Abstract

Education technology (EdTech) received billions in venture capital in the 2010s amid expectations that digital technologies would disrupt established systems of education. Yet EdTech markets expanded primarily not by replacing schools and universities, but by providing services around them. Why did these emerging markets develop where they did? Drawing on a global dataset of large education firms, we compare EdTech industries across China, India, and the United States. We find that despite common technological and financial foundations, EdTech developed in distinct supplementary domains: after-school tutoring in China, upskilling in the United States, and a combination of both in India. We explain this variation by showing how institutions organize demand: educational selection and labor market shaped demands for supplementary education, creating distinct markets for venture-funded EdTech. We conceptualize supplementary market formation as a trajectory in which new markets develop around demands generated by established institutions rather than through their displacement. The findings show how emerging markets develop not simply around what new technologies make possible, but around what existing institutions make valuable.