Faced with the current economic challenges, players in the lifelong learning market are adapting their business models. This article explores the strategies put in place to overcome funding shortfalls and make the most of technological progress.
The cover image of this article was generated by AI.
After a few years of “dolce vita”, or even abundance, the lifelong learning market has a choice to make: play the cicada or come back down to earth. It depends on your perspective: the industry professionals or the French government.
The cycle of reforms historically favorable to the industry is now over: it’s likely that after the 50% growth in public funding since 2018 (apprenticeship, CPF, PIC and FPC combined), a new cycle that takes us to 2027 is beginning. Without going so far as to speak of austerity, the market is slowing down. This is because public funding is on the decline, starting with the reduction in the Skills Investment Plan (PIC), whose laborious negotiations with the Regions are dragging on, the reduction in support levels for apprenticeship (NPEC), the remaining cost of personal learning account (CPF), etc. All these measures put together have caused a major shake-up for the industry players.
This shock can be explained by a lack of anticipation of changes, accentuated if not maintained by the lack of clarity in public policies. But it is also due to single-system business models, which make certain learning structures highly dependent on one or other funding mechanism. In fact, it’s always amusing to hear the heads of learning compangies talk about funding when they introduce themselves: “I’m a learning company funded by the CPF and a bit by corporate learning programs” or “we’re 100% apprenticeship with a bit of PRO-A”. For some, financing is almost a matter of identity.
This economic gloom is also being felt by investors, who have opted for a wait-and-see attitude. Higher education groups that have grown up around apprenticeships are particularly exposed, with NPEC declines, anti-apprenticeship lobbying, dividend payouts and the announcement of a possible investigative magazine issue on the industry. Enough to make investment funds wary. Fundraising in EdTech is also down, despite the buzz around AI. Acquisitions and fundraising have been postponed, as valuations are falling. Companies such as Oktogone and Datascientest had the good sense to sell at the right time.
On the corporate side, since the covid we have seen a steady decline in spending by major groups, with decreases of up to 10%-15%, as well as downsizing, particularly in learning management. Companies want to redirect their budgets towards higher-impact projects: retraining, reskilling, strategic skills, managerial populations, CSR. They are reducing budgets, cutting back on catalogue-based individual learning and investing instead in in-house academies that manage a portfolio of skill and learning programs. This reduction in budgets, which is not systematic, goes hand in hand with higher standards.
To cope with this drop in funding, the players in the learning industry need to diversify their business model. Several strategies are possible and are already being implemented:
The decline in public funding, combined with the need to diversify business models, has led to consolidation in the learning market, affecting both EdTech players and learning companies. Takeover of Bealink by Syfadis, of Teach on mars by Lumapps on the EdTech side, acquisitions of Collège de Paris (IRFA group, Groupe 39, Ifocop), opening of EM Lyon’s capital to Galileo, etc. Other players are opting for equity investment to diversify, such as FROJAL, the family holding company of the Lefebvre Sarrut group and owner of Dalloz Compétences.
The Collège-lycée Stanislas is even looking for investors to compensate for the end of support from the French Ministry of Education….
Learn Assembly is a hybrid consulting firm created in 2013 to support the transformation of all those involved in learning and employment. Our mission is to help them play a strategic role in their organizations to meet the challenges of skills in a context of environmental transition and technological transformation. We support the general management and L&D departments of major groups, public bodies and higher education institutions in their strategic development.
