2.1. Policy and funding for EdTech providers

2.1.5 Growing structures to enable EU-based private investment 

Summary of suggested actions

Establish EU-backed platforms or investor networks to connect EdTech startups with specialised institutional investors, support cross-border co-investment, and strengthen collaboration with organisations such as the European Institute of Innovation and Technology (EIT).

Description

Access to private investment remains one of the most significant bottlenecks for the growth of the European EdTech sector. While the United Kingdom continues to dominate EdTech venture funding, many continental European ecosystems still rely heavily on public or grant-based support (Havinga & Clary, 2024). The imbalance is driven by fragmented investment markets, limited sector-specific knowledge among investors, and a lack of EU-wide mechanisms that bridge early-stage innovation with long-term scaling finance.
For instance, the Dutch government’s National Growth Fund has been instrumental in supporting EdTech and upskilling initiatives through strategic co-investment in workforce transformation. Conversely, in France, the absence of equivalent funding structures has constrained the scalability of EdTech startups, creating what has been described as a “glass ceiling” to growth due to insufficient private follow-on investment.
Strengthening EU-level investment structures would help close this gap. This could include the creation of EU-backed investor networks and thematic investment platforms that focus specifically on digital education, supported by co-funding from InvestEU, European Investment Fund (EIF), and EIT Digital. These structures should prioritise impact-oriented investment, ensuring that capital is directed towards technologies advancing inclusion, accessibility, and educational quality, rather than purely commercial optimisation.
A coordinated investment framework would also attract institutional investors (e.g., pension funds, family offices, and foundations) to the education innovation space, currently perceived as underdeveloped in terms of return predictability and regulatory clarity.

Major enabling factors

• Instruments such as InvestEU, the European Investment Fund (EIF), and EIC Accelerator already support innovation financing and could incorporate dedicated education technology windows.

• The Digital Education Action Plan (DEAP) and Digital Decade Policy Programme highlight the need for sustainable and responsible digital ecosystems, providing policy justification for targeted EdTech investment.

• Networks such as EIT Digital and EIT Manufacturing demonstrate successful models for EU-backed co-investment and mentorship that could be extended to education.

• Examples like the Dutch National Growth Fund and Germany’s High-Tech Gründerfonds show that public co-investment can catalyse private capital and sectoral growth

Major roadblocks

• National-level funding mechanisms often operate independently, lacking coordination or shared criteria.
  Few venture funds specialise in education, resulting in risk aversion and undervaluation of EdTech’s potential impact.

• Early-stage EdTech startups in smaller or lower-income Member States face particular challenges attracting private investment.

• Insufficient market intelligence and performance benchmarking make it difficult for investors to assess risk and impact.

• Promising national initiatives are rarely scaled or integrated at European level

Suggested action: Develop EU-Supported investment mechanisms 

WHO (Potential actors)
European Commission (DG EAC, DG Connect, DG GROW, DG FISMA), European Investment Fund (EIF), European Institute of Innovation and Technology (EIT), national innovation agencies, venture networks, and EdTech alliances
 
WHAT (Goal of suggested activities)
Develop EU-supported investment mechanisms that connect EdTech innovators with investors, de-risk early-stage funding, and foster sustainable private-sector engagement aligned with educational and societal impact goals

​
HOW (Suggested activities)

• Establish an EU EdTech Investment Platform under InvestEU or EIC Accelerator to pool co-investment funds for education innovation.

• Partner with EIT Digital and EIT Culture & Creativity to build an Education Innovation vertical, providing mentoring, scaling, and investor readiness support.

• Launch an EU EdTech investor network bringing together venture funds, family offices, and philanthropic investors to share due diligence tools and impact frameworks.

• Introduce blended finance schemes combining grants, loans, and equity to bridge the gap between early innovation and market entry.

• Develop shared impact measurement standards to assess educational, social, and sustainability outcomes of EdTech investments.

Existing steps in the right direction