Entering the US: 2024 Guide for International EdTech Startups

The size of the US market is just one of the reasons. Startups that consider going to America will also have access to more capital, a bigger and more dynamic labor pool, and many other benefits.

For example, American investors are increasingly getting interested in European companies.

Sifted claims that 2023 has seen US funds intensifying their focus on Europe, establishing bases, and increasing the venture capital they funnel into European businesses.

According to Forbes, this is because hubs like Silicon Valley become too expensive.

Besides, it’s essential for business to be seen as a global player.

Enhancing your global footprint can automatically hone your reputation. And one of the best places to do so is America.

“Having the Silicon Valley office on our website helps a lot for our reputation to show we’re not just a little startup from Leipzig” says Karsten Beyer, COO for DataVirtuality, a data warehousing solution. “It shows that we’re a global player and that we can serve customers globally.”

As for EdTech, North America dominated the market and produced the majority of global revenue in 2022.

Over the next five years, it will account for 46% of the market’s growth.

The US will remain North America’s key EdTech market.

According to Global Data, it had total revenues of $69.9 billion in 2022, representing a compound annual growth rate (CAGR) of 16.3% between 2017 and 2022.

Where to boost your EdTech startup if not there?

If you want to learn more, there are articles on our blog, where we dive into the global EdTech market and analyze K-12 market prospects in the US. Take a look!

Lack of Funding

We must say that funding is not always necessary. For example, Kahoot (Norway) nailed it without relying on investors initially.

This shows that success in entering a new market can be achieved through various approaches, such as leveraging existing resources and partnerships, strong product offering and effective marketing strategies.

Yet, we’ll not underestimate funding as it can be extremely helpful or even vital for some edtech startups.

Go-to Strategy

Start by joining incubators or accelerators. Search for local investors or a strategic partner to assist you with connections.

At Aristek Systems, we focus on building networks and help others to connect with like-minded people from the US.

For example, Don Keeler is a recognized EdTech innovator with a unique depth and width of experience in K12 and HE markets, designing and producing successful platforms and solutions for 30+ years for Fortune 500, federal/state departments, publishers, workforce initiatives and more.

“My quality for Aristek is that I am able to critically understand where a client is and what areas are of the most importance to them, identifying a roadmap that maximizes their efforts that equate to cash flow. Most often I identify many items they have no knowledge of.”

Moreover, if you aim to raise money, keep in mind that US investors hesitate to support remote teams who can’t hold frequent in-person meetings.

For this purpose, Esteban Sosnik, a partner at Reach Capital, recommends hiring a local salesperson or traveling before finalizing the deal with an American investor.

Furthermore, many investors will favor that you have a parent company with a US address.
If it doesn’t work, instead of wasting your effort, you may feel the market and observe how VCs respond.

Choosing the Right Timing

It’s crucial for EdTech startups to choose the right timing for entering the US.

But what timing is right?

Go-to Strategy

Unfortunately, there’s no one-size-fits-all approach. Thus, we’re going to provide you with different options.

Some entrepreneurs believe that ‘the sooner, the better’. Competition gets harsher with the development of Edtech and every year new challenges appear.

Top 5 start-ups’ mistakes in US expansion, according to David Kellogg, include delays.

‘Instead of embracing US expansion early, you delay in the name of critical mass or incremental cost. No matter the logic, the result is the same. The company starts too late, potentially lets US competitors or copycats get established, and faces an even more difficult expansion in the US.’

Others believe it’s vital not to jump the gun.

“A lot of companies start thinking very early on about moving into the U.S., but I would recommend they wait to start thinking about it when they have a model that’s validated in their home country,” says Christophe Garnier, managing director of Spark Labs, a U.S. expansion platform for tech and media companies.

Anyway, it’s important for a company to make smart moves in this situation. All factors need to be considered. TAM is one of them.

According to Index Ventures, there are four possible outcomes based on your TAM in the US, whether you actually need presence in the America to gain customers.

Hiring Issues

The question is: Who do I need to hire?

And do I need to hire at all?

Go-to Strategy

Having US-based founders would be great for a startup that doesn’t have a founding team yet. But usually businesses that think about joining the US market already have it.

These startups need local assistance with company growth, sales, and strategy. because a thoughtful approach to internal communication is important.

For this purpose, landing teams can act as culture carriers. Also, local hires can be helpful in understanding the market and local regulations.

Working with Requirements

Quality is important. And, which is no less important, meeting the requirements. Compliance with edtech standards and protocols is a crucial part of it.

The US market is basically a patchwork of smaller local markets with various regulations, corporate cultures, legal frameworks and requirements.

Going through all of these may seem like an uphill struggle, especially for an EdTech startup.

For example, you’ll need to wrap your head around documents such as Request for Proposal (RFP), especially if you’re an LMS vendor or your company is seeking assistance. We’ll cover this in more detail in our next article.

Go-to Strategy

For this purpose, assess the technical side.

For instance, is your design compliant with WCAG level AA (US & international accessibility standard)?

How efficient is your code?

Can your product be integrated with other LMS/SIS? And many other aspects.