Investment in edutech industry touches record $18.7 billion mark

Inayat-ur-Rahman, Deputy Business Editor

According to a recent report, investment in the edutech industry climbed from $16.3 billion in 2018 to $18.7 billion last year, reflecting a steady growth in the second consecutive year. 

The COVID-19 pandemic has accelerated the implementation of digital transformation within the education sector across the Middle East and Gulf region and it offers huge investment opportunities to investors, says an industry veteran.

Raza Khan, chief executive officer of Al Najah Education, said there is a dire need to invest in the next generation of learning management systems to ensure quality education to the children.

“An educational technology, or edutech, as we like to call it, is one of the most exciting areas for investment right now as the conventional mode of education system is no more a viable option after the pandemic that limited the scope of school-based learning and encouraged online education,” Khan said in an exclusive interview to Gulf Today on Friday.

Referring to the latest World Bank data, he said 1.5 billion students or close to 90 per cent of the world’s students have been impacted by the current pandemic. Schools across the globe left no other option, but to take their classrooms online as academic operations are temporarily suspended by the majority of regulators or concerned authorities. 

“This could lead to a whole new era of education, one that goes beyond the Covid-19 pandemic. We have to realize the ground realities and reset the priorities in line with the latest emerging trends in the education sector,” Khan said.  

“Personally, I think the biggest change is coming in three areas. There is no second opinion that the world still needs better quality learning management systems that allowed schools to do teaching and learning in the cloud,” he added.

Elaborating, he said it would be a win-win situation for all the stakeholders of the industry including parents, school operators and investors. I think investing in the next generation of learning management systems will ensure good returns to the investors,” Khan said.

“And the second key area of investment where I think exponential gains are possible in edutainment. We have seen a lot of sophisticated educational games now that give children a rich and continuous learning experience and even bring in corporate and social teamwork aspects into the game,” he said.     

Thirdly, he said the content and pushing of good quality personalized good content to young learners is one of the key growth areas. 

“There are billions of gigabytes of educational content available online but children have no access to it so the development of the next generation of content aggregators and content management systems will offer phenomenal returns to smart investors,” he said.

Khan said edutech platforms have grown exponentially to include adaptive learning, video content, gamification, and personalized learning solutions to change the way people learn. 

While affirming his point of view, he said the transformative growth in the industry has attracted interest from private sector investors in the past few years. 

“Edutech platforms are also coming up with innovative and interactive services that aim to improve the remote learning experience. Consequently, the pandemic has also opened a new chapter for the edutech industry, prompting many ventures to raise funds to support their expansion plans.

“The combined investments in worldwide edutech platforms during the past two years are higher than the total combined investment recorded for the past 25 years [1998 to 2017]. This clearly demonstrates the rising interest within the space and opportunities within the sector to meet the growing demand going forward,” Khan said. 

“A similar trend was observed within the Mena region’s edutech sector, with deals rising from four in 2016 to more than 30 last year,” he added.

Khan was of the view that edutech solutions are only an alternative option until now, but this is going to be an indispensable part of the education system in coming days. 

“Digital or e-learning is demand of the parents at present to ensure safety of their children. Edutech companies or individual investors will come up with a different model, wherein more and more players will join hands with traditional schools and institutions to support latest trends in the industry,” he said.

He said there has already been a flurry of learning opportunities in the region and further developments within this sector are likely to emerge as the traditional providers’ partner with digital conveyors.