The Takeaway: A Q&A With Nana Kyei on the Education Technology and Services Sector

Let’s start with a recap of the edtech space over the past 12 months. What’s happening in the industry right now?

Educational technology has proven to be a cornerstone of resilience in 2025, although it remains highly nuanced across subsectors, including K-12, higher education, professional learning, and corporate learning.

While government funding continues to influence K-12 and higher education, the corporate and professional learning segments are increasingly market-driven, focused on real ROI and measurable behavior change.

For example, upskilling has been the topic of the year in professional learning, as CEOs look to better train employees on AI adoption and prepare for potential role changes driven by new advancements. The increasing focus on internal transition of affected employees is driving a refocus on training and reskilling.

However, in higher education, the common misconception is that deal volume is down due to recent concerns around U.S. federal funding. In reality, the actual trajectory is on an incline, as many tech providers look to streamline operations and invest in mission-critical technology functions that improve overall efficiencies.

How is the funding environment looking as we close out the year? How do you expect it to change heading into 2026?

Deal activity has been steady across the entire edtech industry, all aligned with one core mission: producing real, measurable ROI and stimulating behavior changes from students, faculty, and employees.

For K-12 (and to a lesser extent, higher education), this couldn’t be more evident as administrators seek to address the long-standing teacher shortage. Although student populations are flat or declining in the U.S., there is a demand for technology that can help schools do more with less.

On the corporate side, healthcare is an obvious standout. The sector is the largest net-new employer in the U.S. and will remain so as older populations seek care, so upskilling and retraining in this field are a priority for healthcare providers who look to grow and build their workforce. 

While IPOs are more muted, many companies are looking to operate with flexible capital from the private sector. That said, public market launches are not off the table for 2026. We expect that stabilizing interest rates could unlock a surge of activity in both the public and private markets, especially for companies that could be eyeing M&A within edtech.

Outside of healthcare, why is upskilling or reskilling such a focus for CEOs and the companies that support continued professional learning?

With AI’s potential to upend much of the labor market, employers and economies are thinking of ways to ensure their workforces are adaptable.

Whether in blue, gray, or white collars, there is an emerging market within professional learning that considers how we retrain current generations of the workforce to better understand how they can manage AI systems.

Companies are realizing it’s in their best interest to retrain existing employees rather than risk losing them to competitors or having a stagnant workforce that is unable to manage the influx of technology being introduced into every profession. Investing in reskilling has become a strategic advantage, as it reinforces productivity and retention while safeguarding long-term profitability in a rapidly changing business environment.

What do the next six months look like for you?

We are in the middle of the M&A season for K-12 and higher education, and continue to see a significant uptick in activity. We expect that activity level to continue well into Q2, especially if there is more clarity on 2026 budgets. There will be continued discussion about the impacts of federal funding for both public and subsidized private programs within K-12 and higher education, although the impacts are expected to be much less than headlines suggest. I am, however, closely watching the fiscal health of state and local governments as well as regional subsidies and grants for high-impact programs. I also think the pace of adoption of school vouchers could be a very disruptive force in the K-12 market in 2026.

Key data I’m keeping my eye on is how many of the opportunistic A-/B+ businesses successfully trade. That portion of the market has seen the least number of deals over the past several years and is the largest by volume.

There is a large backlog of higher education, professional, and corporate learning platforms that would be effectively unlocked with favorable outcomes from the aforementioned group.

So, what’s The Takeaway? What should we expect as you close out the year?

Despite macro pressures and headwinds, we are optimistic for deal activity in 2026—especially as the edtech sector remains resilient, with CEOs and administrators alike looking to streamline operations and consider the next generation’s potential for deeper tech learning. Not to mention, the potential for easier capital flows thanks to continued interest rate drops from the U.S. Fed.

The playing field for M&A next year, particularly in higher education and professional development, will be strong as employers look to retrain their biggest investment—their future workforce. EdTech is betting big on the future workforce, regardless of discussions surrounding AI replacement.