Edtech startups: From perk to necessity


Edtech startups: From perk to necessity
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Schools and universities were among the first institutions that shuttered their doors around the world in the face of the Coronavirus pandemic. According to UNESCO, more than 150 countries have implemented nationwide closures, forcing over 80 per cent of world’s student population, estimated at more than 1.4 billion learners, to stay at home.

These closures have placed unprecedented challenges on governments to ensure learning continuity, likewise on teachers, students and parents. The only viable solution has been e-learning, paving the way for a boom in education technology (edtech) startups.

Across the Middle East and North Africa (Mena), edtech was rarely at the forefront of investment deals prior to the pandemic. Back in 2017, just $2 million was invested in edtech startups in the region, but as schools looked to upgrade their system and incorporate more technology into their curricula, the level of investment rose to $21 million by the end of 2019. The number of edtech startups has also increased, on Magnitt’s database there were just 270 listed on the platform in 2017, but this has now exceeded 800 edtech startups as investors seek opportunities that are proving to be “pandemic-resistant”.

Most recently, the Sharjah Entrepreneurship Centre (Sheraa) awarded Jordan-based Little Thinking Minds a $100,000 equity-free grant to boost its development in the emirate. Three other edtech startups, BoBu, Narrativa and almentor.net were each awarded $20,000 grants.

An Inescapable Need

Various facilities available on digital platforms, which were until now considered as a secondary learning option, are becoming a necessity according to Holon IQ’s Global Education Outlook amidst Covid-19, which states that “the time for online learning has come”.

“There is no running away from education technology,” says Mounira Jamjoom, co-founder and chief executive officer (CEO) at Aanaab, an online platform specialised in the professional development of Arab educators through open learning. “The education sector is being transformed like there is no tomorrow. I see online learning becoming the norm, not the second option.”

The company recently raised $1.5 million in its seed round with participation from Wamda.

Similarly focusing on teacher enablement, UK-based online teaching platform Teacherly, which has presence in Europe and Mena, provides teachers with an opportunity to work collaboratively, fostering a community of peer-to-peer coaching.

“By 2040, 70 per cent of the population will be urbanised and this will have an impact on education,” says Atif Mahmood, founder and CEO at Teacherly. “We did not know this [outbreak] was going to happen, but we already had the vision to promote remote lessons and enable teachers to connect across schools and work remotely. This put us in a really good position now to take a massive leap and grab the opportunity.”

Teacherly has an increase of 30 per cent in the number of leads it is receiving every day. The team aimed to shorten the sales cycle by approaching the middle leadership, who are more receptive and quicker to take decisions. Currently, a big chunk of their inquiries come from principals and CEOs. Teacherly was already present in more than 2,000 schools around the world, and in the first week of home learning, the company onboarded 80 new schools while more than 6,000 teachers and 2,000 students have signed up during the coronavirus period.

“There will be a huge demand post-coronavirus for home schooling, which has been rising significantly year-on-year. This is a lesson to learn during this experimentational process, it has shed more light on home-learning,” adds Mahmood.

Startup Response

Edtech companies are navigating through the situation in multiple ways, from fast response to strategic shifts, product development, scaling and pushing for high conversion rates. UK-based Century Tech, an artificial intelligence (AI) company whose autonomous machine identifies areas that students find challenging and supports them with content to lead them through initially changed its business model and then its product in response to the virus.

“Century is an autonomous machine that essentially learns how the student is learning, so you do not need to sit next to the child. It constantly adapts based on every mouse movement the child makes,” says Priya Lakhani founder and CEO at Century Tech. “This is very fast. We looked at the crisis in January and we changed our model. We then looked at consumer demand and we changed our product.”

Century implemented several infrastructure changes in order to scale up and be able to meet the rise in demand.  

“[The outbreak] also affected the business model itself. At Century, we suddenly got an influx of parental interest. While the schools are using a standard LMS [learning management system], the parents are working and cannot sit next to young children all day to go through a scanned textbook, print it, take pictures of their child’s learning progress and send it back to teachers,” says Lakhani.  “A lot of parents started reaching out to us asking to have access for their kids, so at least for one or two hours a day they are supported by AI.”

This is a welcome respite for many parents juggling their own work with their children’s education.

“Parents are much more involved now with their children’s day to day education. We operate mostly in schools, but as a result of this distance learning we saw much more engagement from parents on our platform,” says Rama Kayyali, founder and CEO of Little Thinking Minds. “A lot of parents now are thinking why are we paying crazy amounts of money for schools? This is a great opportunity to up our game.”

Little Thinking Minds creates advanced digital solutions and platforms aimed at improving learning outcomes. It is also geared to help teachers manage their classrooms remotely.

Regional Inequality

“We had some schools who we were not able to reach before, now coming to us after realising the importance of edtech solutions,” says Kayyali. “At the same time, some schools are worried and freezing purchasing decisions until things are clearer. We have heard of plans for schools mergers and closures.”

The online learning readiness of schools and universities varies across the region. Governments in the GCC embraced the technological progress of public schools early on and private schools that charge hefty fees were already well-prepared with edtech solutions.

“Not a lot of schools could afford having the online component, but today schools and governments have no choice,” says Dina Shawr, CEO at Adam Tech Ventures, which recently invested in Jordan-based online learning platform Abwaab. “Investors in general do not like edtech because it is a volumes game and the multiples on it are low, the more students you have, the more traction you can achieve and the higher valuation you can get. However, the engagement numbers today are unbelievable, no one had expected this in such a short period of time.”

But investors and governments needs to be aware that online learning goes beyond providing students with a laptop and tablet and offering online tuition or education videos. The efficacy comes down to the technological infrastructure of the country and access to the internet. With the uptake of digital learning as an alternative solution for providing education to students at home higher than before, internet and servers capabilities need to be boosted in order to keep up with the surge in users.

“Going forward, the majority of the education sector would have understood how to use these technology effectively. The big challenge for ministries of educations around the world will be how to ensure that every child has access. There is always going to be this small percent of the population that do not have strong enough bandwidth, nor access to devices,” says Lakhani.  

The education sector has witnessed a paradigm shift in both learning and teaching that calls for public-private partnerships more than ever. Governments can avoid reinventing the wheel by working with edtech companies that already came a long way.

Moreover, many startups are looking to form partnerships with others working in the same field. With the demand rising for a holistic solution, there are a lot of edtech companies who seek to join hands as a conglomerate.

“Edtech companies that are rising to the challenge have to think about their cost-base. They should consider benefiting from government schemes and be as smart as they can to get through this time by mitigating the risks as much as possible,” says Lakhani. “Companies are thinking about how they can [grow] not just to thrive, but to survive. If people are not radically thinking of how to change their business right now, they are on the route to failure.”



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