Shifting sands in progress for edtech amid reopening

Teachers, students, and parents are all relieved that in-school learning is back across many localities in Vietnam, Photo: Duc Thanh

According to data from South Korean venture capital Nextrans, there has been an acceleration of investment into Vietnam’s edtech market, with 11 deals in 2021 totalling over $108 million, the highest ever, and higher than the total seen in 2018-2020 combined.

The pandemic is seen as one reason for the change in how tech funds view the education market. Funds betting on education startups for the first time were leading some of the biggest edtech deals in 2021.

On top of the list is EQuest Education Group, a private organisation specialising in English-language training, with a $100 million investment from American fund KKR. English learning app ELSA also landed a $15-million deal in Series B from Vietnam Investments Group and SIG.

Meanwhile, coding app MindX received $3 million in its ​​Series A round led by Southeast Asian Wavemaker Partners. Despite operating in different forms, whether as live classes or content providers, the online education programmes that these edtech companies provided all saw higher demand, and thus investment, throughout the last two years.

Main obstacles

These years have appeared fruitful for those raising private capital. However, as with most disruptions, the entire education sector is gradually returning to its normal course. Edtech companies are now facing new challenges, on top of the existing pressure from competitors.

The investment boom in the past years in the sector that has always been undercapitalised has led to a generation of startups with no reference points. New companies with millions in investment must now keep up with the market growth while adapting to new realities. As offline learning has become an obvious and better alternative, there’s pressure to constantly come up with new and improved features.

“In this sector, everybody is young, underdeveloped, and overpromising. Nobody has the full picture,” said Andy Nhu, edtech researcher and lecturer at VinUni. “I often find an app excelling in only one or two functions, or a book interesting in only 1-2 units. The data from each of the apps is not linked to each other. For example, if you learn one word in app A (best for reading), your vocabulary bank in app B (best for listening) remains blank.”

Additionally, most startups that go too quickly from a tool to a necessity experience growing pains in the process. Live-class providers have all learned from the story of Zoom and what was considered an overnight success in early 2020, followed by a series of security and privacy issues.

Since then, Zoom has rolled out different security improvements, including two-factor authentication and a feature to make users aware of whether a meeting is being recorded. However, the disturbance in customer experience has made room for other video conferencing services to thrive, like ClickMeeting, Google Meet, and Microsoft Teams.

Giang Linh, CEO of online learning platform hocmai.vn assessed, “In essence, online education does not depend on geographical location, does not require too much initial capital, and has no limit in terms of scale. A successful model anywhere can easily expand to the international market. However, if product quality is not guaranteed and the brand is damaged, it’s almost impossible to regain customers.”

Continuing innovation

Schools and universities around the country are taking steps towards exploring different models to refine online students’ experiences. Solutions include new learning models and several different platforms, as well as adopting complex technologies such as the Metaverse.

Nhu of VinUni said, “To teach effectively at VinUni, we have to cherry-pick the top solutions from the market in each aspect and try to make them work together in our ecosystem, using a universal gradebook.”

Nhu added, “We are also trying to adopt the Metaverse correctly and offer learners a workable version of the virtual world. It is particularly helpful when our faculty members are working on-site across the country and our strategic partners are presenting all the way from partnered foreign universities.”

As for the private after-school segment, companies with resources are also experimenting with their adaptation of edtech.

Nick Chou, product owner of NPX PA, a multinational education company based in Hanoi, shared that during social distancing, the company has successfully launched its in-house online class system, with almost 2,000 users accumulated in less than a year.

“Classroom-as-a-service platforms optimise synchronous and asynchronous learning by providing teachers easy-to-use tools for creating content and conducting online-to-offline class operations,” Chou said. “It’s an all-in-one system, comprising a learning management system, content management system, and virtual classrooms.”

Data from most sources is projecting promising growth for the sector. Ken Research forecasts that the size of Vietnam’s online education market will reach $3 billion in 2023, with a compound annual growth rate of about 20.2 per cent in 2019-2023.

Le Hoang Uyen Vy, CEO of Do Ventures said, “Vietnam’s edtech market is still in its infancy, and Vietnamese startups need more time to catch up with companies in larger markets in the region. However, the online learning market has huge potential. What’s left is for our startups to develop healthy revenue models towards sustainable growth.”

Quach Thanh Chau - Partner PwC Vietnam Although virtual education has its drawbacks, the demand for tech-focused education will keep growing as the younger generations see the need for reskilling and upskilling in a shorter time span. Adopting edtech will also help foster self-directed life-long learning, which is crucial for the future of work. At the moment, there is no specific legal framework for edtech under Vietnamese laws. Edtech-related businesses now rely on regulations for relevant areas, for example on general education, IT, and e-commerce, which are neither practical nor sustainable. The good news is that the Ministry of Training and Education is aware of these impediments and inconsistencies, and is working on a draft circular for e-learning. Solving these challenges should start with top-down commitment and solid national targets. Danny Hwang - Former chairman of Education and Training Committee, American Chamber of Commerce in Vietnam The global edtech market is expected to grow to over $400 billion by 2025, up from $227 billion in 2020. Web 3 technologies, such as the Metaverse, will be the next major disruptions in the edtech industry. The metaverse is projected to grow to $13 trillion by 2030 and could introduce new learning methods, such as simulation scenarios to construct virtual digital workshops, and provide students with technical guidance and efficient methods. While gamification is not a new trend in education, the metaverse and blockchain solutions will take gamification to the next level by utilising learn-to-earn models. Cryptocurrency and other credits can be used to create reward systems that motivate students and encourage teachers. Smart contracts can also be programmed to issue awards to top performers.