The EdTech Episode #8
Welcome back to our newsletter.
We periodically highlight China's large and well-funded EdTech sector, but funding conditions have changed dramatically for Chinese startups over the past year. From a peak of US$41B in the second quarter of 2018, Chinese VC investment fell almost 80% to US$9B in the second quarter of 2019. For startups, this has meant tougher terms from investors (paywall) and a shift in mentality away from "growth at any cost". The EdTech sector has not been immune, with VIPKid reportedly (paywall) struggling to raise a new round.
Perhaps the lesson is that while fundamentals are structural, funding is cyclical and hence, difficult to predict. On the other hand, forces such as attitudes to education, willingness to spend on the right EdTech product, and rising Internet penetration will likely remain relevant for years to come.
Peter Sahui
Senior Associate, Navitas Ventures
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