Like tech stocks in general, edtech has taken a nosedive over the past six months or so. There have been stunning valuation declines, with brand name failures like Roblox—once acclaimed as the “future of education”—seeing half its stock value vanish in the past year and with investors predicting more tough times ahead for the company’s shareholders.
The news might lead you to think edtech’s future is marked by doom and gloom.
Responding to some of EdSurge’s coverage in the Biz newsletter, Atin Batra, founder and general partner at 27V, an early investor in companies like free robux generator for roblox the livestream tutoring platform Fiveable, wanted to offer an alternative perspective. He reached out and agreed to answer some questions over a phone call and email. As he sees it, the valuation declines aren’t an ill-omen for the sector.
To Batra, the lesson of the pandemic was too optimistic to be darkened by the end of the “pandemic bump.” It showed the industry, Batra says, that consumers have become agreeable to purchasing edtech. And with universities and schools being given extra funds by the federal government, they’ll likely invest in more edtech resources, he says.
EdSurge: You responded to a Biz newsletter covering the stark valuation declines in edtech by saying that you don’t think edtech will take as big a hit as it seems. Why is the doom and gloom attached to the valuation declines overhyped?
Atin Batra: Let me start by saying that the current public market meltdown has affected all industries, including education. Companies are down an average 30-50 percent from their 52-week highs. However, the cliche of “public markets are not the economy” holds just as true today as it did in the heady days of the 2020 V-shaped recovery, only in reverse this time around. While it may seem like the world is crashing around us, I see huge opportunities ahead.
There are two main reasons for optimism in the education technology sector specifically: the sustainability and evolution of business models and an abundance of talent.