According to the Vietnam Edtech White Paper 2023 by EdTech Agency released in August, about 70 investment funds poured more than $400 million into Vietnamese edtech startups between January and July.
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According to the report, this figure is $30 million than the whole of last year and could help bring the size of Vietnam’s edtech market to $3 billion by the end of this year.
EdTech Agency, which connects domestic and foreign businesses and investors in education, notes that Vietnam is in the top 10 edtech markets with the fastest growth rate worldwide, at about 44 per cent.
There are about 400 edtech companies with their own technology operating in the country. If including businesses whose products are operating on third-party technology platforms, the number rises to around 700, including about 200 new businesses entering the market since 2020.
“Private edtech accounts for 90 per cent of the market, focusing on the popular K-12 segment and teaching foreign languages, especially English,” said Nguyen Hong Hanh, founder and CEO of EdTech Agency. “The state edtech sector is led by domestic technology enterprises such as Viettel, VNPT, and MobiFone, mainly participating in the preschool and K-12 education management system. Foreign edtech has strengths in technology and hardware, and can provide smart classroom solutions in the Vietnamese market.”
The rapid increase in the number of projects has created a dynamic market and attracted foreign investors. Sandeep Aneja, founder and managing director of Kaizenvest, a private fund focused on education based in Singapore, said that Vietnamese edtech startups are still in the development stage but have rapidly gained ground against edtech peers from China, the US, and India.
“Venture capital and private equity funds will continue to be interested in Vietnam’s edtech sector,” said Aneja. “Exotic edtech groups often have a presence in Vietnam through acquisitions or opening new offices. Within the next year, we will begin to witness merger and acquisition activities to consolidate investments in the education sector that were made in 2016-2020,” he predicted.
According to CEO of Teky Institute of Technology Dao Lan Huong, the attraction for Vietnam’s edtech market comes from the large population size and the high level of payment for education compared to the world, including 15 per cent from the state budget and 38 per cent from households.
In addition, the government-backed digital transformation strategy aims to bring online training to 90 per cent of universities and 80 per cent of high schools and vocational training establishments by 2030 have been favourable for the development of edtech.
“Although the number of edtech groups is abundant, there are no big names. From an investor’s perspective, edtech valuations at this stage are early and have an attractive price,” said Huong.
Teky is an edtech founded in 2017 that provides teaching programmes in sci-tech, engineering, the arts, and maths. In May, the startup successfully raised $5 million, the largest series A edtech investment in the Vietnam market, from Sweef Capital based in Singapore and investor Strategic Year Holdings.
In recent years, Vietnam has seen a boom in investment in edtech. Virtual Internships, an edtech startup based in Vietnam, successfully raised more than $14 million in a Series A funding round led by European technology investor Hambro Perks in 2022. Other startups education technology companies such as Edupia, VUIHOC, Marathon, and Azota also successfully raised capital last year.
However, the Vietnam Edtech White Paper assesses that the quality of products is still uneven, and many new products only have primitive technology or use already-available chat and video call tools.
Meanwhile, the risk of human resources and the legal corridor is one of the issues worth considering when investing in Vietnamese edtech projects, said Aneja from Kaizenvest.
“Many startups lack high-quality human resources. Next, the education industry is tightly regulated, and changes in current regulations could have a significant impact on the industry,” he said. “Invest in segments that are less likely to experience significant regulatory changes.”
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