EQIR: E-learning Companies Target Path-to-Profitability - Q2 2001

Venture capital investment in education businesses continued to decline in the second quarter, totaling just $247 million - a 21 percent drop from the previous quarter. Overall, the $558 million in year-to-date total private investment in education represents a nearly 70 percent decrease from the first half of 2000's record-setting $1.8 billion. During the second quarter, numerous e-learning providers were able to meet or exceed analysts' revenue estimates, enabling the e-learning market to maintain growth rates greater than those experienced in other segments of the economy.

However, several measures indicate that e-learning providers' ability to maintain growth rates during tough economic times will become more variable. This installment offers several insights related to growth strategies in a difficult market and provides tools and data to assist readers in assessing venture capital activity in education.