Mena's EdTech sector primed for growth amid pandemic

The training technology sector has become an “attractive and promising new market” for capital raising investors, especially in the Mena region, as the Covid-19 pandemic accelerates shift to digital education, according to a fresh study.

Globally, EdTech companies received an enormous $8.3 billion in the first three quarters of 2020 alone, Dubai-based venture capital firm Global ventures said in its inaugural EdTech research report.

“The EdTech sector started the last decade with $500 million of venture capital investments this year 2010 and finished 14 times higher at $7bn in 2019,” according to the report.

The EdTech industry has played an integral role in ensuring continuity of education at the same time when physical schools had to near to support the spread of the coronavirus pandemic.

Emerging markets attracted the lion’s share of investments this past year, with India surpassing the united states in capital allocated. Although only $30m was invested in EdTech companies in the Mena region in 2020, investment is defined to improve steadily from a minimal base, according to Global Ventures.

“EdTech is defined to grow consistently within the next decade,” Noor Sweid, founder and general partner at Global Ventures, said. “From early childhood to lifelong learning, opportunities to improve access, quality and affordability of education and redefine them, are many and immensely exciting.”

The next decade will be crucial for EdTech businesses in emerging markets. Supportive government policies and technology may even mean emerging markets potentially "leapfrog the developed world”, she added.

In the Mena EdTech landscape, start-ups are focused mostly at the K-12 level and specifically, in the web learning space. The tutoring market can be rich, with 69 % of Egypt’s state school students counting on private tutoring, underlining the growing culture of supplemental learning. Early and higher education segments, however, remain underexplored in the Mena region, in line with the report.

“As all of those other world moves toward personalised and adaptive learning, and focuses on learning outcomes, start-ups in your community are simply scratching the top with regards to addressing the product quality gap in education,” the report said.

“In regions just like the GCC, the digitisation of business and industry is defined to continue in to the near and far future, translating right into a growing dependence on upskilling, reskilling and frequent professional development. Yet, the continuous learning market continues to be in its infancy.”

The global expenditure on education and training was valued at $7 trillion this past year. Since 2010, the industry is continuing to grow by 70 % and is projected to be worth $10tn, adding to about 6 % of the worldwide gross domestic product.

However, the industry took popular this past year as Covid-19 pandemic forced school closures, affecting almost 1.6 billion pupils in a lot more than 190 countries, underling the need for imparting quality education through online platforms and hybrid style of education.

The pandemic has recently accelerated investment in EdTech start-ups. Investments the education sector ventures amounted to 5 per cent of most deals in the Mena region in 2020, accounting for 3 per cent of total $1bn invested by VC firms, the report cited data from start-up portal Magnitt.

"While the number is relatively small, it is growing rapidly … in the Covid aftermath, EdTech’s funding share in Mena is poised for accelerated growth,” it said.

EdTech initiatives could also receive a boost from the changing dynamics in the work market.

Globally, about 75 million jobs are anticipated to be displaced in the coming years, with digitisation forecast to create 133 million unique jobs. It really is anticipated that 65 per cent of today’s primary school children will eventually work in jobs that don’t yet exist.

As a result of evolving nature of the present day economy, a university graduate in the 21st century university changes careers five times within their first a decade of employment.

“Not only is this presenting an urgent dependence on K-12 and advanced schooling institutions to revamp curricula, additionally it is feeding a worldwide upskilling and reskilling imperative,” the report said.

“The way we view it, EdTech will continue steadily to grow … at Global Ventures, we are optimistic about the possibilities in this space.”