What Investors Look for in an EdTech Investment

The Melbourne EdTech Summit brought together leaders from Australia’s EdTech ecosystem and hand-picked global innovators to explore the education innovation agenda. HolonIQ Co-Founder and Co-CEO Patrick Brothers facilitated a conversation between three Australian EdTech investors: Cheyne Tan, Operating Partner at Potentia; Karen Bohm, Founding Partner at Pangea Impact Investments; and Srdjan Dangubic, Partner at Five V Capital. 

They explored what investors look for in an EdTech investment, drawing on their own experiences and their approach to investing in EdTech companies. This session can provide some guidance for EdTechs to reflect on their team, product and marketing strategies and how these factors impact potential investment.


Key points

  • Melbourne EdTech Summit session overview
  • What’s attractive about EdTech investment
  • Evaluating a new EdTech investment
  • EdTech potential?
  • How EdTech has changed in the last 5-10 years
  • Advice to EdTech companies

Patrick Brothers, Co-CEO of HolonIQ

Patrick Co-Founded HolonIQ, a global market intelligence platform for education. He is a member at the World Economic Forum & B20 Education & Employment Task Force and is passionate about transforming the way the world learns. 

Cheyne Tan, Operating Partner at Potentia 

Cheyne is Operating Partner at Potenia, he’s an edtech founder turned specialist private equity investor for software and tech-enabled businesses. Cheyne is a past MD, Global Voucher Group, past Director of Investments and Strategy, GoCo.

Karen Bohm, Founding Partner at Pangea Impact Investors

As Founder Partner at Pangaea Impact Investors, Karen has focused on supporting social entrepreneurs tackling society’s toughest social problems. Pangaea provides investment and strategic expertise to businesses focussed on improving educational access and outcomes for disadvantaged groups.

Srdjan Dangubic, Partner at Five V Capital

Srdjan is a Partner at Five V Capital whose experience spans corporate advisory and investments. Srdjan has led numerous transactions including the acquisition of Education Perfect, one of the largest and fastest growing online education platforms in Australasia.



What’s attractive about EdTech investment?

When observing the education and other social impact sectors, it’s a huge opportunity to make a difference. As an investor, there’s a satisfaction in knowing you could impact millions of students. 

If an investor is considering the EdTech sector, it would be a misnomer to focus purely on commercial outcomes. If it’s a great business model and it’s scale and impact is growing, then it should all marry up. 

It’s an exciting time to be in the sector as there’s been increased interest globally. While this has been overwhelming for companies big and small, it has opened up tremendous opportunities for young businesses. 

How do you evaluate a new EdTech investment?

While each speaker had some differences in the way they considered investments, there were some commonalities. Investors like to see that the company is solving solutions domestically first. Having global aspirations is important, but they need to display the proof in an Australian setting.

The team matters, too. An EdTech company might have the best business ideas, but if the investors don’t feel they can work well as partners with the founder then it is a no-go. As that relationship could last 5, 6 years or longer, it’s necessary to consider the longevity and nature of that partnership. 

When we look at an investment, it has to pass our impact hypothesis: do we think that there is a problem that is going to be solved and solved at scale? And is that why the founders are really chasing this solution?” – Karen Bohm

What part of EdTech is showing great potential?

Resoundingly, the professional and corporate education space has real commercial interest.  Particularly, unaccredited education. Careers are more dynamic. There’s an increased need to upskill throughout one’s career, as it’s clear that education is a lifelong endeavour.

Rather than making an employee redundant, this space gives people the opportunity to maximise their strengths and gain skills in other areas. More and more, there’s a link between Human Resources, education and technology that is becoming more evident.

How has EdTech changed in the last 5-10 years?

Before, EdTech solutions were viewed more as a replacement for the teacher. As has become apparent to parents around the world, the pivotal and critical role of the teacher is irreplaceable in a child’s education. 

Now, it is more about helping a teacher become more efficient and impactful. Whether it’s supplementary material or a solution that manages more administrative tasks, EdTech solutions have changed. 

Especially in the last year with remote learning, some of the traditional value propositions of a university have come into question. When part of the package was to be in the physical classroom and receive more face-time with instructors, this is now changing with the hybrid or fully-online model.

What is your advice to EdTech companies?

In order to gain investment, it’s increasingly important to quantify the impact of an EdTech’s solution. Evidence of impact still holds centre stage in scaling up both domestically and internationally. 

Clarity is also key. EdTechs need to make it really clear about what they’re trying to achieve and solve, as well as what their intended journey is. When EdTechs are able to articulate this in a way that resonates, it makes it easier to attract capital

Go to 00:47:56 to watch the session.

Thank you to the speakers for sharing their invaluable insights with the EduGrowth audience—it helps make a somewhat challenging process a little bit more understandable. 

The Melbourne EdTech Summit was made possible through our partners Global Victoria, Practera, and AWS EdStart. This conference took place 8-10 September 2020.