EdTechs are in demand in SEA, but their journey is not one without challenges
The Southeast Asia region has seen a digital transformation, with internet connectivity increasing significantly over the past few years. With a population of about 700 million, there are over 440 million internet users in ASEAN.
When Covid-related lockdowns increased school dropout rates, affecting 140 million students, EdTech startups stepped in. Now a similar initiative is being taken for adults as well, considering the dearth of job-relevant skills such as English fluency, digital marketing, and data analytics. Today, EdTech companies are slowly but surely changing ASEAN’s education landscape.
Number of EdTech startups in ASEAN
Country | No. of EdTech startups (2020) |
Singapore | 421 |
Indonesia | 291 |
Vietnam | 209 |
Malaysia | 172 |
The Philippines | 108 |
Thailand | 82 |
Source: Kaizenvest and EdTech Asia report, sourced from Tracxn
What EdTech startups offer
So far, K-12 focussed EdTech companies such as Indonesia’s Ruangguru were prominent since they made education accessible to all children. However, there is a bigger business category emerging in the form of adult education.
Take Thailand’s SkillLane for instance. The EdTech firm offers self-paced learning to young adults and working professionals. Local corporations have also partnered with the platform to train their employees.
Another one is the Philippines-based AHA! Learning Center, which uses low-bandwidth text-based foundational literacy and numeracy classes through Facebook Messenger. Vietnam’s Topica provides online English language learning for adults and has partnerships with universities that offer online bachelor’s degree programmes.
The Taamkru app in Thailand and Pandai in Malaysia provide gamified learning to students, making learning basic concepts of science and maths fun.
These are only a few names from a growing list of 500+ EdTech companies that are trying to breach the many gaps in education. And their demand is growing, but the companies have to still overcome several challenges the region poses.
What are they?
While the startups have received significant funding, the nonuniform availability of underlying infrastructure poses a significant challenge. Internet penetration has increased, but some regions do not have proper electricity. Poor teacher quality and teacher training is another issue, as is the lack of common standards for teaching and learning.
| ||||||
| System Structure | Strength of reform agenda | Govt. partnership with private sector | |||
| National power | Local power | School power | Commentary | ||
Indonesia | High | High | Low | Decentralized, with education in the hands of the state, but in practice policy is still driven nationally | Clear and ambitious reform agenda. But challenges with execution | Govt. open to partnering (especially with local partners) |
Malaysia | High | Low | Low | Federal system but still centralized. Efforts underway to decentralize and give more autonomy to schools | High level reform agenda, focused on bumiputra system | Openness to partnering, particularly with Malay businesses |
Philippines | High | Medium | Low | Very centralized system, although local govt. gained more influence during COVID school closures | Relatively recent, and limited, reform agenda around ICR | Opaque- some partnering with major international players; large-scale PPP for school vouchers |
Thailand | High | Low | Medium | Centralized system, although schools have some autonomy on-procurement of teaching aids etc. | Ambitious cross-sector reform agenda around ICT |
|
Vietnam | High | low | Medium | Highly centralized (single party state) | Clear, strong, ambitious education policy |
|
Source: Edtech in Southeast Asia report by MIT Solve and Octava Foundation, based on expert interviews | ||||||
According to a study by Massachusetts Institute of Technology (MIT)’s Solve, Indonesia has good government support, but EdTech startup founders are generalists and lack education sector expertise. Malaysia, which enjoys near 100% electrification, has weaker human capital when compared to other nations. And the Philippines sees resistance from teachers in EdTech efforts. Till governments and companies come together and solve for these issues, the struggles to access education will continue.
EdTech on the rise
Offerings from large players like LinkedIn may have increased the demand for soft skills programmes for professionals, but Southeast Asia’s EdTech startups are solving problems at the grassroot level. They enjoy the home advantage, speak the local language, and understand cultural nuances, and the unique challenges of each country. And this is where they score well.
EdTech startups are bringing education to every phone/laptop screen, but it’s a long road ahead for most. Their work is important, and these innovative business models are a step in the right direction.
Ishaan Malik is our Head – Client Relations (ASEAN and Australia). Through his prior experience at TCG-Digital, Ernst & Young, and Clearwater Capital Partners Ishaan has gained experience in Sales, Marketing and Risk across a diverse set of industries, thus affording him an eclectic knowledge base to support our clients’ aspirations in ASEAN.
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