TLDR: EdTech funding decline takes centerstage at Mastercard Foundation conference
Key Points:
- Only 1.4% of Africa’s VC funding in 2023 went to EdTech startups.
- Investors are writing fewer checks for EdTech startups due to inflated valuations.
A panel at the Mastercard Foundation’s EdTech Conference in Abuja discussed the challenges and opportunities in African EdTech funding. The funding gap in the sector has been attributed to a decline in VC funding for EdTech startups, with no mega-deals like those seen in 2021. The lack of exits and smaller deal sizes have left founders struggling to secure funding.
Despite having over 200 startups, Africa’s EdTech sector is still in its early stages, facing challenges like low internet speeds, high data costs, and low smartphone penetration. The need for patient capital and sustainable business models has become crucial for the growth of EdTech startups.
The Mastercard Foundation is providing equity-free funding to support growth stage startups in Africa, with a focus on sustainable business models. The consensus among panelists is that foundations, family offices, and grants will play a key role in bridging the funding gap and unlocking the full potential of EdTech in Africa.
