Navigating a post-pandemic edtech market

The inevitable need for e-learning over the past year has given a boom to the education technology (edtech) sector that many expect to be sustainable. Globally, $ 16.1 billion was invested in edtech startups last year, up from $ 7 billion in 2019 according to Holon IQ. There are now 26 edtech unicorns around the world, including Kajabi, a US-based business-driven coaching platform that raised $ 550 million last year and China-based startup Zuoybang. supported by Softbank, which offers schoolchildren online and live lessons, which raised $ 1.6. billion in a round of E series.

In the Middle East and North Africa (MENA) region, enthusiasm for edtech crystallized as a result. Investors have started to take note, with $ 30 million invested in Mena’s edtech startups in 2020 according to a report by Global Ventures, up from $ 21 million in 2019. So far this year, Mena’s edtech startups attracted $ 14.7 million in venture capital across 12 startups. , as well as an outing – that of Ostaz of Lebanese origin, formerly known as Synkers.

While this level of investment looks promising, ticket sizes are still small in this industry, with just three startups attracting checks above $ 1 million.

Now that schools and universities have reopened and amid surrounding fears of a shrinking market, edtech startups are aiming to customize a pandemic-led market to maintain growth after the lockdown. The localization of software solutions, the development of integrable B2B models, and the diversification of school-aged academics and adult development are driving the region’s growing ecosystem.

Back to school

Mohammed Alashmawi, co-founder of the US-based Learning Management Solution (LMS) Classera believes Mena’s edtech wave is just beginning.

“When you digitize you don’t expect things to be back to normal or 10 years back just because schools are reopening,” he says. “We will see a change in industry, schools and government departments will use digital learning as mandatory and essential, not a luxury feature.”

Launched in 2012 in the United States and Saudi Arabia, Classera quickly became a market leader in 2015 after its “One Nation Initiative” to virtually integrate Saudi schools in the war-affected south of Yemen. The initiative created the “largest fully virtual school in the Middle East with around 100,000 students,” as Alashmawi explains. During the pandemic, Classera became the software of choice for ministries and schools in 30 countries with its “two-hour” integration tool.

With an emerging edtech market supported by both government departments and fund managers, regional startup founders are betting on the accelerated adoption of technology by the population to pave the way for a growing movement. But edtech startups still face cultural perceptions around the credibility of e-learning.

“One of the challenges for edtech startups is to change the mindset of parents,” said Hamdi Tabbaa, co-founder and CEO of Jordan-based edtech Abwaab, who raised a round of $ 5.1 million last March.

“Parents want their children to learn the same way they learned, in person and with a unique approach. Students at this age change behavior quickly, but parents need to understand the value of technology, adaptive learning, and AI; it is a challenge and it will take time to become widespread, ”he explains.

Where parents tend to feel comfortable is online tutoring, a a market of several billion in the world that startups like the Lebanon-based peer-to-peer (P2P) platform AlGooru hope to capitalize on.

“The tutoring industry in Saudi Arabia is very expensive, the average expenditure of a single household in Saudi Arabia for tutoring is 6,500 SAR and it is around 40,000 SAR per year,” said Khalid Abu Kassim, founder and CEO of AlGooru, who describes his platform. as a “one-stop-shop for mentoring”.

Launched in 2017, AlGooru offers 230 topics for Lebanese and Saudi Arabian users who can access over 150 tutors. It won the TAQADAM4 accelerator program last year and is currently planning to expand to eight additional countries in the region, backed by Saudi angel investors as part of a pre-seed round it plans to expand. close soon.

The new S-curve

For Mounira Jamjoom, co-founder and CEO of Saudi Arabia-based online professional development (PD) platform Aanaab, the edtech market is still shaping up as the founders attempt to determine what business model could support a post world. -pandemic. There are several approaches, from freemium subscription or payment-only models for certificates, the “right” monetization model for the region remains to be determined.

“There is an era that has just ended, the S-curve is over and we have to start a new one,” she said. “It’s hard to monetize edtech and I think a lot of companies are looking at different models. Those who truly understand what schooling and education will look like in the future will be selected. If you are able to figure that out and get the right fit for the product market, I think it’s up from there. “

For many startups, integration into the B2B sector, a market expected to reach $ 20.9 trillions in the world by 2027, presents an excellent opportunity to locate their growth.

“A lot [of founders] go B2C but a lot of successful edtech companies are B2B. If you watch Coursera, it’s B2B, ”says Jamjoom, referring to the US-based professional development platform Coursera which raised $ 130 million in a Series F last year, boosting its funding. total to $ 443.1 million. The startup filed for an IPO on the New York Stock Exchange last March with a market cap of $ 5.9 billion.

Aanaab launched its new B2B model in January as part of a pre-series A plan, joining Classera’s mission to join the movement with its eight new B2B and B2C products. These include an enterprise resource planning (ERP) product to cover corporate HR and inventory services, a fintech product called C-pay to facilitate the payment of tuition and school expenses for students. students, and a new “B2B2C” product called C-spaces to enable “schools [to] start selling courses to students who aren’t officially enrolled with them, ”says Alashmawi, who compares the product to US-based edtech Udemy.

Lifelong learning

These regional startups operate within a global movement where emerging edtech unicorns around the world define three defining characteristics: they provide continuing education platforms for adults, they feature “famous” teachers, and they are highly integrable. as a B2B model. The success of the US-based MasterClass offering video lessons by Gordon Ramsay, Alicia Keys, Serena Williams and other celebrities and athletes is an example of a potential increase in high-quality, exclusive content platforms, taught by celebrities. MasterClass raised $ 225 million in its Series F last May from 18 U.S. and global investors, bringing its total funding to $ 461.4 million over its nine years of operation.

With the gradual increase in flexible and remote working globally, adult-focused professional development and development services like those at MasterClass present a reassuring market opportunity. As the market for alternative credentials grows, lifelong learning and corporate training programs are expected to compensate 15% total education spending of $ 10 trillion in 2030.

This is a segment that UAE-based Almentor is targeting with its Arabic video e-learning platform. The startup, which raised $ 6.5 million from Partech in May this year, offers both a B2C and B2B solution. For the million registered users on its platform, almentor offers courses for $ 20-30, with the intention of introducing a subscription model to provide users with access to all of its 12,000. video content. For companies, almentor adapts its training videos to employees and has been working since 2016 with 78 different companies to offer this training.

While there is certainly a demand and need for more educational content in Arabic, for the Saudi Arabia based test preparation app Baleegh, language specificity is a challenge for edtechs in the region.

“When we started exploring the market with Baleegh, we looked at adult training and certification programs, but we knew language would be an issue as we would localize things like coding and computer programming to offering content in Arabic and that wouldn’t make sense, users will end up using English in their actual daily practice, ”said Rawan Al-Matham, co-founder and CEO of the app and platform of test preparation based in Saudi Arabia Baleegh.


The strong government participation is particular to the edtech space which, even globally and in the thriving Chinese and Indian edtech markets, is intensifying competition for private e-learning startups.

Government universities are also entering space in Saudi Arabia as King Abdullah University of Science and Technology (KAUST) signs new partnership with US-based open source edtech Edx to deliver its first online course open and massive (MOOC).

This leaves local edtechs, driven by the country’s push to nationalize the education sector, with the need to work alongside government entities for now.

“As the first platform in Saudi Arabia with accredited professional development hours, regulation for Aanaab was a barrier, but if you want to innovate you have to work closely with regulators to make sure they understand your business model, ”says Jamjoom,“ It’s working together with governments that is what drives our success.

There is, however, a lot to be done when it comes to edtech regulations, as Jamjoom points out “everyone learns”, but feelings among the founders of edtech tend to be positive.

“The biggest challenge is already over, that of convincing schools that digital education is compulsory,” says Alashmawi, “The pandemic has happened to accelerate digital education and now [after schools reopened], ministries, educators and school owners will no longer take this risk and will not cancel their agreements with e-learning platforms. They now know that it is a mandatory thing to have digital learning.

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