Welcome to our first guest article on Sidekick! We are very grateful to Libby Hills for this first contribution.
Libby leads a global Edtech investment portfolio at the Jacobs Foundation (a Brighteye LP). Libby also co-hosts the Ed-Technical podcast about applications of AI to education. She’s actively involved in Edtech and AI research herself and has published academic research in leading journals and conferences.
Libby's linkedin profile can be found here.
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In the rapidly evolving Edtech landscape, particularly with the rise of AI-enabled products, there's a growing imperative for companies to prove their solutions work. But many founders still view evidence generation as a cost centre rather than an investment. Our data and experience tells a different story – one where having evidence isn't just about ticking a box, but about creating tangible business value.
Evidence: a key driver of company value
Our internal analysis at the Jacobs Foundation has a clear pattern: companies that invest in evidence generation have higher Multiple on Invested Capital (MOIC) ratios. The Jacobs Foundation has an Edtech fund-of-funds made up of 10 investments. We took a closer look at two of these funds and found that K-12 companies with evidence had higher MOICs. The average MOIC for companies with evidence was 50% higher than for those without evidence in one fund and 70% higher in the other. And evidence here isn’t just big, expensive studies, it’s also earlier and smaller scale work like developing a logic model.
Now, because I’m an evidence person I would be remiss if I didn’t point out that this isn’t causal evidence. There could be a hidden external variable that’s leading to both evidence generation and higher MOIC. But founders would be remiss if they ignored this clear correlation.
The connection between evidence and financial returns isn't mysterious. When companies can definitively prove their impact, whether that’s time savings, skill development or improved learning outcomes, we think they can unlock multiple value drivers. The obvious benefit is that more evidence means more data and this can inform a higher quality product. Evidence also aligns with growing demand for proof that products work, and having evidence can help get leading education investors on board.
The market is demanding proof
Value creation through evidence is becoming even more critical as the market matures. Recent data from teacher survey company Teacher Tapp shows that 87% of teachers now want clear proof that Edtech works before adopting it – up from 79% in 2019. This demand isn't limited to individual educators; policy-makers are raising the bar too. The Department for Education has launched the Edtech Evidence Board (EEB) to evaluate the effectiveness of Edtech products, signaling that evidence is becoming increasingly important for market success rather than a nice-to-have.
Investors are raising the stakes
The investment community is also increasingly prioritizing evidence in their decision-making. Leading education investors like A-Street (a U.S. based $325M fund) are explicitly calling for "a new model for how capital should be put to work across PK-12 investing" – one that emphasizes quality and evidence. At the Jacobs Foundation we’ve convened an international group of education-focused investors to elevate evidence-building expectations across the sector. This shift means that building a strong evidence base isn't just about winning customers – it's also about accessing capital for growth.
While these examples mainly focus on K-12 we are hearing more and more that proof that a product works is becoming increasingly important to purchasers in higher education and corporate learning too. As budgets are squeezed, purchasing departments are under pressure to show good ROI.
The message is clear: across today's Edtech market, evidence isn't just an academic exercise – it's a commercial imperative. But how exactly should companies go about generating this evidence? That's exactly what I'll explore in my next piece, where I'll unpack different types of evidence and dive into practical strategies for building a compelling evidence base.
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