|Shift to edtech taking centre stage. Source: freepik.com |
Last month Manabie, a Singapore-based education tech firm, secured $3 million in investment from Do Ventures, Genesia Ventures, and Chiba Dojo.
“Manabie is leveraging new funding to keep increasing our content, coach training, and technology to enhance the personalised learning experience, and with our current technology we can expand our outreach further,” said Christy Wong, Manabie co-founder.
In February San Francisco-based edtech company ELSA, which helps language learners improve their English-speaking skills and pronunciation, raised a $15 million Series B funding round, co-led by Asia-based Vietnam Investments Group and SIG.
Michael Ngo, Vietnam country manager of ELSA said, “This new funding will go towards research and development to further our award-winning voice recognition AI, build a scalable business-to-business (B2B) platform, and hire new talent.”
ELSA recently piloted its B2B efforts with schools in Vietnam and India and received significant interest from other regions. “Therefore, we will also focus on creating a scalable B2B platform that allows cooperation with corporate partners and schools around the world,” he said.
Additionally, in mid-March, Vietnamese edtech startup Edmicro closed a pre-Series A+ round from Singapore-based venture capital firm BEENEXT, Qualgro, and Insignia Ventures Partners. Elsewhere, Nguyen Hoang Education Group announced two American baccalaureate programmes in Vietnam in both online and offline education.
Leading the game
In the technology sector, edtech has been the third-most funded field in Vietnam over the past eight years. The total venture capital investment in edtech is now $103 million, just behind payments ($462 million) and retail ($416 million), according to a Do Ventures report. But with COVID-19 continuing to cause chaos worldwide and despite successful prevention here, the Vietnamese edtech market is now more active than ever, as evidenced by the increase in raised capital for such educational startups.
Olivier Raussin, managing partner of FEBE Ventures, highlighted that attention to edtech stems from social distancing leading to remote learning being a way to help students continue their education.
Online delivery platforms, he said, are trying to solve the dual problem of teaching and learning. However, as education is a massive industry with many intricacies in the value chain, the digitalisation of the industry “will bring forward many interesting companies that solve other problems in the education space than online education delivery”.
From a different angle, Jenny Chau Dang, representative of Topica Edtech Group, noted that like many other higher education institutions around the world, the pandemic showed that Vietnam’s higher education institutions also lack the digital capabilities for distance or online learning.
“We saw this very clearly in 2020 when Vietnam went into its first lockdown. Many schools and institutions not only were ill-equipped and unprepared to move teaching and instruction online, but often cannot afford to develop the resources to move online,” she said.
Combine that with lack of expertise to create high quality, attractive content to motivate and engage learners on the platform, these conditions, created and heightened by the pandemic, have increased the demand for online learning, she added.
Statistics from Topica show that Vietnam is a burgeoning edtech market estimated to reach $3 billion by 2023. There are approximately 16 million students in primary and secondary schools and another 1.7 million in universities in a country where parents spend upwards of 47 per cent of their disposable income on education for their children.
Nevertheless, Olivier Raussin from FEBE Ventures said that parents’ budget for education is not exactly a mutually exclusive choice between online or offline. Further, he noted that the portion of parents’ budget for online education has not grown significantly either.
However, parental budgets for education in general in Vietnam are some of the largest in the world, and some of the fastest-growing as well. Statistics indicate that Vietnamese parents spend up to 40 per cent of their disposable income on their children’s education.
“It will be challenging to compete directly to the traditional players for the money from the parents’ wallet – as such, some startups in this space position themselves as complementary pieces and value creators for traditional players,” Raussin said.
In his opinion, the technology prowess of startup companies can add value to traditional businesses in education. As a result, the education space as a whole can deliver a greater experience to students and parents are willing to invest more.
Despite clear advantages that edtech startups may have, issues remain that startups themselves have to find ways to address.
Ngo of ELSA supposes that when it comes to language learning, more often than not, the biggest challenge is motivation. Regardless of the delivery method - offline or online - if the learner is unmotivated, the results will reflect accordingly. On the other hand, Wong from Manabie believed that the learning experience in an online environment still faces many challenges from an infrastructure perspective. Internet speed in rural areas is limited; and many students only have a low-spec smartphone.
Topica claimed learners are becoming more demanding. “There is a need to find the right balance between high-quality content and affordable fees to continue to attract and retain learners and maintain our 90 per cent retention rate,” said the representative.