Last year, the ed tech industry’s three-year growth streak ended with a dip in both deals and total funding. However, last quarter deals ticked back up to 135, the highest quarterly deal count since Q3’15. This strong start puts the category on track to surpass 2016 in deals and dollars.

We define ed tech startups as those working to replace or supplement traditional education systems for both students and professionals. Companies in this category offer products and services ranging from exam grading software to online learning platforms and even secondary education systems that offer alternatives to traditional schooling.

Using CB Insights data, we dug into funding trends in ed tech. This research brief covers:

Annual financing trends

Between 2013 and 2015, investors consistently increased investment to the ed tech industry. Deals hit a record of 522 with a combined value of $3.44B in funding in 2015.

The streak ended last year when deals to ed tech companies decreased 17% to 434. Funding also decreased by 32%, from $3.44B in 2015 to $2.35B in 2016.

Investment seems to be coming back this year as the industry has already seen 219 deals across $1.26B, already more than total funding in 2013. At the current run-rate, global ed tech investment activity is projected to reach 506 deals across $2.9B. This represents deal growth of 17% and funding growth of 24% from 2016. But deals and dollars will still fall short of 2015′s record at the current run rate.

The largest investment so far in 2017 went to EverFi, a DC-based startup that has created a digital learning platform for K-12 schools, universities, corporations, sports leagues, and non-profits. In April, EverFi raised a $190M Series D round led by The Rise Fund with participation from existing investors Allen & Company, Advance Publications, Rethink Impact, Eric Schmidt, and Evan Williams. New investors include Main Street Advisors, TPG Growth, Amazon CEO Jeff Bezos, and U2’s Bono.

Quarterly funding trends

Quarterly deals to ed tech startups have fluctuated in the past four years. Q1 of this year saw a rise to 135 deals, higher than any quarter since Q3’15.

Q4’15 saw a record surge in funding, up 58% from the previous high set in Q1’15. The one-off spike was not driven by any particular outliers but rather a flood of investment to Asian companies. Shanghai startups iTutorGroup and HuJiang raised $200M and $157M in Series C and D rounds, respectively. China is the third most active country in ed tech, accounting for roughly 7% of all deals since 2013. The US accounts for 58% of all global deals, while India accounts for 7.8%.

Annual financing trends by stage

Broken down by stage, early-stage deals (seed/angel and Series A) have seen their share of deals decrease over the past five years. So far this year, early-stage deals represent 62% of all deals, roughly equal to 2016’s breakdown but still down from 71% in 2013. The top early-stage deal in 2017 YTD was a $21 Series A investment to Examity from investors including University Ventures and Inherent Group. The Massachusetts-based startup uses proprietary keystroke identification technology to provide clients with online exam proctoring software.

Mid-stage deals (Series B and C) represent 11% of all deals YTD, with the largest deal being Shanghai-based Xuebajun’s $100M Series C round. Xuebajun is a mobile app that provides students with answers from both proprietary robots and online teachers. AltSchool, previously backed by Andreessen Horowitz among others, also received a notable $40M Series C investment from existing investors First Round Capital and Founders Fund. AltSchool is a network of micro-schools that offer personalized, child-centered learning experiences. Meanwhile, late-stage deals represent 6% of all deals this year, with the largest being EverFi’s Series D round.

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