OMERS on growth equity’s edtech play

As the education sector learns to embrace tech, Saar Pikar, managing director at OMERS Growth Equity, outlines edtech’s growing investment appeal.

Saar Pikar

OMERS Growth Equity recently led a $66 million funding round in online creative learning platform Skillshare; why was this an attractive target?

Skillshare combines many of the themes we’re focused on and trends we’re seeing as edtech investors: the desire to get educated when, where and how students want versus getting educated face-to-face in a classroom; the demand for bite-size, on-the-go education that leads to quantifiable and verifiable outcomes; the idea that work is life and life is work in the new economy; and the fact that people have to re-skill and up-skill continuously. Skillshare serves the needs of creative professionals and hobbyists, which presents a highly innovative value proposition for the online learning market. It also has a great CEO and team that are deeply engaged and fully ready to build on their current success and drive the company into its next phase.

What opportunities does edtech present to growth capital investors?

Edtech is the single biggest opportunity for investors to get in on the ground floor in a big sector of the economy ($6 trillion worldwide today and $10 trillion by 2030, according to education intelligence platform HolonIQ) that has been largely impervious to technological transformation. The drive to train people for tomorrow’s economy, as well as the increasing complexity of the world, was eroding this resistance to change before covid-19 and even more so now. Educational institutions, teachers and students are forced to adopt online and blended education environments and are looking for solutions to do so in the future. VC investments in edtech touched $8 billion in 2018 and are expected to grow by over 10 percent for the next 10 years and growth equity should follow the same trend.

What are your long-term expectations for the sector?

We expect continued growth in both venture and growth-stage investments as the education sector drops some of its historical resistance to change. You can see that success and change in China and India, which leapfrogged the Western world in terms of connectivity and technology (from nothing to inexpensive, high-speed internet connections and mobile phones) and where we find some of the biggest success stories (the top four edtech unicorns today are based in India and China). Just like in fintech, we can look at these countries to see what we will see here in the near future as it relates to edtech.

How might demand for edtech evolve if or when in-person learning becomes feasible again?

We both over- and underestimate the long-term effects of covid-19 on the education landscape. Some believe students will never go back to school and face-to-face education is over; that is decidedly incorrect and sooner or later life will go back to semi- and eventually fully normal. But there has been a transformation in the way education is and will be delivered in the future – online and blended learning environments are here to stay, and every institution and teacher is now leaning into technology. It is this new environment that will nurture and propel the edtech champions of tomorrow.