The Life Cycle of an Edtech Company: Lessons from 2020 to 2025

Sean Connick | Published: 13th August 2025

The Edtech Boom and Reset: The COVID-19 pandemic sparked a once-in-a-generation surge in education technology. In early 2020, as classrooms and offices closed, digital learning tools went from being “nice to have” to “non-negotiable” almost overnight. Global edtech funding rose sharply to $16 billion in 2020 and peaked at $20.8 billion in 2021, roughly triple pre-pandemic levels.

For companies such as Kahoot! (game-based learning), Duolingo (language learning), BYJU’S (K–12 tutoring and content), Coursera (online higher education) and Nearpod (interactive lessons), the pandemic was both a windfall and a stress test. Demand surged, user numbers exploded, and investors poured in.

But the real story is what happened next: as the emergency period ended, the market recalibrated. This article examines the lifecycle of edtech companies over the past five years, from pandemic-fuelled hypergrowth to post-COVID normalisation, and how some have reinvented themselves to remain relevant in an AI-driven future.

The Pandemic Surge (2020–2021)

During the height of the pandemic, the edtech sector experienced extraordinary growth. Kahoot! saw remote usage increase fivefold, reaching 1.5 billion participants in 2020. Duolingo gained over 30 million new learners in just a few months, driven largely by homebound adults looking for productive hobbies. BYJU’S added millions of paying subscribers in India and internationally after making much of its premium content free during lockdowns. Coursera reported a remarkable 640% increase in enrolments for online professional courses between mid-March and mid-April 2020.

Platforms responded to this unprecedented demand with rapid product expansion. Nearpod introduced more asynchronous lesson formats, Duolingo launched new courses and gamification features, and Kahoot! released “Kahoot! EDU” for schools and “Kahoot! 360” for corporate learning. These enhancements transformed what were once single-purpose tools into multi-use platforms capable of serving classrooms, homes and workplaces.

Flush with venture capital, many edtech firms pursued aggressive acquisition strategies to broaden their capabilities. Kahoot! acquired Drops and Clever, BYJU’S bought WhiteHat Jr and Epic, and Coursera expanded its university partnerships to scale its offering.

Product Subscriptions and the Lifecycle of an Edtech Tool

In the early stages, many companies, including Duolingo, Kahoot! and Nearpod, adopted a freemium model. During the pandemic, premium features were often unlocked for free to accelerate adoption. However, after 2020 the challenge shifted to converting these free users into paying subscribers without diminishing engagement levels.

The industry’s trajectory over this period reflects a clear lifecycle pattern. Before 2020, the introduction stage was characterised by organic growth, viral marketing, and niche adoption. The growth stage, from 2020 to 2021, brought a surge in demand, rapid product diversification, and a multiplication of subscriber bases. Maturity, reached between 2022 and 2023, saw demand stabilise, with companies focusing on retention, upselling, and securing enterprise contracts. Renewal and extension, from 2023 to 2025, have been driven by AI integration, expansion into new markets, and ongoing product refreshes designed to reignite growth.

In education, subscription churn can be particularly severe. Schools and companies often cut tools once the novelty fades or budgets tighten. To remain viable beyond maturity, edtech companies must continually update their value proposition, integrate more deeply with core systems, and demonstrate measurable learning outcomes.

The Great Normalisation and Market Correction (2022–2023)

The sharp post-pandemic normalisation represented a turning point for the sector. After the record-breaking $20.8 billion in global edtech investment in 2021, funding fell to $10.6 billion in 2022 and just $2.97 billion in 2023, an 86% drop. This decline had a major impact on company valuations. BYJU’S, once valued at $22 billion, has faced repeated valuation cuts and is now under significant financial and regulatory pressure. Kahoot!, whose stock price soared during lockdowns, lost a substantial portion of its market value before agreeing to a $1.7 billion take-private deal in 2023. Coursera, which went public in 2021, saw its share price fall as user growth returned to more sustainable levels.

With reduced access to capital, many edtech companies resorted to large-scale redundancies and cost-cutting measures. BYJU’S let go of thousands of employees globally, Chegg announced job losses as it restructured for AI-driven learning, and numerous smaller start-ups were either acquired at a fraction of their pandemic valuations or closed entirely.

In parallel, some firms scaled back international expansions or discontinued experimental products launched during the boom years, especially those that strayed too far from their core business. Investor priorities also shifted, moving from aggressive user acquisition to an emphasis on revenue stability, customer retention, and defensible niche markets. Platforms unable to demonstrate long-term engagement and measurable results began struggling to renew contracts or secure new institutional deals.

The normalisation also widened the divide between resilient, diversified platforms such as Duolingo, which has maintained profitability while growing its user base, and those whose success during the pandemic was heavily reliant on emergency remote learning demand.

Innovation in a Hybrid World

Despite the cooling of investment, the hybrid learning model has endured. Kahoot! introduced asynchronous gameplay and enhanced analytics tools for teachers, Duolingo launched “Duolingo Max” using generative AI to simulate conversations, Coursera expanded its professional certificates through partnerships with Google and IBM, and Nearpod improved its live/remote switching functionality to make lessons flow seamlessly between classroom and home.

Localisation also emerged as a strategic priority. BYJU’S entered Middle Eastern markets with Arabic-language content, Duolingo introduced more localised courses for emerging markets, and Kahoot! expanded its language options to reach non-English-speaking audiences more effectively.

The AI Era (2023–2025)

The integration of generative AI has become a key driver of product renewal. Kahoot! launched an AI-powered quiz generator, Duolingo rolled out “Roleplay” and “Explain My Answer” features, and BYJU’S piloted personalised AI tutors. These advancements have allowed faster content creation, more adaptive feedback, and increased personalisation, helping platforms sustain user engagement and justify subscription renewals.

At the same time, budget-conscious institutions are demanding stronger evidence of impact. Coursera now offers detailed learner analytics dashboards, Duolingo has invested in efficacy research, and Kahoot! has conducted studies on learning outcomes. This emphasis on data and results signals a broader shift towards evidence-based selling in the sector.

Strategic Agility and the Road Ahead

Ownership structures and market positions have also evolved. Kahoot! went private in 2023 in a $1.7 billion deal led by Goldman Sachs, allowing it to operate away from public market pressures. Nearpod, acquired by Renaissance Learning in 2021, is being integrated into a broader K–12 education ecosystem. BYJU’S has sold off non-core assets to stabilise its finances.

Companies that appear best positioned for the future share several traits. They diversify across audience segments and geographic regions, establish clear and sustainable revenue models, particularly in the enterprise and institutional sectors, and maintain a cycle of continuous product renewal through AI, content partnerships, and system integrations.

Conclusion

From the explosive growth of 2020 to the sobering correction of 2023, the past five years have tested the resilience of the edtech sector. The companies that remain strong, including Kahoot!, Duolingo, Coursera and others, have adapted their business models, refreshed their product offerings, and aligned with changing educational demands.

The key lesson for the next generation of edtech leaders is that the lifecycle does not end at maturity. The winners in 2025 and beyond will be those who view product renewal and strategic agility not as emergency measures, but as ongoing disciplines.

Why Applying to the Digital Education Awards Matters

The Digital Education Awards celebrate the qualities essential for long-term success in today’s edtech landscape: innovation, measurable impact, and adaptability during rapid change. For companies transitioning from pandemic-driven hypergrowth to sustainable, evidence-based operations, this recognition represents more than an award, it is an endorsement of credibility on a global stage.

Securing a win or even being shortlisted can signal trust to schools, universities and enterprise clients evaluating competitive solutions. It can also motivate internal teams by validating the creativity, resilience, and sustained effort that have kept the company relevant during challenging periods. Furthermore, it can attract new investment and partnership opportunities by demonstrating respected industry recognition and a clear competitive advantage.

In a market where buyer caution and intense competition prevail, the Digital Education Awards offer a platform to showcase not only an effective product, but also a proven capacity to evolve in step with, and often ahead of, the sector itself.

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Think you’ve got what it takes to win? Enter now for a chance to showcase your product, gain industry recognition.

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