From EdTech startup to $10bn
5 things you should learn
from the fastest growing EdTech businesses you (probably) haven’t heard of. The EdTech market has experienced double digit growth for some years now and in 2020 while many of us have been confined to our homes, demand for remote learning has increased significantly. Although the sector remains fragmented in the UK, EdTech giants are rapidly emerging in other areas of the world as the sector attracts record amounts of venture capital (VC) and private equity (PE) investment. We look at two of the standout EdTech success stories this year to understand what UK businesses can learn from the largest Edtech businesses you (probably) haven’t heard of.
EdTech Decacorns
Two of the standout EdTech successes over recent years have come from India and China. Byju’s was launched in 2011 in India and today is valued at over $10bn, having raised over $500m earlier in the year from a host of top tier VCs. A little further east Yuanfudao was founded in 2012 and recently raised $2 billion from investors including Tenzent and DST valuing the business in excess of $15 billion. The key question is, what can we learn from the strategy and operational execution of these two businesses?
- Not EdTech but Education Media Technology. Byju’s founder considers the business to be an Ed-Media-Tech business and puts engaging content at the heart of their success. Teachers interact alongside gamified animation in a live action format creating an immersive learning experience that bridges the gap between digital and classroom learning. It is also worth noting both Byju’s and Yuanfudao pay a premium for the best teaching talent, who are expected to explain concepts and entertain the young audience in equal measure.
- Large Classroom format becoming the norm. Yuanfudao did not start in its current from but pivoted from an online question bank to its current focus on large online classroom delivery, which is becoming the prevalent delivery model for the rapidly growing EdTech businesses. This sits between 1-to-1 online tutoring and the more extreme MOOC models – i.e. hundreds to a few thousand students engaging with one lesson online. In this way the business benefits from economies of scale allowing it to afford the best teaching talent (mentioned above), which is combined with smart technology and human touch points to deliver a personalised learning approach (see below).
- Personalised Student Journeys. Both businesses leverage data and analytics to help personalise learning paths for students. Intelligence gathered from these insights helps to highlight areas of strength and weakness and can help to adapt and alter a student’s learning pathway accordingly. In addition, there is also a direct human touch point. Both businesses use mentors to support individual students along their learning journey. This has strong parallels to a student’s experience in a classroom setting, who benefits from a mix of one-to-many tuition with periodic high touch support from a teacher or teaching assistant.
- Business-to-parent-to-consumer ‘B2P2C’ sales model. Both Byju’s and Yuanfudao have spent significant resources building their offering, but also marketing to the budget holders in a business-to-parent-to-consumer model. Each business understands the weaknesses of the education systems they are working within and have built propositions and sales processes to address them. The willingness to invest heavily and create an effective sales strategy around the ultimate budget holders is a key strategy of both businesses.
- Focus on Renewal and Retention. Whilst B2C businesses have the ability to generate rapid growth, customers are also more fickle and a lack of control of churn can quickly create a leaky bucket. Byju’s prides itself on its retention rate which is closer to a B2B tech business than a consumer facing app. Putting significant investment into specialist teams to manage onboarding, ongoing engagement, and proactively engaging at point of renewal supports the lifetime value of a Byju’s customer and therefore confidence to invest to acquire them.
Our Key Takeaways
The Salesforce platform extends across every interaction your customer has with your business and can help to support many of these areas by delivering Sales, Service and Analytical capability across all touchpoints with your customers.
- Content & Learning Experience: Is your content as good as your tech?
- Acquisition: Do you understand your target market, their pain points, and buying triggers?
- Retention: Are your post sales processes and systems supporting retention and upsell?
- Customer visibility: do you have the data and analytics capabilities to drive value from every touch point a customer has with your product and business?
