Vietnam's Edtech startups keep attracting investors after covid boom

Vietnam's Edtech market held long-term promise, but it wasn't until the disruptions of Covid-19 that it truly ignited. The pandemic-driven need for online learning solutions acted as a catalyst, propelling the market into the spotlight. While some anticipate a potential decline after the immediate effects of Covid-19 subside, the Vietnamese Edtech market continues to sizzle. This sustained heat is attracting significant domestic and foreign investment, indicating strong belief in its long-term potential.

Edtech in Vietnam first emerged around 2006-2007, coinciding with the rise of the internet economy. However, it wasn't until the COVID-19 pandemic (2020-2021) that the need for online learning truly skyrocketed. This surge in demand fueled a significant investment boom in Vietnamese online education.

Despite initial concerns about a post-pandemic decline, the well-established online learning infrastructure has maintained momentum, experiencing healthy growth even after restrictions eased.

Vietnam's Edtech startups see investment surge

The Vietnamese Edtech scene is experiencing a boom in investment, attracting both early-stage and established players.

A recent example is online English teaching platform NativeX. The company secured a $2.5 million USD investment led by Ansible Ventures, BluePrint Ventures, and Northstar Ventures. This follows an impressive initial funding of $1.5 million from angel investors just two months after launch.

NativeX's success in attracting capital stems from its impressive growth trajectory. Within a year, they've conducted over 60,000 classes with more than 70,000 registered participants. Notably, over 5,000 are paying long-term students, including 1,500 senior managers and executives.

Fuelled by this investment, NativeX plans to expand its reach, aiming to provide English learning opportunities for 10 million Vietnamese professionals.

This surge in investment follows a significant deal in 2018, where Topica, a leading Edtech company, secured $50 million USD from Northstar Group. This marked a major milestone for Vietnamese education startups. With the influx of capital, Topica's workforce grew significantly, reaching 1,700 employees. They also invested $3.5 million USD in developing Kidtopi, an online platform connecting Vietnamese children with North American elementary teachers for one-on-one English learning.

Vietnam boasts a history of innovation in Edtech. Pioneering companies like Galaxy Education's HOCMAI platform, established over 15 years ago, have paved the way for online learning across various age groups and subjects. Today, HOCMAI boasts over 7 million students and offers a diverse range of pre-recorded and live online courses.

Following Topica's landmark investment in 2018, a wave of foreign capital has fueled the growth of Vietnamese Edtech startups. Companies like Elsa, MindX, Prep, Marathon, and Vuihoc are just a few examples.

According to Nextrans' report, the Vietnamese Edtech market has grown at an impressive rate of 20.2% from 2019-2023, reaching an estimated value of $3 billion by 2023. Vietnam Edtech's report further highlights the country's position as one of the top 10 fastest-growing Edtech markets globally, with a historical yearly growth exceeding 44%.

The Covid-19 pandemic accelerated the adoption of online education in Vietnam, contributing significantly to the development of the digital education infrastructure. This rapid adaptation positions Vietnam for continued success in the digital transformation of education.

Foreign language learning platform Duolingo recognizes Vietnam's potential. Ms. Haina Xiang, Asia-Pacific Marketing Director, recently stated that Vietnam is not only one of Duolingo's most important international markets but also its largest and fastest-growing market in Southeast Asia.

Fueled by Vietnam's burgeoning online education market, several foreign players are establishing a presence in the country. Last year, Singapore's Geniebook opened a branch in Hanoi, offering personalized learning powered by AI technology. Similarly, Taiwanese platform SAT.Knowledge expanded its reach to Vietnam, bringing a wider range of courses to learners.

Industry leaders anticipate even stronger growth for Vietnamese Edtech in the coming years. Mr. Nguyen Van Hoa, Director of the Digital Learning Materials Development Center, predicts a significant breakthrough in online education, with continued growth expected between 2025 and 2030.

Echoing this sentiment, Mr. Ton Quang Cuong, Chairman of the Faculty of Educational Technology at Hanoi National University, highlights the exciting trend of Edtech development and the surge in investor interest. Recent data reveals approximately 70 investment funds injecting over $400 million USD into Vietnamese Edtech startups.

Several factors contribute to Vietnam's Edtech boom. The country boasts a large internet-using population with a strong commitment to education. According to Bain & Company, Vietnamese families dedicate roughly 20% of their investment income to their children's education, significantly exceeding the 6-15% average observed in Southeast Asia. This combination of high internet penetration and a culture of education spending creates a perfect storm for Edtech growth.

Vietnam's Edtech: Poised for Growth, Awaiting Policy Support

Vietnam boasts a thriving Edtech landscape with over 300 active businesses, according to Tracxn Technologies. With a large student population (over 20% high schoolers), Edtech products for this segment are particularly prominent. Vocational training and skill development solutions also hold significant market potential. Data from Nextrans reveals that Edtech companies dedicate a substantial portion of their revenue to product marketing (25% on average), highlighting their commitment to growth. For startups, this figure sits at 11.5%.

Despite being Southeast Asia's most dynamic Edtech market, Vietnam faces certain legal and policy hurdles that could hinder its long-term sustainability. A major challenge lies in the lack of official recognition for online degrees. This restricts online learning platforms from becoming the primary educational choice for many. However, there are positive developments. The Ministry of Education and Training's regulations on integrating online teaching methods into classrooms demonstrate a willingness to embrace technology. Additionally, pilot programs recognizing degrees earned through online courses offer valuable experience for policymakers crafting future Edtech regulations.

Moving forward, experts recommend creating a more open legal environment for Edtech businesses. This would allow them to collaborate effectively with schools and integrate seamlessly within the existing education system. This collaborative approach, with schools and Edtech companies working hand-in-hand, can lead to innovative solutions and improved learning experiences for students.

The discussion on Vietnamese Edtech extended beyond market potential, highlighting the need for robust content management and collaboration between public and private educational institutions. Experts agree that robust management systems are crucial to protect learners from accessing false or distorted information.

Additionally, a key theme emerged around collaboration between public schools and private Edtech providers. Since the vast majority (97.5%) of Vietnam's educational system falls under the public sector, experts believe fostering partnerships between public schools and Edtech companies is essential for growth. Such collaboration can leverage the expertise of both sectors to create a more comprehensive and effective educational landscape.