EXPERT EYE
The Edtech Revolution The global pandemic put digital learning in the spotlight and the education technology boom ensued, with Asian companies leading the way. And the market is showing no signs of slowing down Written by: Roger James Hamilton, CEO, Genius Group
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he world has seen the adoption rate for new technologies accelerated considerably as a result of events such as the COVID-19 pandemic before. For example, the SARS crisis of 2003 contributed to the boom in China’s ecommerce industry, as quarantines led consumers to shop online. Certainly, this market trend did not slow down once quarantine restrictions were lifted. Ever since, global online sales have risen exponentially. The same story is emerging in the edtech market. Within the past 12 months, all the industry’s biggest funding deals have been in Asia. Byju, India’s largest edtech company now has a $12 billion valuation following a $500 million funding raise in September 2020. Surpassing Byju is China’s edtech giant, Yuanfudao, the live tutoring app, which reached a staggering $15.5 billion valuation last October, nearly doubling its valuation seven months prior to that. In just two short years, the company doubled its total users to 400 million students across China. In two years’ time, the edtech market in China is estimated to be worth $81 billion, according to research firm iResearch. With China’s next largest online education company Zuoyebang, being valued at $10 billion, the world’s top three edtech unicorns are all headquartered in the Asia Pacific region. Compare these figures to the 8 | APAC Outlook issue 49
ABOUT THE EXPERT Roger James Hamilton is a world-renowned futurist, New York Times best-selling author and co-founder of Genius School. Genius School is the world’s first global, virtual school providing a full curriculum designed to nurture entrepreneurs, artists, changemakers and global citizens. Roger is also founder and CEO of Genius Group, the world’s number one entrepreneur education group. Genius Group is a multi-million-dollar group of companies leading the entrepreneur movement which includes the global edtech company GeniusU, education curriculum company Entrepreneurs Institute, and Entrepreneur Resorts Limited, the world’s leading group of entrepreneur resorts and coworking spaces.
largest education technology firms in the United States, Udemy at $3.3 billion and Coursera at $2.5 billion, the difference is huge. Which begs the question: why are Asia’s edtech companies up to 10 times bigger than their US counterparts? The answer is threefold. 1) The number one difference is that the largest APAC online education companies are creating their own curriculum and courses. Compared to the likes of Udemy and Coursera in the US, which act as platforms for their partners’ content, whether these are educators (as with Udemy) or education institutions (which is the case with Coursera). As a result, the firms creating their own curriculum and courses have net revenues of between 80 percent and 100 percent of their gross revenue. Compare this to net revenues sitting at just 10 percent to 30 percent of gross revenues for edtech companies in the US and the contrasts in valuations become apparent. We are looking at two distinctly different business models. 2) Couple this with the fact that the curriculum and courses the Asian unicorns are delivering are central to the needs of the students, which means they are taking a bigger slice of the education pie. They are focused on test prep and certifications. Whereas many of the US platforms work around the accreditation system – Udemy, for example, does not provide courses that give school or university credits. This is changing in the US,
