Table of contents
The European education market comprises businesses that engage in providing private education, professional training and tutoring services. Identified assets offer their products and services physically, digitally or through a combination of both. We segmented the European market into: (i) private education, (ii) professional education and (iii) tutoring & training.
The European landscape has a fragmented nature, characterised by larger players only capturing low single-digit market shares in a specific geography or niche and a vast number of SMEs. The main source of consolidation stems from financial sponsors aggregating niche players with specialised offerings to create holistic value propositions. As such, further consolidation can be expected across the board, especially in the private education segment where players are on the verge of capturing significant market share from public institutions.
Sponsor-led interest has been significant, with ~72% of identified European assets being backed by investors (May 2023). Investors attempt to capitalise on (i) high consolidation and synergy potential through M&A, (ii) established entry barriers (e.g. reputation), (iii) high revenue visibility with shortened cash collection cycles as well as (iv) attractive revenue growth and profitability margins. On the other hand, the abundance of online educational content (e.g. freely accessible courses), compliance with ever-changing regulations and local hurdles in internationalisation represent the main detractors for investors.
ESG topics are primarily rooted in social challenges. Social issues revolve around providing accessible education to both the general public and professionals, thereby aiming to eradicate inequalities stemming from social classes, gender and racial backgrounds. Education players attempt to tackle these challenges by offering high-quality educational services, utilising scholarships to address educational inequalities and collaborating with government bodies to subsidise programme costs.
The global education and training market was valued at ~€5.5tn in 2019 and is expected to reach ~€6.8tn by 2025 (+3.6% post-COVID-19 CAGR; HolonIQ, November 2020)
Eurostat (May 2023) reported ~17.2m enrolled students in pre-primary to tertiary private educational institutions across the EU in 2021, compared to ~15.6m in 2017 (+2.5% CAGR 2017-2021)
An industry expert (interview by Gain.pro) projects the private education segment to attain ~25% of the European market in the medium term, thereby increasingly gaining market share from public institutions
More dynamic and turbulent work lives imply increases in job transition numbers and a subsequent switch toward lifelong learning beyond postgraduate studies (Pew, April 2020). Uncovered potential lies in establishing ongoing relationships with students and professionals, supporting educational needs in the long run on the back of sharply rising education participation rates (+19% between 2000-2018 globally; interviews by Gain.pro; UNESCO, December 2020)
The digitalisation of teaching methods, educational content and distribution channels allows for increased business model scalability and bottom-line margin upside (interviews by Gain.pro; Hospitality Insights, May 2023). Additionally, the application of AI to the education sector may yield substantial growth through a more customised learning experience and 24/7 teaching support (acer for education, May 2023)
Shift in perceptions by students due to rising dissatisfaction with public education, potentially allowing private players to capture significant market share from public institutions. Similarly, most EU governments want to increase the number of private players to put more competitive pressure on public institutions, thereby creating more value for students (e.g. closer partnerships with employers; interviews by Gain.pro)
The ubiquity of educational content on non-paid (e.g. YouTube) and freemium (e.g. Coursera) platforms, as well as piracy websites, significantly reduce customer demand and incumbents’ pricing power for premium products in the case of freely accessible alternatives (interviews by Gain.pro)
Lagging adoption of educational technology in private and public classrooms, as usage is hampered by an ageing teacher base that has great difficulty in keeping pace with the continuous development and roll-out of new online tools (interview by Gain.pro; School IT, January 2022)
Overall shrinking end-user base, evidenced by declining birth rates across the EU and the falling influx of new students (-2% YoY in 2021; Eurostat, May 2023). With many industries moving to other countries and the rise of remote work favouring dislocated headquarters, players will experience less demand for face-to-face offerings at physical locations (interview by Gain.pro)
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