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Code Acts in Education: The Power of Edtech Investors in Education

Venture capital investors are increasingly powerful in education, with the wealth and resources to shape schooling and universities in the future. Edtech has become a major presence in education over the last decade or so, promoted through ideals of transforming pedagogy, curriculum, assessment and management processes. And it is edtech investors that, to a significant degree, have supported the edtech industry’s expansion. Research on edtech investors is scarce, but understanding how they operate, and the ideas they promote, is important as they are influential in shaping how technological developments like artificial intelligence may be financed, integrated into edtech products and marketed to schools in months and years to come.

In the last couple of years, colleagues and I have been working on a series of case studies of edtech investment organizations, and this post offers a brief summary of observations from four publications: two pieces by Janja Komljenovic and myself, and two others by Janja and me with Rebecca Eynon and Huw Davies. Together, these pieces make a case for detailed analysis of edtech investors as powerful and influential organizations in education, with operations that expand beyond the simple financial allocation of funds for edtech startup companies.

In our most recent collaborative article analyzing two US-based edtech investors, “When public policy ‘fails’ and venture capital ‘saves’ education”, we argued that edtech investors are not only economic actors injecting capital into startups, but political actors making consequential decisions about the future of education. In a previous short open access chapter investigating “the financial power brokers behind edtech”, we highlighted how investors’ investment decisions ultimately determine what products and services are funded into existence or not, and are therefore consequential in shaping edtech markets. And in two pieces examining a UK-based edtech investor, Janja and I looked at the ways investors are—as our titles indicated—both “capitalising the future of higher education” and “investing in imagined digital futures” through a variety of techno-financial methods and techniques.

All these pieces take their cue from sociological analyses of markets and economics. Such studies insist on close empirical investigation of how economic and market activities and practices, such as those of investors, are performed, and what specific devices and techniques are involved. We therefore treat edtech investors as particular kinds of “capitalization professionals” that work in distinctive contexts and relations with others by deploying a variety of “techno-economic” instruments and social and financial practices. Approaching edtech investors in this way reveals the range of ways and means by which they are intervening in education and its possible futures.

Investing in scale

Most obviously, edtech investors inject capital into companies. There are many kinds of investors, including private equity and SPACs, but venture capital investors are crucial because they make high-risk investments in startups. Some of the biggest and most highly-valued edtech companies today, like Coursera, Byju’s, ClassDojo and 2U, owe their existence to exuberant venture capital support in their early startup days.

But what does it take for an edtech VC firm to invest in an edtech startup? In our work we have seen how edtech investors actually shape the edtech industry by influencing startups’ business models and priorities. Investors, of course, make decisions on the basis of calculations or valuations of future return on investment. Their funding decisions are contingent on business models and valuations signalling promising growth and revenue potential. That means VCs often prioritize models such as “platforms” with high “network effects” potential and prospects to “scale up” to vast user numbers.

An example of highly scalable edtech is the idea of “weapons of mass instruction”: “rapidly scaling education technology companies, reaching tens of millions of learners at warp speed due to the mass availability of mobile devices and internet access”. Scalable edtech can achieve rapid growth leading to “big paydays”, such as when an investee undergoes a high-value initial public offering (IPO) or trade sale, thus securing a big ROI for the investment fund, the founders and their partners.

For investors, then, it is imperative that startups’ business models demonstrate potential scalability, as ROI is most likely when income can be secured from very large numbers of users subscribing to a platform. And the active role in investees’ operations doesn’t stop once funds have been allocated, as edtech investors often take up formal roles on startup boards, and  support their portfolio companies to grow and scale post investment too. These are relationships founded on valuation practices designed to discern signals of future earnings from uncertain futures.

Making relations

Edtech investors network. To be successful, they have to build a lot of relations. They have to acquire their own funding from limited partners—the huge wealth funds and individuals who input into an investment fund with their own ROI interests. They also construct networks with organizations and individuals from across the finance, technology, philanthropy, government and education sectors. Job roles such as “network chair” and “head of platform”, as well as discursive references to “community” , signify investors’ painstaking work to connect and coordinate various sectoral actors towards shared aims for educational change.

These relationship-making activities span from dinner parties and drinks with select groups to massive industry summits where tech gurus, celebrities, big tech corporations and politicians come together with eager startups to celebrate the power of edtech investing to solve the greatest challenges of education.

Edtech investors therefore do a lot of lubricating relations. They speak on each others’ platforms, they lay on parties, they make sure their channels are open to journalists, and they communicate publicly through platforms like MediumSubstack or via other organizations to share their messages with wider networks of interested parties. These are not secondary activities to the main business of raising and allocating funds, but constitute the complex and laborious everyday work of edtech investing.

Pedagogic advice

Besides funding edtech startups to solve or transform education, investors develop pedagogic guidance programs for edtech startups too. They are not just sources of finance, but industry teachers who offer advice and lessons for startups to achieve scale and high valuations. Programs like “Product-Market Fit Academy”, blog posts, instructional videos, and other online training courses represent a venture capital pedagogy and curriculum that is designed to hustle the edtech startup scene into alignment with investor priorities.

These pedagogic interventions in the startup sector provide business advice, but also discursive framing of the problems and opportunities to be pursued. For many edtech investors, current institutions of education cannot cope with contemporary social and technological trends; they are too slow to change; stuck in outdated models of transmissive pedagogy; and are “failing” to offer the kinds of learning and training that digital learners demand. Startups are exhorted to address these problems if they are find product-market fit,

Edtech VC firms also test startups’ ability to meet their requirements. They assess startups using various metrics. They also run competitions and awards to “amplify, highlight, and support the most innovative and impactful startups”, with startups rated using market criteria like the “5Ps” of “People, Product, Potential, Predictability, and Purpose”. In other words, edtech investors teach and test startups on how to perform in the market and assess their capacity to secure valuable ROI.

Futuring practice

For edtech investors, the future is an economic opportunity—but only if the future turns out how they imagine it could or should be. That means edtech investors do a lot of laborious work to construct future expectations about education, and the economic returns available, and to produce conviction in others that these expectations are desirable and attainable. What we call “investor futuring” involves both the discursive construction of narratives of future change, and calculations of future cashflows made with the use of techno-economic instruments.  

Investors’ futuring techniques make it possible for them to make claims such as: “We believe there is a digital revolution rapidly unfolding in education … . This revolution is creating a historic opportunity to invest in companies that are disrupting and improving the over $6 trillion global education market”. They lay claim to expertise and authority on the “megatrends” in society and technology that “create tailwinds for investment”. These megatrends are accompanied by mega-numbers and graphical visualizations that appear to support their expectations, such as the $6 trillion dollar market opportunity, and manifestoes to address the “$8.5 trillion dollar skills gap”.

Edtech investors therefore render the future legible in discourses, infographics and market valuations. These are painstaking accomplishments that involve imaginative scenario production, data analysis and visualization, and narrative storytelling to convince others that their vision of the future, and the rewards it promises, are just over the horizon.   

Social impact scoring

Edtech investors are very keen to communicate their social conscience, responsibility, and impact. Their desire is not only to support highly scalable platforms, but to achieve scalable social impact, as evident in how they position themselves as empowering startups to increase diversity, equity, and inclusion, and democratise access to learning.

This framing of their actions in terms of social impact is captured, for example, in the idea of “Return on Education”, or low-cost mission-driven edtech. It is not accidental that ROE resonates with ROI: “RoE is a key part of our investment thesis and is directly correlated to ROI; the higher the RoE, the better the investment outcome”.

Socially responsible impact through democratized access to edtech at massive scale in low-income contexts is therefore an opportunity for maximizing economic return. As one edtech investment partner puts it, “if you’re serving the 1%, you’re by definition serving a much more limited market”. Scalable edtech platforms are thus positioned as responsible technologies, with investors as virtuous and moral actors undertaking the socially responsible task of allocating capital to good causes. They are “investing for good” as well as for economic gain.

Edtech investors as political actors

As we wrote in the conclusion of our most recent paper, edtech investors require further research attention because they are responsible for reshaping education by structuring the edtech industry. Edtech VC investors are becoming political as well as economic actors in the education sector through a variety of practices and techniques.

Edtech investors imagine particular futures of education, and seek to materialise them through investment in selected startup companies and products. They structure the edtech industry not only by providing capital but also through pedagogic advice and curricula intended to engineer product-market fit. Edtech investors also position themselves as expert and moral actors through narratives of social good and associated evaluative tools, and they engage in the political work of constructing network relations to produce broader consensus and conviction in their visions of the future of education.

The imaginative and investment practices of edtech VC by no means determine educational futures. However, edtech investors are catalysing action in the present towards the realisation of a selected future that appears to offer the best prospects for long-term cash flows. There is a significant need for more research to attend to these increasingly powerful actors in education, and we hope our initial case study examples and analyses catalyse further research into their social and political practices, their narratives and discourses, and their techno-economic instruments and metrics of valuation and market-making.


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Ben Williamson

Ben Williamson is a Chancellor’s Fellow at the Centre for Research in Digital Education and the Edinburgh Futures Institute at the University of Edinburgh. His&nb...