Why Private Equity Firms Invest in UK EdTech

(Even Though Selling to Schools Is Hard).

A pattern which I have noticed, over the past few years through my work with The Team Lab, is that private equity firms are becoming increasingly interested UK EdTech, at K-12 level as well as at HE level.

Yet, at first glance, this seems counterintuitive.  School budgets are tight, procurement processes are slow and decision‑making is fragmented across senior leadership teams, IT leads and MAT central teams. This is hardly attractive from a sales point of view. However, despite these challenges, UK EdTech has become one of the most attractive investment categories within the education sector. Why is this?

Having been the CEO of a private education company a few years ago, which was PE backed, I know that educational companies in the UK can be stable, scalable and defensible businesses.  That particular company owned and operated 20 schools and colleges. But the same claims can be made for Edtech. Once a school adopts a digital system, whether this relates to safeguarding (e.g. CPOMS) MIS (e.g. iSAMS) or attendance or curriculum content, schools rarely switch their provider.

This is because schools have legitimate concerns about disruption, a fear of a complicated migration process followed by the need for even more staff training. This means that churn in this sector is very low. And for investors, this creates a predictable, recurring revenue which is likely to compound year after year.

The UK education market is also driven by regulation and compliance.

Safeguarding requirements, KCSIE updates, attendance mandates and MAT‑level governance pressures creates built‑in demand for digital tools. When compliance tightens, EdTech adoption rises. Moreover, this regulatory backbone makes the UK education market unusually resilient, even during economic downturns.

Another factor is the ability to scale internationally. I have watched many UK EdTech companies, such as Twinkl, iSAMS and CPOMS, expanding globally, not least into an ever increasing number of international schools. Investors know that, once a product proves itself in the UK’s demanding environment, it can often be scaled abroad with relatively low marginal cost.

Last but not least, the education market in the UK is still very fragmented and this creates opportunities for consolidation. PE firms can acquire complementary platforms, integrate them and therefore build dominant ecosystems.

So yes - selling to schools is really hard. But owning the right EdTech companies can be highly profitable. And so we shouldn't be surprised that private equity keeps coming back.

Contact me, Mark Hanley-Browne, on mhb@the-team-lab.com