The global education technology industry is headed for a record-setting year when it comes to venture capital investments. In the U.S., companies like Coursera are raising hundreds of millions at billion-dollar valuations. That’s dwarfed by their peers in India, where Byju’s has already raised over $1 billion—at a $10 billion valuation.

A less frothy but steadily growing edtech market is emerging in Europe, where investment check sizes often have fewer zeros. Yet financiers there, like their counterparts across the world, are eyeing this industry with greater interest as the pandemic has accelerated demand for educational services.

Case in point: Brighteye Ventures, a Luxembourg-based edtech investment firm, has raised $54 million in the first close for its second fund. It expects to finish fundraising in spring 2021, and cap the fund off at roughly $88 million.

“This milestone and the timing are where we wanted to be when we launched Brighteye in 2017,” says Benoit Wirz, a partner at Brighteye Ventures. “It proves that there is appetite among investors for helping education companies serving the European market.”

Source: Brighteye Ventures: “The European EdTech Funding Report 2020.” Figures exclude growth, private equity, grants and debt financing deals.

For much of the past decade, Europe’s edtech investment activities were largely concentrated in the U.K., which has been home to an edtech investment fund (Emerge Education), a large annual edtech expo (BETT) and a conference for investors (EdtechX Europe). That center of gravity has been shifting, though. Earlier this year, a group of Finnish investors launched the Nordic region’s first edtech venture capital fund.

Before helping to start Brighteye, Wirz worked for the Knight Foundation, the Miami-based nonprofit best known for supporting arts, media and journalism. There, he managed a $20 million investment fund whose portfolio included edtech startups Nearpod and Newsela—both of which today claim many millions in terms of revenue and users.

“Having seen the growth of the U.S. edtech sector, I believed that many of the underlying trends and factors could also take off in Europe,” says Wirz.

To put that theory to the test, he and a couple of business partners launched Brighteye Ventures in 2017 with a €50 million fund (about US $58 million at the time). Eighteen investments later, all the startups are still around, says Wirz, who is looking to add more to the portfolio.

Fundraising for the second fund began in February, just as COVID-19 was on its way to becoming a global pandemic. “Quite quickly, all our travel plans were cancelled,” says Wirz. “But the silver lining was that it increased everyone’s awareness—among investors, limited partners and others—about what the potential of education technology was.”

The $54 million that Brighteye has secured so far for its second fund came from family offices based across Europe and the Middle East, according to Wirz. He is expecting to raise the rest of the money from institutional investors.

From this second fund, Brighteye plans to invest up to $4 million in each deal. Wirz estimates his team will make about 15 investments at the seed and Series A stages, and another five to 10 for early, pre-seed stage startups.

Brighteye Ventures takes a broad view in defining the education market. “Our thesis is around meeting unmet learning demand for learning opportunities,” offers Wirz, whether they happen in schools or are “driven by economic imperatives or leisurely activities.”

According to him, one of the fastest-growing companies in the portfolio is a driving school that offers online instructional materials and a marketplace for finding nearby driving instructors. (Getting a license is more complicated in Europe than in the U.S., Wirz notes.) Another startup builds telescopes for astrology enthusiasts. There’s also a platform that provides AI-assisted coaching for aspiring competitive gamers, and another for cooking classes.

Then there are the more “conventional” edtech businesses—including a coding bootcamp, a marketplace to match teachers with school job openings, and a communication platform for colleges and universities. Others are building language-learning apps and toys that teach kids STEM concepts.

For its second fund, “the biggest opportunity continues to be new digital learning solutions enabling acquisition of professional skills,” says Wirz. “We expect the range of such products to expand in depth, moving from introductory coding, data science and design to more advanced innovation economy skills, but also to cover a much wider range of white-collar and blue-collar professional skills.”

With its focus squarely on the European market, Brighteye Ventures expects that 80 percent of the companies it supports will be based in the region. However, it has invested in startups based elsewhere that plan to expand to Europe. Two U.S. startups—Epic and TeachFX—are among those in its portfolio.

As in the U.S., the pandemic has driven increased demand for and usage of edtech services across Europe. But Wirz says there are noticeable differences. Many schools across Europe have reopened without offering remote alternatives. As a result, companies that focus on selling to schools are not seeing as much growth as their counterparts in the U.S., where devices and software remain in high demand.

None of the startups that Brighteye has invested in have gone public or been sold—which is what Wirz and his team will eventually need in order to make returns on their investments. But recent deals offer promise, he notes. Last year, Kahoot went public on the Norwegian stock exchange; the year before, Swiss-based HR firm Adecco Group acquired General Assembly for $412.5 million.