The new methodology jointly created by EdtechX and IBIS incorporates ESG and will be used to assess the investment potential of edtech companies

To determine the investment potential of edtech companies, EdtechX and IBIS have launched a new methodology incorporating ESG.

The proprietary methodology, one of the first of its kind in the edtech sector, has been developed by EdtechX Holdings (EdtechX), a leading European edtech investment platform, and specialist education technology investment bank, IBIS Capital. The methodology examines seven ESG metrics material to the edtech sector including factors such as reach and affordability, efficacy of education or training, responsible selling and marketing practices, customer privacy and data security among others.

Key performance indicators within each edtech-specific category, such as the number of students enrolled (including those enrolled from underserved geographies and low-income households), course completion rates and job-placement rates, help investors to accurately assess the efficacy of ESG initiatives and the strengths, weaknesses, and risks of potential investments in the sector.

EdtechX and IBIS Capital hope its comprehensive methodology will also help edtech companies assess their own ESG criteria and performance, as well as assisting the rising number of generalist investors seeking to enter the space. EdtechX Holdings Acquisition Corp. II will be the first SPAC to evaluate potential investments in this way, with the aim of attracting impact investors to the edtech industry.

ESG is a core focus for EdtechX, which last year launched the ‘SPACs for Good’ campaign. The pledge saw co-founders, Benjamin Vedrenne-Cloquet and Charles McIntyre, grant 4% of their SPAC founders shares to not-for-profit initiatives which support the digitalisation of education. The campaign also encourages other SPAC founders and sponsor teams to pledge a minimum of 1% of their founders shares as a grant for the same causes. The co-founders hope to establish the campaign as a market standard.

Benjamin Vedrenne-Cloquet, CEO and Co-Founder of EdtechX and Partner at IBIS Capital said: “The Covid-19 pandemic significantly impacted learning as most educational institutions swiftly transitioned to a remote or hybrid learning model comprised of a mix of in-person and virtual education. While challenging to execute, this rapid shift accelerated advancements in the field of education technology and a hybrid model will undoubtedly be retained going forward to enhance traditional education.

It is therefore imperative that edtech companies operating in this exciting space remain on top of not only the technological challenges this structure poses, but also the relevant ESG factors required to ensure the success of the model in bringing equality to accessibility of education. We expect this methodology to support a shift towards ESG excellence in the sector.”

New to EdTech?  Read our EdTech 101 guide: https://global-edtech.com/edtech-definitions-products-and-trends/