Is online learning coming back?

elearning When I started my e-learning company back in 1999 everyone was talking about how all training was going to be online by 2010. It hasn’t happened at all, and even worse, flagship companies such as Saba, with a market cap of $142M and SumTotal, which was taken private by Vista Equity Partners in 2009 for about $160M didn’t perform as expected.

On the other side, companies such as BlackBoard, with a market cap of $1.45B and SkillSoft, with a market cap of $1.05B did much better. There hasn’t been a lot of innovation after this first generation of e-learning startups. However e-learning as an industry seems to be making a comeback with companies such as 2Tor, founded by Princeton Review’s John Katzman, getting a lot of attention after raising a $10M series A in June 2009 and $20M series B recently led by Highland to go after elite programs at elite schools.

The US market for self paced e-learning reached $16.7B in 2009, and is expected to grown to $23.8B by 2014 according to AmbientInsight. What does that mean? That the market opportunity is huge! The market is begging to be disrupted and shaken.

Even though most of the spending is done by corporations, the healthcare, higher education and PreK-12 segments are growing faster. What makes it even more interesting is that new devices such as the iPad create interesting opportunities to develop solutions for these growing segments. Imagine if someone could leverage the iPad, Twitter, Facebook, Zynga and other highly interactive and addictive solutions to go after the training market?

UPS had a lot of press lately about the use of video games to train the younger generations of truck drivers. Gaming is hot and portable devices are much better in handling multimedia applications. The ecosystem is ready for a second wave of innovative e-learning companies and I expect to see a lot of action there!