EdTech companies in Latin America and the Caribbean are mostly SMEs

Last revision date: 09/02/2024

Technological applications are important and relevant for the education sector. The formation of companies in the educational technology sector, known as EdTech, has experienced a significant increase since 2008, and the dynamism of the sector during the Covid-19 pandemic was really important, as these types of ventures seek to promote education through software, hardware, and educational process innovations. Depending on their purpose, educational technology can take different forms inside and outside the classroom, including educational applications and games, podcasts, learning management systems (LMS), video conferencing software, and online discussion forums, among others. Some examples of EdTech companies are Stride Inc., a U.S.-based company among the largest in the world, which provides online education as an alternative to traditional education for students from kindergarten to sixth grade, as well as professional learning programs. In the region, there are for example Afya from Brazil, which offers digital solutions for the continuous training of doctors, and Blended from Argentina, which facilitates learning and financial management for educational institutions.

According to data from Crunchbase.com, a platform that tracks emerging and technology companies worldwide, there are more than 9,000 companies in the EdTech space. Most of these companies are in the United States with 3007 companies, followed by Asia-Pacific (excluding China) with 2187, and Europe with 1979. Latin America and the Caribbean, with its 645 EdTech companies, represents 7% of the global total. Although this figure seems modest compared to other regions, EdTech in ALC is gaining ground and playing a crucial role in the transformation of the education sector in the region.

EdTech companies, world regions, 2023

(In quantity)

Source: own elaboration based on Crunchbase.

Within Latin America and the Caribbean, Brazil leads the creation of EdTech companies with 404 companies, representing 63% of the total in the region. Mexico ranks second, with 86 companies or 14%, and Chile is in third place with 43 companies, constituting 7% of the total. This concentration highlights the disparity in EdTech development in the region, with Brazil leading the way and other countries following its example.

EdTech companies, Latin America and the Caribbean Countries, 2023

(In quantity)

Source: own elaboration based on Crunchbase.

Globally, the creation of EdTech companies has experienced significant changes in the last decade. According to Crunchbase, between 2008 and 2015, the number of companies founded in the EdTech space increased significantly. It then remained stable between 500 and 600 companies per year until 2019. However, during the COVID-19 pandemic, there was a dramatic increase, with more than 700 companies added in 2020, mainly in the Asia Pacific and Europe. Since then, the number of companies founded has decreased, reaching 200 in 2022 and less than 100 so far in 2023.

In Latin America and the Caribbean, the creation of EdTech companies peaked before the pandemic, with 56 companies founded in 2017 and 55 in 2018. In line with the global trend, there has been a decrease since 2020. Nevertheless, in the last three years, almost 100 companies have been created, suggesting that interest in EdTech persisted after the pandemic.

EdTech companies by foundation date, Latin America and the Caribbean Countries, 2023

(In quantity)

Source: own elaboration based on Crunchbase.

Most of the EdTech companies listed on Crunchbase are small in terms of the number of employees. Approximately 46% of the companies with available data have between 1 and 10 employees, 34% have between 11 and 50 employees, and only 19% have more than 50 employees.

In Latin America and the Caribbean, these companies are also mostly small. 52% of the companies in the region have less than 10 employees, and only 17% have more than 50. This business structure is characteristic of a nascent sector that seeks to innovate and adapt quickly to changing educational needs. This may also be associated with the business models of digital platforms that are less human capital-intensive. As these ventures scale and mature, it is expected that they will increase in size, contributing to job creation in the region.

EdTech companies by number of employees, Latin America and the Caribbean Countries, 2023

(In quantity)

Source: own elaboration based on Crunchbase.

The future of EdTech companies in Latin America and the Caribbean

In conclusion, the EdTech business space is important for entrepreneurial development from both the entrepreneurship and startup perspectives in the region. The impact of EdTech on education must be analyzed in greater detail, and its positive effects will depend on how technologies focus on people with applications aimed at meeting educational needs.

During the COVID-19 pandemic, when global educational norms and methods changed drastically, EdTech emerged more strongly. The prolonged closure of schools deepened the use of educational technologies. Initially, this was perceived as desirable and inevitable for education. However, the changes between 2020 and 2022 revealed that in addition to solving the educational continuity problem and generating an opportunity for coverage expansion to remote locations, it also widened gaps associated with the region's structural inequalities that were already affecting educational opportunities before the pandemic. These gaps were deepened by the possibilities of using digital solutions determined by inequalities in access to technologies and their use based on the digital skills available to the population. There is no doubt that the benefits that EdTech companies can generate, as they facilitate learning, reach rural areas, and improve educational quality, among others, will depend on their ability to build communication bridges with relevant education stakeholders, allowing them to guide the use of technologies in education toward its objectives and not purely as a business.

The integration of digital technologies and other innovations in educational systems can contribute to creating a more equitable distribution of opportunities among disadvantaged groups, as long as it is people-centered. Thus, the EdTech sector represents a significant growth opportunity both in the region and globally,as it continues to play a crucial role in the evolution of education towards a more digital and inclusive future.¹²

¹UNESCO (2023) An ed-tech tragedy? Educational technologies and school closures in the time of COVID-19.

²UNESCO (2023) Global Education Monitoring Report 2023: Technology in education – A tool on whose terms? Paris, UNESCO.