Are Investors Interested in Edtech in Southeast Asia?
And What China Has to Do With It
According to a 2018 report by Google and Temasek, the Southeast Asia fintech ecosystem is set to grow rapidly with the number of Internet users in the region expected to double from around 300 million in 2016 to 600 million by 2020. Additionally, the report predicts that Southeast Asia’s Internet economy will be worth $200 billion in three years, with financial services accounting for nearly 30 percent of that figure. Such a vibrant market presents an opportunity for edtech startups looking to lock in on the region’s evolving learning landscape.
But the question remains: Are investors in Southeast Asia’s edtech sector interested in investing?
About a third of APAC edtech startups have raised funding between $10 million and $50 million dollars; however, just under half have raised less than $1 million.
Startups operating in the “K-12” learning space are more likely to raise Series A funding than those targeting “higher education” or “corporate learning.”
The number of edtech startups that were funded in 2017 was slightly lower than the number that received funding in 2016, and nearly half of APAC startups raised funding in 2017. The average amount raised by startups increased from $1.8 million to $3 million.
Overall, the report suggests that while investors are interested in edtech in Southeast Asia, there is still a lot of work to be done to catalyze growth and attract more investment dollars.
While there has been a steady increase in edtech startup activity over the past few years, Southeast Asia remains an underdeveloped region for edtech compared with other parts of the world. I believe that this is mainly due to a lack of startup funding opportunities and the general uncertainty investors feel about the region.
In order for Southeast Asia to be able to compete on a global stage, we have to better understand what drives investor confidence in this market and how to improve it. This report is one step towards achieving that goal.
I am particularly interested in the fact that there is an increasing number of China-based investors playing an important role in the region.
It is interesting to see that Chinese investors are increasingly investing in countries like Indonesia and Vietnam as they look to expand their reach into Southeast Asia. This will be a trend to watch, especially if these countries are able to leverage this investment interest for domestic development.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.