Investment in Childtech and Edtech: Venture Capital Funds for Startups Focused on Childhood

Discover 11 options to fund your company with private capital. The list includes venture capital funds that have invested in early-stage and growth-stage childtech startups.

Congratulations! If you are reading this article, your startup is probably growing and you need capital to take it to the next level. Since we know how challenging the fundraising process is, we put together a database of different venture capital funds that have invested in Latin American childtech startups.

Fortunately, educational startups focused on early childhood and K-12 have the financial support of local and international venture capital funds. For example, Softbank, one of the most active venture capital funds globally, has in its investment portfolio companies such as Camino, a digital learning platform that seeks to simplify and modernize the K-12 pedagogical core in Brazil.

Another fund is Kaszek, one of the most active in Latin America, which has invested in childtech startups such as Crack the Code, the leading online technology school for children in the Latin American region. Without a doubt, venture capital plays an important role in driving the development of the childtech ecosystem and the growth of startups through capital, support and strategic advice, as well as contacts.

To get an idea of the boost venture capital is giving, by 2021 it had provided 1.1 billion dollars to edtech startups in Latin America and the Caribbean, mostly in pre-seed, seed, Series A and Series B rounds. Of all these investments, 26% went to K-12 startups, while 6% went to early childhood, according to the study “Educational Technology in Latin America and the Caribbean” by the Inter-American Development Bank (IDB) and HolonIQ.

This is good news considering that childtech is an early-stage sector, although investment is still low compared with workforce edtech, which has received 55% of total funding.

The investment outlook for the coming years is encouraging, considering the needs in the education sector and the fact that Latin America is one of the regions receiving the most edtech investment. The countries where investment is concentrated (including childtech companies) are: Brazil (US$649 million), Peru (US$145 million), Argentina (US$121 million), Mexico (US$80 million), Colombia (US$43 million), Chile (US$32 million), Guatemala (US$2 million), Uruguay (US$2 million) and the Caribbean (US$2 million).

Investor momentum

But why are childtech companies attractive to venture capital? Venture capital funds, especially those dedicated to impact investing, have shown a particular interest in this type of company because of the learning needs they address, their ability to transform education in a region with social inequalities like Latin America, and the goal they pursue: improving the quality of teaching and learning processes and democratizing access to education.

Octaviano Couttolenc, director of Impact Ventures at Promotora Social México, says that impact investing looks for profitable startups that at the same time transform people’s lives. “We are convinced that education changes lives. If you change a life from childhood, you are changing the life of tomorrow’s adults,” says Couttolenc.

And that is exactly what is happening in the childtech ecosystem. “Entrepreneurs bring innovative and disruptive models that can help achieve school inclusion and make up for educational gaps that governments in different countries do not address,” says Couttolenc. That is why educational companies for children such as Hipocampus and Kinedu are in Promotora Social México’s investment portfolio.

On this point, Carolina Arce, co-founder and CEO of Impactus Ventures, says that the region has major education problems such as coverage, low learning quality, school dropout and a lack of teaching of socio-emotional skills. These needs represent big market opportunities that have led entrepreneurs to develop products to transform education at early childhood and K-12 levels.

Capital for early and growth stages

If you have a product like this and you are looking for investment, or plan to in the future, we invite you to check the database of venture capital funds we prepared especially for you. They can help you get the funding you need and so accelerate your company’s growth. The list includes different options for early-stage and growth-stage startups with a presence in Latin America.

To choose your startup’s fund, we suggest considering your startup’s growth stage (early stage or growth stage), the current investment round (pre-seed, seed, Series A, B, C and beyond), the amount of capital you need, and whether your product and model are aligned with the investment thesis of the fund you would like.

Check the list of 11 VCs that have invested in Childtech and Edtech startups in Latam:

VC funds that have invested in Latam Childtech startups - Created by Impactus Ventures

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Even though childtech is a developing sector, entrepreneurs have great opportunities to grow and receive investment. Couttolenc expects greater investor participation in educational companies focused on childhood in the coming years, which could increase investment deals and the amounts of capital for startups.

However, Arce points out that to increase the chances of receiving investment, “edtech companies must be clear that they need to scale very fast, and if they are in a small market, as almost all countries in Latin America are, they are obliged to expand to new countries if they want to achieve it.”

For Couttolenc, “the challenge educational startups face is finding why to focus on early education and under which model to do it, whether in person or digital.” He explains that in-person education models have greater impact, but they have more difficulty scaling because of the in-person format, so growth is slower. That is why he recommends focusing the model on digital platforms.

We hope this list of funds helps you move to the next stage of growth in your company. Best of luck!