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The EdTech Episode #5

Our Navitas Venture Scout Perspectives continue to provide on the ground insights from the major EdTech markets; the US, Europe, China, ANZ, and for the first time this month - South East Asia.

To date a lot of developing EdTech market focus has been placed on China, and increasingly India, due to their large populations, massive education and workforce training requirements and appetite for technology backed solutions. This can leave a region like South East Asia to be somewhat forgotten, despite having a population of more than 640 million people and some very progressive education development goals.

Our first SEA perspective includes an interview 
with one of the region’s most successful EdTech entrepreneurs Adam Brimo. Adam is the CEO of Open Learning, the number one MOOC platform in Malaysia, and he provides his perspectives on the EdTech market and on the region in his discussion with our Venture Scout Mick Liubinskas.

When we completed Project Ecosystem, we were surprised about the low level of EdTech maturity in SEA (when compared to other international cities) given the underlying potential of the region. The good news is that this is changing fast, and a number of education, government and financial entities are coming together to create a regional hub for EdTech development out of Singapore.

We expect to release more information in the coming months, so watch this space, but we also recommend you get along to the excellent EdTech Asia
 Summit at the start of August to learn more.


Tim Praill

Head of Navitas Ventures

Market News
JMDEdu has reviewed the US$5.5B adult English education market in China, drawing a contrast to the better-known market for children's English education.
Company/Institution News
GSX Techedu, a Chinese online tutoring company, has filed for an IPO in the US.

InStride, the workforce education company, has secured its first Australian partner, UNSW.
Coursera, the MOOC platform, has raised a US$103M Series E round. SEEK Group led, investing approx. A$50M. With a reported valuation now over US$1B, Coursera has joined the fairly exclusive group of EdTech unicorns.

Examity, an online proctoring company, has raised US$90M from Great Hill Partners.

SEEK Group has also invested A$92M in FutureLearn, the Open University's MOOC subsidiary.

Onion Mathematics, a Chinese K-12 online maths platform, has raised RMB300M (approx US$45M) in a Series D round. Primavera Capital led.

A Cloud Guru has raised a US$33M growth equity round. Summit Partners led.

Labster, a digital lab provider, has raised US$21M in a Series B round. Owl Ventures led.

Cluey, an Australian tutoring startup, has raised an A$20M Series A round. Allectus Capital and the Thorney Investment Group led.

PandaABC, a China-based online English education company, announced that it raised a RMB100M (approx US$15M) Series A round in December from Shunwei Capital and Eastern Bell Capital

HeyJobs, a German tech-enabled recruitment platform, has raised a US$12M Series A round. Notion Capital led.

CollegeDekho, an India-based HE discovery portal, has raised a US$8M Series B round. Ginarsoft and Man Capital led.

LeQuest, a Netherlands-based provider of training for healthcare professionals, has raised €7M. MedFinance, Innovation Quarter, NextGen Ventures, Noaber Ventures, and Philips Health Technology Ventures took part.

Cengage and McGraw-Hill have agreed to merge in an all-stock transaction. The merged group will be the second-largest US textbook publisher, with a valuation estimated at US$5 billion and annual revenue of US$3.16 billion.

Kahoot has acquired Dragonbox for US$18M in cash and shares.

Wiley has agreed to acquire the assets of adaptive-learning provider Knewton. No terms were disclosed.

Gridiron Capital has bought Colibri Group, a provider of online professional development.
New Funds

Rethink Education, an EdTech-focused investor, intends to raise up to US$150M for its third fund according to an SEC filing.
Final Thoughts

The potential for a protracted China : US trade war has continued to heat up, with President Trump raising tariffs on $200 billion of Chinese goods last Friday and China retaliating overnight. With markets tumbling and both premiers not expecting to meet again until June, the global economy is set for a bumpy ride.

Although it is widely viewed that “nobody wins a trade war,” the reality is more nuanced, with increased trade barriers impacting global economies and sectors to varying degrees.

Goods and services implicated in the tariffs will face an immediate hit to their competitiveness, but the reality is that these bilateral actions have far reaching and often unintended consequences. For example, Asian economies engaged in the intermediary trading of machine parts and electronic components between China and the US are particularly vulnerable, while German Car manufacturers (at first glance a potential beneficiary of the dispute) are exposed due to their significant U.S. manufacturing capacity serving the Chinese export market.

Although you can expect short sellers to become increasingly active, it is not all doom and gloom with some sectors expecting to benefit. For example, alternative international education markets could become increasingly popular if the trade war crosses over to impact the study choices of Chinese Students or US immigration decisions. In summary, no market, not even education, is likely to be immune from a China : US trade dispute, so it pays to track events closely and scenario plan impacts, to effectively navigate a path through this period of uncertainty.

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