Upgrade Yourself
Economic Empowerment's Biggest Opportunity is Self Education
Nadiem Makarim - co-founder & CEO of GoJek and now education minister of Indonesia changing national exam policy
The curious role of Government in creating the conditions for EdTech to flourish
A strange thing happened when Nadiem Makarim, the CEO & Co-founder of Gojek, the $10BN-valued Indonesian SuperApp decided to step down and join the government. Why would such a pioneering technology founder suddenly give up on his perch of the most dominant technology company in Indonesia for something as unglamorous as government?
Weeks later he surfaced as the Minister for Education and Culture for Indonesia, and set his first of three wide-ranging policies - to abolish the national exam by 2021 given to middle school students in order to radically improve the quality of teaching.
Paul Graham, the co-founder of Y Combinator, in his 2019 essay “The Lesson to Unlearn” declared that tests were the one impediment to true learning. With such governmental stimulus for accelerating EdTech adoption, combined with a projected 150m internet users accessing information on their mobile phones by 2023, Indonesia’s self-education market is about to blow up.
Ruangguru is an EdTech pioneer of Indonesia, already valued at over $1BN
The signs are already there. Ruangguru - an Indonesian self learning app - claims to have 15m students and 400,000 teachers registered, and has already expanded beyond Indonesia to Vietnam - it’s international expansion driving a $100m financing from General Atlantic which will push this Indonesian EdTech giant into the Unicorn club. And guess what - Ruangguru’s 29-year old founder - Belva Syah Devara - is also one of the new advisors to the President of Indonesia.
CEO & Co-founder Belva Devara introduces Ruangguru and it’s focus on leveling up the Indonesian economy through self learning independent of status or schooling.
Iman Usman - co-founder and Chief Product Officer, illustrates the journey in building Ruangguru, from being the first in his family to obtain formal education, and leading the company from starting in a distributed manner from Stanford/Columbia university dorm rooms to growing to 500 employees in Jakarta and beyond.
The combination of educational access, mobile phone penetration, willingness of users to pay make EdTech a totally different proposition outside the US.
Ruangguru isn’t the only company using the mission of economic self-empowerment to build a strong business. Promising upstarts like Pahamify in Indonesia - which started off as a YouTube channel and is taking a more interactive and gamified approach to learning are betting that they can get millions of users by charging subscriptions that range from $3.50-$18 per month.
In India, the market for self education is even more evolved. BJYUs, a self education app, claims to have achieved profitability with 40 million registered users, and 2.4 million paid subscribers. The company generated $200m in annual subscription revenue in 2018 and expects $440m for the year ending March 2020. BJYUs last valuation was $5.4B making it the most valuable EdTech startup in the world. By contrast, Japan’s Benesse Holdings can act as a proxy for the kind of scale that can be achieved - as a publicly listed Education company that has $3.9B in annual revenue.
BJYUs valuation and funding against the top EdTech startups in the world.
Bringing the highest quality educational delivery via technology will distribute economic opportunity from top-tier cities to villages in India and beyond.
The most important impact of educational technology are new ways to broaden access without teachers or access to good schools. Video and a post-reliance Jio internet changes this. Startups like Doubtnut, are taking a more innovative way of driving learning outcomes. A user can simply point their camera towards a mathematics equation they are solving, and the app comes back with video explanations by teachers. The company applies natural language processing, and computer vision to retrieve a relevant video. The company claims to be the largest search index of video math solutions in the world.
Demo of Doubtnut app
Vedantu, a live-tutoring marketplace, brings the addictiveness of catching a livestream and answering quizzes to 15m registered users and 150,000 paid subscribers. The company claims 80% of registered users are in tier 2 cities and 55% of paid users are in small towns — access to high quality teaching for grades 6 through 12.
Unacademy, which is also a marketplace for exam prep that connects the lessons of 10,000 registered tutors and 13 million learners every year. According to Unacademy co-founder Gaurav Manjal 50% of users are outside the major cities. Both Vedantu and Unacademy have raised $42m and $50m respectively, which makes sense in a market where the largest population of 5 to 24 year olds in the world is in India.
The Rise of EdTech in Asia is a huge opportunity
In the West, education technology has struggled to achieve the status as an economic equalizer that countries like India and Indonesia have established. With widespread and cheap mobile internet access, the largest populations of users between 5 and 24 in the world, and widening need for educational access for economic mobility we will see most valuable companies in this sector will continue to be built outside of the US and operate at a scale that can’t be matched, while creating profitable business outcomes. I look forward to discovering more of them.
References
[1] Profile of Nadiem Makarim - CEO of Gojek from Forbes 40 under 40
[2] Nadiem Makarim abolishing National Exams in Indonesian highschools by 2021
[3] Paul Graham of Y Combinator on the lesson to unlearn
[4] Ruangguru raising $100m from General Atlantic from Deal Street Asia
[5] Indonesian President appoints CEO & Founder of Ruanguru to government advisory board from DealStreet Asia
[6] Pahamify’s new app aims to create a new interactive way of learning in Indonesia
[7] How Byju Raveendran built BJYUS into a $5.5BN EdTech Giant from Forbes
[8] E-learning apps have nothing on traditional teaching from India Today
[9] Benesse Holdings - A Japanese Education Giant with $3.9BNin annual revenue