of users, Finland is clearly a country with a forward-thinking approach to education. Their unique approach of developing and testing EdTech products alongside highly qualified teachers has created a burgeoning EdTech ecosystem that is bound to start seeing its products exported on a global scale.  

1 More information on the results of the project can be found here

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The Nordics have a unique approach to education. Their education systems rank highly globally, and have become somewhat of an ideal model for the rest of the world to follow. A focus on collaboration and enjoyment in learning has shifted attention away from competing for top marks, and rather focused it on achieving holistic learning outcomes. Another key reason why their education systems are so highly regarded is their openness towards adopting technology in their classrooms. As some of the most connected countries in the world, the Nordics have a strong digital infrastructure in place and EdTech investment has been steadily increasing in recent years, making the region one of the highest recipients of EdTech investment in Europe.

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In 2020, EdTech investment in the region increased to €227m, a 160% increase on the €87m invested in 2019 and despite having only just entered the second quarter of 2021, the €96m invested so far this year already exceeds the total invested in three of the last five years. Denmark and Norway have emerged as the countries leading the way in terms of investment value. In each of the last three years, these two nations together have accounted for at least three quarters of total investment.

Denmark’s Kahoot! received the single largest investment in 2020. The company, which operates a game-based learning platform that helps create, share and play learning games, received an investment of $215m from SoftBank in exchange for 9.69% stake in the company, with the proceeds being used to finance non-organic opportunities and continued development.

Virtual reality in an educational context has also proven to be a popular area for investment in the Nordics. This year, Denmark’s Labster, which designs and develops interactive lab simulations that allow students to engage with life science, biology and biotechnology experiments, received $60m in its Series C round of funding led by new investor Andreessen Horowitz. The funding round brought Labster’s total funding received to date to $100m. Norway’s Attensi is another virtual reality startup that has received significant investment. The company develops gamified 3D simulations that help employees to virtually practice procedures and interact with customers, and received $25m in a late stage VC funding round in March this year. The funding was raised at a post-money valuation of approximately $120m, and the proceeds from the raise will be used to extend the company’s North American and European presence.

M&A activity in the Nordics is also showing signs of recovery following 2020’s pandemic-induced slowdown in dealmaking. A total of 6 deals have been concluded year-to-date, close to overtaking the 7 deals completed in 2020. Kahoot! has been particularly active in 2021 in line with their growth strategy following SoftBank’s investment last year. In April, the company acquired software-as-a-service based employee engagement and learning platform Motimate from Investior for an enterprise value of approximately $27m which will be settled with a combination of cash and Kahoot! shares. In addition to the acquisition of Motimate, Kahoot! also acquired which develops an online whiteboard tool to help teachers to engage with students during remote teaching in February this year.

The Nordic’s approach to education, technology and the combining of the two has allowed for the creation of an exciting space for EdTech. With increasing fundraising value and decreasing deal volume, the region is all set to move into the next phase of its lifecycle. With the likes of Kahoot!, Kognity and Labster in its arsenal, the Nordics could soon be ready to rival the likes of the US, China and the UK on the global EdTech front.

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