3 Things EdTech Founders Need to Know

The Nigerian start-up space has received a lot of attention in recent years, with well-publicized investment rounds for companies such as OPay, which raised $50 million from investors and Gokada, which raised $5.3M for its motorcycle start-up. In the past, online retail store Konga.com reportedly raised $25 Million and tech fintech firm, Paga raised $10 million in funding.

 These astronomical figures are highly tempting especially in an economic climate like Nigeria. There is no doubt that a lot of ambitious and entrepreneurial individuals would have thought of an idea they can take to the market, gain traction, raise funding to scale, and ultimately exit in the most financially rewarding way.

 While a lot of these start-ups seem to emerge from industries such as retail, transportation and most commonly Fintech, EdTech is a niche that is coming into prominence with a huge market, and the ability to make the single largest impact on a generation. Koïchiro Matsuura, Director-General UNESCO said “When financial systems fail, the consequences are highly visible and governments act. When education systems fail the consequences are less visible but no less real. Unequal opportunities for education fuel poverty, hunger, and child mortality, and reduce the prospects for economic growth. That is why governments must act with a greater sense of urgency.”

 The Nigerian Investment Promotion Commission describes EdTech as, “a fast-rising start-up Industry evolving into a multi-billion-dollar industry and introducing fast and innovative ways of communicating and learning thus enabling people to be in any location of their choice to learn or get tutored online.” There are a few players in this space, but unlike Fintech or Retail, it is far from being saturated. This makes it an exciting area for innovative entrants.

Despite the attraction to speedily prototype your product and attempt to seek funding, research is key in this industry and the facts are both sensitive and daunting. To stand the best chance of success as an innovator in this space, these are the top three things I recommend:

1. Firstly, your business plan. Wikipedia describes this as, “a formal written document containing business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved.” Some will say until you have a good business plan, you may never be taken seriously, but the reality is, how do you know that your idea is viable without a business plan? This document is more for the entrepreneur than anyone else. It proves beyond a reasonable doubt that you have adequately explored the product, the industry, and the potential, and you are able to articulate it, defend it and ultimately execute it. Business plans can vary from multipage documents to single pagers, and there are vast resources online that can provide templates. However, be sure to cover and elaborate successfully on the opportunity, industry and market, your strategy, and the team, as well as your marketing, operational and financial plan. Seek professional help on this if you must. It should be done right!

 The expectation now is for technology to improve learning and engagement as the world becomes more digitalized and data-driven. The use of data, predictive analytics, and artificial intelligence technologies also enable learning experiences to become more customizable.  For instance, India’s BYJU’S uses big data analytics to create a personalized experience for its customers by offering unique learning journeys, guided paths, actionable feedback and recommendations while Nigeria’s Prep class offers a tailored approach. As the industry steadily moves towards digitalization, known as the Massive Open Online Course (MOOC) space, the sector is gaining investor attention. In the past decade, companies like Coursera, the largest of the MOOC platforms, raised $102 million and increased its valuation to more than $1 billion. It is, however, important to note that while the data shows an unparalleled adoption of internet technologies by Nigerians, particularly through mobile internet making this a generation of “mobile-first” Nigerians, more than half of the world’s population is still offline.

1. Secondly - funding. This is a costly industry to penetrate and the high cost of the internet in Nigeria means that not only does your product have to be well designed and useful, but it must also be easily accessible. Creating awareness for this will cost money. While there is access to funding and grants for innovations in the EdTech space, to have a working prototype, you will need to raise funds from angel investors, family and friends, and even your personal savings. Also, it looks good to potential investors if you already have some skin in the game. My advice is to start planning for this. Before you start asking for funds, know exactly how much money you need and why you need that much. Itemize it!
2. And lastly, articulate your brand. Typically, your brand will come into play during the marketing phase of your business’s development rather than the fundraising phase. However, a strong brand can help sell the viability and necessity of your business to potential investors and your customer base. It’s a demonstration of identity that can concisely and creatively drive your idea home. Don’t focus exclusively on how you’ll build your business from the start. Chart out your projected growth over the course of the first year, the first three years and the first five years and sell that story.

 Good luck!