Why Are There No Large Market Cap Companies Globally in Edtech? (substack.com)
(Wednesday December 24, 2025 @05:40PM (msmash)
from the closer-look dept.)
Goldman Sachs, in a note this week, [1]via India Dispatch :
> There are various reasons that explains this: (i) A large part of the global education spend goes towards formal education (schools, colleges and universities), which are typically either run by governments or are not-for-profit institutions;
>
> (ii) It is difficult to replicate education quality at scale in our view, since most teachers would have a different pedagogy, and thus standardization is harder to achieve vs that in other internet categories;
>
> (iii) Education is fragmented - it includes various fields (schools, undergrad courses, medicine, engg, management, etc.), each with their own curriculum, and the same being vastly different across countries globally; this makes scalability difficult beyond a few certain specializations and regions.
>
> Additionally, we believe the ability for online education to capture a sizable value share of supplemental education is limited since the perceived value of offline, including that from community, in-person engagement and doubt solving, rigour, etc., is typically higher.
>
> However, we note that before China's double reduction policy in 2021, TAL and EDU had market caps of up to US$50 bn; these companies were mostly domestic focused and on the K-12 tutoring segment, which has large volumes. Similarly in India, Byju's reached a peak valuation of US$20 bn+ (link; again, focused on K-12), before issues around governance etc. impacted the business.
[1] https://substack.com/@refsrc/note/c-191201948
> There are various reasons that explains this: (i) A large part of the global education spend goes towards formal education (schools, colleges and universities), which are typically either run by governments or are not-for-profit institutions;
>
> (ii) It is difficult to replicate education quality at scale in our view, since most teachers would have a different pedagogy, and thus standardization is harder to achieve vs that in other internet categories;
>
> (iii) Education is fragmented - it includes various fields (schools, undergrad courses, medicine, engg, management, etc.), each with their own curriculum, and the same being vastly different across countries globally; this makes scalability difficult beyond a few certain specializations and regions.
>
> Additionally, we believe the ability for online education to capture a sizable value share of supplemental education is limited since the perceived value of offline, including that from community, in-person engagement and doubt solving, rigour, etc., is typically higher.
>
> However, we note that before China's double reduction policy in 2021, TAL and EDU had market caps of up to US$50 bn; these companies were mostly domestic focused and on the K-12 tutoring segment, which has large volumes. Similarly in India, Byju's reached a peak valuation of US$20 bn+ (link; again, focused on K-12), before issues around governance etc. impacted the business.
[1] https://substack.com/@refsrc/note/c-191201948