AI in Education Funding: A Quarter-by-Quarter Analysis

All funding deals in the AI in education market over the last years

Below is the table listing all the deals. You can find our methodology at the end of this page.

If you want a deeper understanding of the market and its current dynamics, get our report covering the AI In Education Market.

Is AI in education funding actually slowing down right now?

AI in education funding is still busy today, but the average company is raising far less money than it was a year earlier.

We counted 10 financings in Q2 2026, up from nine in Q1 and only one short of the 11 recorded in Q2 2025. The money moved very differently. Quarterly funding came to $45.1 million, versus $107.5 million a year earlier, and the median round fell to just $1.02 million.

The path between those two quarters is useful. Deals fell to seven in Q3 2025, then recovered to eight, nine and finally ten over the next three quarters. Funding initially recovered too, climbing from $40.6 million in Q3 to $54.7 million in Q4 and $70.1 million in Q1 2026. Q2 broke that pattern: more companies raised money, while total funding dropped 36%.

So the current weakness is mostly about check size. Investors are still funding plenty of AI education companies, especially very young ones, but much less money is reaching the typical startup.

Quarter	Deals	Capital	Median round	Largest round
Q2 2025	11	$107.5M	$7.0M	Knowunity, $31.17M
Q3 2025	7	$40.6M	$4.5M	The Invigilator, $11M
Q4 2025	8	$54.65M	$4.5M	SpeakX, $16M
Q1 2026	9	$70.14M	$5.0M	Subject, $28M
Q2 2026	10	$45.11M	$1.02M	Gizmo, $22M

Was Q2 2025 really an AI education funding boom?

Q2 2025 was a genuinely strong AI education funding quarter, even after we account for the one deal in the dataset that may have been counted twice.

The quarter produced $107.5 million across 11 financing records, with a $7 million median. More importantly, several companies raised substantial rounds at the same time. Knowunity closed roughly $31.2 million, SchoolAI raised $25 million, StudyFetch announced an $11.5 million Series A, and SigIQ.ai raised $9.5 million.

Those rounds were spread across different companies, so there was no single $100 million deal making the market look healthier than it really was. Knowunity's investor XAnge said the company had reached around 20 million users across 15 countries when it announced the Series B. SchoolAI was already selling an AI classroom platform to schools. SigIQ.ai emerged from stealth with a product aimed at high-stakes tutoring and exam preparation.

StudyFetch is the one complication. An SEC Form D filed in May reported $10 million of securities sold from a $12 million offering, while StudyFetch later said it raised an $11.5 million Series A in June. Public evidence does not make it clear enough whether these were two separate financings or two snapshots of the same process.

If we remove the $10 million Form D record, Q2 still comes to $97.5 million with 10 deals. It remains by far the biggest funding quarter in the period. The boom was real; the possible StudyFetch overlap just makes the peak slightly less dramatic.

Why did AI education funding fall so hard in Q3 2025?

AI education funding fell in Q3 because the market suddenly stopped producing the $20 million-plus rounds that had powered the previous quarter.

Deal count fell from 11 to seven, but funding dropped much faster, from $107.5 million to $40.6 million. The median round also slipped from $7 million to $4.5 million.

Look at the top of each quarter. Q2 had Knowunity at roughly $31.2 million and SchoolAI at $25 million. Q3's biggest deal was The Invigilator at $11 million. Arivihan followed at $4.5 million, while Wild Zebra raised $2 million.

This was a broad contraction in check sizes. There were no rounds above $50 million in either quarter, so the 62% funding decline cannot be explained by one megaround disappearing from the comparison.

Q3 also had fewer first financings. Their share fell from 54.5% to 42.9%. Investors were writing fewer checks overall, and the biggest checks became much smaller at the same time.

Did AI education funding really recover in Q4 2025?

Q4 2025 brought a real rebound in AI education funding, although most of the improvement came from larger follow-on rounds.

Funding rose 35% from Q3 to $54.7 million and the number of deals increased from seven to eight. The median stayed at $4.5 million, which tells us the recovery happened mostly near the top of the quarter.

SpeakX raised $16 million, Flint raised $15 million and VideoTutor raised $11 million. Those three rounds alone represented roughly 77% of Q4 funding. At the smaller end, Chalkie raised around $1.35 million and CampusKnot $1.1 million.

New-company activity actually became weaker. Only 37.5% of Q4 deals were first financings, down from 42.9% in Q3 and 54.5% in Q2. The median first financing was around $1.35 million, compared with an $11 million median among follow-ons.

Q4 was a better quarter, but the rebound was doing most of its work through companies that had already made it through an earlier financing step. It had not yet spread across the whole market.

Was Q1 2026 the healthiest AI education funding quarter after the peak?

Q1 2026 was the healthiest rebound after the Q2 2025 peak because funding, deal activity and new-company formation all improved together.

Deals moved from eight to nine and funding rose from $54.7 million to $70.1 million. The median round increased modestly to $5 million. First financings also jumped back to 55.6% of transactions after falling for two straight quarters.

There was real new-company activity underneath the headline number. Vimi raised $12 million in its first financing, Sparkli raised $5 million and Flashka raised about $1.17 million.

Subject's $28 million growth investment was still a major part of the quarter, accounting for about 40% of all money raised. Its financing announcement focused on expanding an existing K-12 curriculum platform, a good example of what was beginning to attract the largest checks: established products with real distribution.

Even with Subject doing a lot of the heavy lifting, Q1 looks broader than Q4. New companies came back into the market and the typical round became slightly larger at the same time.

What suddenly changed in AI education funding in Q2 2026?

Q2 2026 changed the shape of AI education funding: small rounds became much more common while a handful of companies absorbed most of the money.

Seven of the quarter's ten financings were below $5 million. Those seven deals represented 70% of transaction volume but only around 15% of the capital raised.

At one extreme, Dr Connor raised roughly $338,000, YoLearn.ai $500,000 and Lytmus AI around $530,000. ProLearn's roughly $3.14 million round already looked relatively large within this group.

At the other extreme, Gizmo raised $22 million, almost half of the whole quarter. Coursemojo added roughly $10.34 million. The top three deals together captured close to 85% of Q2 funding.

That is why deal count alone gives the wrong impression. Plenty of companies were still finding investors. What became scarce was the middle of the market: lots of very small financings, then a sharp jump to a few much larger ones.

Are new AI education startups still getting funded, or is the money moving to older companies?

New AI education startups are still getting funded regularly, while most of the serious money is now flowing to companies with more operating history.

Half of Q2 2026 deals were first financings. That is close to the 54.5% first-financing share we recorded at the start of the period, so there is little evidence that investors have stopped backing new companies.

The amounts changed much more. Those five first financings raised only $4.81 million combined, and their median was $500,000. Follow-on rounds generated $40.3 million during the same quarter.

Company age tells a similar story. The median company receiving its first financing in Q2 was around one year old. For follow-on companies, the median was six years.

At the same time, early-stage deals still dominate the market. Their share of capital stayed around 60% to 73% in every quarter we studied. We therefore do not see a wholesale move into late-stage investing. What we see these days is a much wider range inside early stage itself: tiny checks for new experiments and much larger rounds for companies that can already show users, customers or distribution.

Third Space Learning captures the mature end of that pattern. The company has operated since 2013 and said its roughly £4.4 million 2026 equity round would help scale its spoken AI tutor Skye. Its announcement also pointed to more than a decade of tutoring experience, 196,000 students served and over 4,200 schools reached.

Are AI Tutor Platforms becoming the hottest part of AI education funding?

AI Tutor Platforms currently have the clearest momentum in the market by number of deals.

The category went from one deal in Q4 2025 to two in Q1 2026 and six in Q2. In the latest quarter, tutor startups made up 60% of all financings.

The money has not grown nearly as fast as the deal count. Those six Q2 tutor financings raised about $20.8 million in total, and their median round was roughly $1.84 million.

There was also a huge spread between companies. Coursemojo raised more than $10 million and Third Space Learning roughly $5.9 million. ProLearn came in around $3.14 million. Dr Connor, Lytmus AI and YoLearn.ai were all below $600,000.

So the current tutor boom looks like a startup-formation wave first. Investors are funding a lot of different approaches to AI tutoring, from voice-first exam preparation to curriculum-aligned school tutors, but they are still making sharp distinctions between which ones deserve multi-million-dollar rounds.

Category	Q2 2025	Q3 2025	Q4 2025	Q1 2026	Q2 2026
AI Tutor Platforms	4 deals	3	1	2	6
AI Learning Software	6	1	2	4	1
AI Practice Tools	0	0	2	1	2
Educator Copilots	0	2	3	1	1
AI Grading Tools	1	0	0	1	0
AI Assessment Platforms	0	1	0	0	0

Is AI education funding rotating away from Learning Software?

The latest category mix swung hard away from AI Learning Software, while Tutor Platforms gained breadth and Practice Tools picked up a large one-company boost.

AI Learning Software had dominated several earlier quarters. It generated $54.2 million in Q2 2025 and then reached $45.8 million in Q1 2026 across four deals, including Subject's $28 million round and Nectir's $12.5 million financing.

One quarter later, the category produced only a single deal, ChalkTalk's roughly $637,000 cash-equity financing.

That collapse is big enough to take seriously, but we only have one weak quarter so far. With eight to eleven deals in most quarters, a category can disappear from the top of the table very quickly when two or three financings move elsewhere.

AI Practice Tools show the opposite problem. Their Q2 total reached more than $22 million, yet almost all of it came from Gizmo. As seen above, that single $22 million Series A represented close to half of the quarter's entire market.

For now, AI Tutor Platforms give us the cleaner momentum story because the increase comes from six separate financings. Learning Software has clearly lost its former dominance in the latest quarter, while Practice Tools still need more companies to raise before we can call their funding surge broad.

Is AI education funding moving from North America to Europe?

Europe led AI education funding in Q2 2026, but one quarter is far too little to call this a geographic shift.

European companies represented 40% of Q2 deals and roughly 66% of the capital raised. North America fell well behind on dollars during the quarter.

That reverses what we saw earlier. In Q1 2026, North America generated only a third of the deals yet captured about two-thirds of all funding. It also took more capital than its deal share would suggest in Q2 2025.

The latest European total was heavily shaped by the quarter's biggest UK financing. APAC showed almost the mirror image: it generated 30% of Q2 deals but only around 9% of the money. ProLearn, Lytmus AI and YoLearn.ai gave Asia a wider startup base, although all three rounds were relatively small.

Geography is moving around much faster than the underlying market. Where the largest one or two deals happen to land can completely change the regional leaderboard from one quarter to the next.

Are the same investors controlling AI education funding now?

AI education funding still has a fragmented group of lead investors, while corporate and education-industry investors have become less visible.

We found almost no lead investor repeatedly dominating the market. Insight Partners led SchoolAI, XAnge led Knowunity, WestBridge Capital backed SpeakX, Vistara Growth led Subject and Shine Capital led Gizmo. Triple Point Ventures is one of the few clear repeat examples, backing Chalkie in Q4 2025 and again in Q1 2026.

That fragmentation has held up across the five quarters. No lead investor appears more than once inside a single quarter.

Strategic investors moved in the other direction. They participated in two of the 11 Q2 2025 deals, one deal in Q3 and one in Q4. We recorded none in either Q1 or Q2 2026.

The earlier names were meaningful. Duolingo invested in SigIQ.ai, College Board participated in StudyFetch, Educational Records Bureau backed Wild Zebra and ECMC Group invested in BoodleBox. These were companies or institutions with a direct connection to learning, assessment or education distribution.

Only half of Q2 2026 deals disclosed a lead, so the latest investor picture is less complete than the earlier quarters. Still, there is little evidence of a small VC club taking control of AI education funding, and strategic capital has clearly become less common in the deals we could verify.

Quarter	Deals with disclosed lead	Unique disclosed leads	Strategic-backed deals
Q2 2025	10 of 11	12	2
Q3 2025	5 of 7	6	1
Q4 2025	6 of 8	8	1
Q1 2026	8 of 9	9	0
Q2 2026	5 of 10	6	0

Did US AI education policy cause the Q2 2025 funding surge?

The US government's push for AI education helped validate the market, but the timing shows that it did not create the Q2 2025 funding boom.

Executive Order 14277 was issued on April 23, 2025. It called for stronger AI literacy, more AI training for teachers and wider exposure to AI concepts in schools.

Several of the quarter's important rounds were already public by then. SchoolAI announced its $25 million Series A on April 2. SigIQ.ai announced $9.5 million on April 7. Ed.ai's roughly $1.86 million financing was announced on April 8.

Investors were already writing checks before the executive order arrived.

The policy still gave the sector something useful: explicit federal support for AI skills and AI use in education. That made the broader adoption environment friendlier, especially for companies selling into schools or training educators.

We treat the order as supporting context for demand, not as the explanation for the quarter's funding total.

What is AI education funding actually telling us now?

As of now, AI education funding looks active at the bottom of the market and increasingly selective at the top.

The first durable change is that company formation has held up much better than funding dollars. Deal activity recovered for three consecutive quarters after the Q3 2025 low. Investors are still willing to finance new AI education startups.

The second is the collapse in typical first-round size. A new company can still get funded, but these days that can mean a $300,000 to $500,000 check rather than the multi-million-dollar first rounds we saw more often near the start of the period.

The third is that companies with real scale can still raise much more. Subject, Nectir, Gizmo, Coursemojo and Third Space Learning all show different versions of the same pattern: investors will write larger checks when they can see existing distribution, meaningful usage, institutional adoption or a longer operating history.

The strongest category momentum currently belongs to AI Tutor Platforms because several different companies are getting funded at once. AI Learning Software has gone through the sharpest reversal, and we need another quarter before deciding whether that decline will last.

Investor concentration is less obvious than company concentration. Lead investors remain scattered across many firms, while strategic participation has faded during 2026.

And the biggest trap is still the headline funding total. Q2 2026 looks weak if we only see the 36% quarterly decline in dollars. Underneath it, deal activity rose and six tutor companies raised money. The market has become much harsher about who gets a big check, while remaining surprisingly open to new experiments.