What does the consolidation of small EdTech businesses mean for schools?

Tuesday, 14 November 2023 by Rob Pointen

Over recent years, thanks to the adoption of a steady stream of innovative technologies created by small, pioneering educational technology companies, schools have transformed the way they teach and operate. However, another trend has grown alongside this progress; much bigger investment organisations have started acquiring these small businesses. As more and more schools find that their EdTech suppliers are now being run by huge corporations, the question is: will schools continue to experience the high standard of service and innovative technology they’ve been used to?

How the EdTech industry has evolved over the years

The educational technology industry has grown rapidly, particularly in the UK. In fact, the UK EdTech scene attracts nearly half (41%) of all investment in educational technology across Europe. As a result, the UK has a thriving EdTech scene offering a wide variety of software designed to support parents, pupils, and schools.

Alongside this growth, for many years UK schools have been transitioning from traditional ways of working to take advantage of the wealth of technology on offer. Including software to facilitate cashless payments, parent-teacher communication, online parents’ evenings, homework tracking, school meal management, and much more. By automating and streamlining day-to-day operations, this technology has allowed schools to reduce workload, save money, and improve attainment.

The emergence of small EdTech companies

As the EdTech market has bloomed over the years, small education technology companies have emerged, grown, and flourished, working hand in hand with schools to develop technology that delivers real solutions to their problems. Not only has this benefitted schools, providing them with an increasing number of options when it comes to the software providers they choose to partner with, but it has also resulted in a buoyant, competitive market that puts schools at the centre of product development.

These small EdTech providers were often run by those who’d spent years in the education system, meaning they understood, intimately, the pain points schools really needed technology to target. Not only this but they often formed solid relationships with the schools they served, enabling them to work alongside school staff to develop their products and solve their problems. This meant schools received a high level of personalised, responsive service and were, on the whole, ‘happy customers.’

The acquisition and consolidation of small EdTech companies

In recent years, the EdTech industry has been changing – and not all for the better. Investment companies, lured by the success and potential for profit within the EdTech sector, have bought up many of these small EdTech businesses and consolidated their operations.

While this may not seem like an automatically negative situation, when investment companies acquire a small EdTech business, the focus tends to shift pretty quickly towards revenue and profit. Consequently, schools that were used to excellent, responsive service, fair pricing, and products that evolved alongside their needs, found they were stuck with providers who were only interested in selling them more products.

The consequences for schools

In short, schools whose providers were acquired and consolidated have suddenly found themselves to be very small cogs in a very big wheel. To get an accurate view of the day-to-day impact this has had on schools dependent on these suppliers, we’ve collected feedback from customers who found themselves in this position before moving to ReachMoreParents. In their words, the biggest issues are:

  1. Poor customer support.

In fact, this was often the main reason our customers decided to leave their previous supplier. The reason support is so bad for providers bought up by investment companies is that these large enterprises operate big service centres designed to support many products – often based overseas. This means, when looking for support, the people schools speak to are hired to provide services for huge amounts of products. As a result, they rarely know the product they’re speaking about well and are not always able to resolve problems quickly.

When problems are unresolved, issues get escalated, turning simple fixes into long-winded, drawn-out processes that involve numerous people. Due to product saturation, these large investment companies simply cannot be proactive in supporting schools to get the best from their new product.

  1. Less communication and stalled product development

Where small companies used to check in on their customers regularly to offer support and guidance and discuss and resolve any issues , now schools only hear from suppliers when they’re looking to upsell another product.

Additionally, for many schools, development of the product they purchased has stalled. Where previously it was expected that products would be continually updated in line with new feedback or customer need, the products schools bought originally are virtually the same as they were when acquisition was made. This is because investment companies will only sign off the cost of development if there is an opportunity to upsell or charge more – they are not motivated to incrementally improve products.

This means that the schools partnered with acquired suppliers are stuck with tired, outdated technology and products that cannot solve the new problems they face.

  1. Unmet seamless connection promises

When acquiring their providers, some investment enterprises have used marketing ploys to convince schools that bigger is better. Specifically, they’ve talked to schools about ‘the big picture’, by which they mean the strategic purchasing of multiple products via one supplier. And at first glance, what they’re saying makes sense – choosing one supplier for all products would seem to be a much simpler way to improve school efficiency as suppliers tend to design all their products to integrate seamlessly, meaning they can “talk to each other”.

However, this kind of seamless connection between products is difficult for large enterprises to achieve because the different products created by different companies have not been designed to integrate together. As a result, these enterprises are unlikely to deliver the seamless connection promises they make.

  1. Cost increases

For large investment companies, increasing and maximising profit is core to their modus operandi. To do this, they need to deliver less or the same for increasing amounts of money.

The results of this approach to EdTech are already showing in schools, as alongside complaints of declining service, schools are also reporting sharp annual rises in costs. And as more of their budget is eaten up by the increasingly expensive products they already have, schools cannot afford to invest in other products designed to tackle different issues, meaning schools are not always in the position to take advantage of new technologies.

ReachMoreParents: Small business, powerful communications

Schools make attractive customers for a variety of reasons, not least because of the reliability of financial recompense for suppliers. However, in the competitive rush to acquire businesses, what has been lost is a proper understanding of the unique communications and technology challenges of the sector.

Clearly then, whilst growth and competition in any industry is arguably a good thing, bigger is not always better – especially if all the fundamentals of good, quality service are lost.

At ReachMoreParents, we are experiencing an influx of new school customers precisely because we stand for the exact opposite of what these large investment companies represent. In fact, we pride ourselves on offering all the things we know really matter to schools. Namely, value for money, UK-based support teams, bespoke solutions that synchronise with existing systems, and a team of people with decades of educational experience who care about the positive impact our systems bring to schools. We are and never will be just salespeople.

To find out how we can support your school with our range of software for schools, click here to book a discovery call at a time that suits you, drop us a line via our enquiry form, or give us a call on 01509 221 349.

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