Strategies for increasing Nigerian EdTech unicorns

BY TONY ADEMILUYI

Nigeria – Africa’s most populous nation and by extension largest market – has a huge demand for EdTechs which greatly service this gargantuan appetite for various modes of knowledge acquisition.

The question then is why is there just one EdTech Unicorn – Andela – which was valued at $1.5 billion at the beginning of the year? What is responsible for the absence of more unicorns that arr needed to not only greatly fuel this huge demand for topnotch education in this novel era of technological advancement, but also to massively create the jobs needed to stimulate the ailing economy and keep the beleaguered youths from increasing the ranks of the disillusioned who have long turned to crime and other vices for survival?

India got it right through her visionary public policies which she implemented in the heady days of the 1980’s when she vigorously pursued the ‘Make in India’ Initiative during the leadership of the legendary Indira Ghandi. On August 26, 1983, she announced in the Indian Parliament that the government had abolished the licensing of the consumer and industrial electronic sector which paved the way for the exponential growth of the IT and software sector during the leadership of her son and successor, Rajiv Ghandi.

Software policies went through swift changes to enable fast-paced growth of software export services; and to enable it speedily, Software Parks were subsequently established at Bangalore, Pune, Bhubaneshwar and Delhi.

Many Western economic interests were drawn to India, especially with the fact that English was widely spoken there owing to its British colonial influence, and took advantage of its lower costs and became major customers of the outsourcing industry that was surreptitiously created in the heady days of the 1990’s leading to unprecedented prosperity for the world’s largest democracy.

Ekiti State with the sobriquet – ‘Fountain of Knowledge’ – has the reputation for arguably having the highest number of professors and doctorate degree holders in the country. The critical question to ask is why isn’t there any sturdy public policy to replicate a local clone of Silicon Valley there?

The beauty of the United States is its diversity, in that the Silicon Valley was created in California and not its economic nerve centre of New York. Why can’t the Federal University of Technology, Oye-Ekiti, be elevated to become another Stanford that services the entire technological needs of California to do something similar in Ekiti?

Even the Yabacon in the popular Yaba area of Lagos was created through the grit of tech entrepreneurs and not through any robust public policy, which explains why when the CEO and co-founder of Meta, Mark Zuckerberg, first visited Nigeria in 2016, it was there he first went to before he berthed in Abuja.

A pragmatic public policy can effortlessly transform Ekiti state into another Silicon Valley which will lead many tech companies to go there because the federal government and Ekiti State government would collaborate on smart ways to attract these brilliant minds to come back to the state, which will provide the raw material for the local tech industry to blossom.

The government therefore has a role to play in creating the enabling environment for more unicorns to be created in the country, as even Andela attained that status on the sheer strength of its determination to do so and not through any special government intervention or backing.

The reality of poor power supply is another factor that has greatly stunted the growth of EdTechs. When you factor in the huge cost of having uninterrupted power supply on a daily basis which is prohibitive for most people in the middle class, it discourages a massive investment in online learning which negatively affects the ability of the EdTechs to scale as their potential customers grapple with living from hand to mouth with little or no disposable income.

How then will local and foreign investors be attracted to such a sector where the ROI is notoriously miniscule due to visionless public sector leadership and no fault of the struggling EdTech Entrepreneurs?

The expensive cost of data is responsible for the slow growth of the sector. Many Nigerians going through hell would prefer to use their data to watch comedy skits on Instagram rather than invest in their education online which would invariably translate into more revenue for these EdTechs.

COVID-19 was an eye opener which witnessed the explosion in the demand for online education – a trend which has still stayed globally in this current post covid era. How many EdTech startups are capitalising on this to scale?

I spoke with three CEOs of EdTechs and two stakeholders in the sector and their responses are reproduced below:

The co-founder and CEO of Gradely, which was co-founded in 2019, Boye Oshinaga, had this to say when he was asked whether he set out to build a unicorn from the outset.

His words: “Not initially, no. My primary focus was to contribute to solving one of the major problems in Africa: Poor outcomes in education. I’ve always believed that technology can play a huge part in its progress and I’m happy I’ve been able to prove that.

“From my perspective, I think it’s an issue of investor education, which stems from not enough transparency about growth and momentum in the sector.  There aren’t so many EdTech startups that have gone ahead to show the kind of numbers that vibrant EdTech ecosystems have shown, say in India for example. We’ve raised a total of about $400k.”

The co-founder and CEO of PrepClass, which was launched in 2013, Olumide Ogunlana, had this to say about the startup’s journey.

His words: “When we started Prepclass in 2013 alongside Chukwuwezam Obanor, we were simply young graduates with the ambition to build a phenomenal EdTech company. I was a tutor in university and my partner’s parents own a chain of schools. For us, the ultimate fulfillment was (and still is) improving learning outcomes while ensuring teacher compensation increases. Unicorn status wasn’t really the objective. Online learning is the future.

“GOStudents, the biggest EdTech company in Europe, is doing exactly what Prepclass does. The only difference is that they have better access to online learners across Europe.

“Currently, we aren’t fundraising at the moment. We have been profitable for some time and we prefer to keep it that way.”

Temitope Ogunsemo, the founder and CEO of Krystal Digital, which he launched in 2010 when he had challenges in easily accessing his transcript had this to say: “Krystal Digital started without capital and grew organically with no need to raise outside funding at any point in time. In 2010, we saw the potential to develop a school information system that would not only improve the storage/preservation and retrieval of academic records, but would also position these schools to harness the benefits of digitalisation.

“We built an excellent educational solution, ‘Myskool’ portal, and survived on the proceeds for five (5) years before deploying our Krystal/ Microsoft Imagine Academy.”

In Nigeria, the COVID-19 pandemic catalysed the growth of existing EdTechs, particularly in the e-learning/content distribution and LMS space, and the launch of new entrants, some of which have already secured pre-seed funding.

Speaking on how Nigeria can tap effectively into the EdTech space, industry stakeholder, Chris Uwaje, said: “Nigeria as a knowledge entity is currently deeply challenged on multiple fronts. First, the sociology of things in our knowledge sphere is missing; government policy on education is old school.”

Meanwhile, there are 13.7 million children of school age out of school! Nigeria is perhaps the only nation on record without foreign lecturers and inability to attract them. Generally, IT cannot grow in leaps and bounds to international standards in a nation without specialised institutions for IT.

The COVID-19 pandemic has changed the way humanity thinks, educate, work and deliver entertainment. Education has been central to the human survival strategy to conquer the pandemic. Content authoring, e-learning software solutions, inclusive e-meeting and e-government solutions have taken the world like a positive storm.

India has 107 unicorns and over 500 soonercons. This is the result of their indigenous IT policy and local content strategy. But that was possible because they invested heavily in establishing worldclass software engineering institutes.

We can attain 25 unicorns in 5 years. With accelerated funding and implementation of the Nigeria Startup Act, there is hope.

Another industry stakeholder, Jide Awe, had this to say: “EdTechs can shake up a market that has long relied on conventional approaches. There is a need for public education policies to be more proactive in encouraging and supporting EdTech investment and innovation in education, especially disruptive innovation. The policy environment is certainly a major difference.”

The desires of investors, however, remain fundamental. Mobile EdTech solutions must take factors like population size, internet penetration level, and data costs into account.

Euan Blair, son to former British Prime Minister Tony Blair and co-founder and CEO of EdTech Multiverse, argued that what is needed is an education that meets the real needs of the British economy as opposed to just possessing a certificate.

Multiverse was borne out of the fact that he was a product of the apprenticeship system when he was an investment banker. Multiverse trains high school leavers in the UK who have just finished either their A-Levels or GCSE’s and places them in apprenticeships with large and small companies to not only gain high in demand skills but also to earn decent income.