附近上门

In a year when IPO deal volumes are hitting record highs, edtech is in the spotlight — particularly this past week.

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This week saw language-learning platform , along with K-12 edtech company go public, following edtech software company 鈥檚 IPO last week. Chinese online tutoring platform also had an IPO last month while 鈥檚 public debut was back in March. In other words, it鈥檚 been a banner year for U.S.-based edtech companies to go public, after China-based edtech companies have dominated the U.S. IPO market in recent years.听

鈥淢any of these companies enjoyed extraordinary growth in 2020 and now they’re looking to raise money based off those grade A results to fuel growth,鈥� said , a senior strategist at IPO research firm .

Duolingo went public Wednesday, raising $521 million through its IPO and closing out its first day of trading up 36 percent. Its first-day closing price of $139.01 per share gave the Pittsburgh-based company a valuation of around $5 billion. The company had raised at least $183 million in funding as a private company and its IPO marks a significant milestone for Pittsburgh鈥檚 startup scene.听

鈥淚 think the underlying business drivers in a lot of these businesses have been really strong for a long time, and we’ve seen several of these businesses reach scale, where it makes sense for them to be public companies,鈥� said a general partner at and an investor in Duolingo.

Edtech companies going public isn鈥檛 new — went public in 2004 and companies like , 听补苍诲 have gone public in the past decade, and is another edtech company rumored to be eyeing an IPO this year. But in recent years, many of the edtech companies to go public in the United States have been companies based in China, where online education and distance learning has been popular for some time.听

The COVID-19 pandemic has boosted the profile — and growth — of edtech companies, as schools have turned to distance learning and people stuck at home have turned to online learning tools to fill their time. Venture-backed companies in the edtech and education sectors have raised more than $9.5 billion so far this year after raising more than $12.4 billion last year, according to 附近上门 data.听

鈥淚 think this is a long-term trend in distance learning,鈥� Kennedy said. 鈥淭he growth in 2020 is going to be hard to repeat, but it may have accelerated that long-term trend by a few years. I don鈥檛 think it鈥檚 just going to go away, which is a risk with a company like Duolingo. They may have had their best year, and it鈥檒l be hard to replicate that growth, as with many companies that saw pandemic-related tailwinds. We just don鈥檛 know how that鈥檚 going to shake out.鈥�

The high valuations of edtech companies especially leave little room for error when it comes to performance, according to , founder of , which offers financial services related to new listings.听

鈥淭he margin for error if you don鈥檛 meet or beat those numbers, for Duolingo for example, it鈥檚 very narrow,鈥� Schuster said. 鈥淚f they do miss them, you see significant downside.鈥�

The pressure from the Chinese government on Chinese edtech companies that have gone public in the United States could throw their stock prices for a loop, he noted. He pointed to ridesharing giant 鈥檚 poor post-IPO performance after the Chinese government began investigating the company and blocked it from adding more users. Didi is reportedly now considering going private, .听

Over the weekend, Chinese regulators banned tutoring companies from being for-profit entities, which brought down share prices of Chinese edtech companies. That could cause a slowdown in Chinese edtech companies going public in the future, whereas for U.S-based edtech companies it seems to be picking up, Kennedy said.

鈥淚 think the pipeline for IPOs, technology IPOs across tech and other categories, is really robust,鈥� Sturdy said. 鈥淪o I think we will continue to see a lot of companies go public. It鈥檚 a really great time to raise capital and a lot of these businesses are at a scale that they weren鈥檛 at before.鈥�

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