EdTech’s greatest opportunity lies in Africa
(This piece originally appeared in Education Investor magazine under the title Africa Digitised in September 2017)
Reflecting the fact that the greatest value lies in turning away from the herd, Warren Buffet advised investors to “Be fearful when others are greedy, and greedy when others are fearful”. So while investors have increasingly seen opportunities in education technology in developed markets (especially the US, where $1BN of deals were done in 2016) I believe the true opportunity, both for technology to transform lives and societies through better education, and to build EdTech companies of great value, may lie in a less likely location: Africa.
Just as many Africans moved straight to mobile telephones without landlines as intermediaries, or directly to using mobile money without intervening orthodox bank accounts or branches, the lack of an affordable or accessible formal education sector means they can be the most enthusiastic adopters of learning technology. Companies that effectively create a new product, market or industry (for example, google) face fewer barriers to disruption at scale than those that act as direct replacements (for example, uber).
On an African continent where 30 million children of primary school age are out of school (15 million of whom have never been to school), where hundreds of thousands of older age groups aspire to a secondary or further education they could never afford or access, new methods of delivering education operate on fertile greenfield sites. Moreover where education is at least delivered, it is rarely of sufficient quality. Schools are plagued by teacher absence and subterranean standards — in South Africa, the continent’s most industrialised economy with its most universal education system, 58% of 10 year olds can’t read for meaning and only 40% of pupils finish high school. Across the continent, the best estimate for youth unemployment is that it averages over 50%.
The moral and economic problem posed by this failure of education is given a fierce urgency by demographics: the population of the continent is set to double in the next thirty years to 2.5Bn. Already, 60% of Africans are 24 or younger.
This overwhelming educational need for a learning revolution is augmented by three characteristics — typical across the continent despite the rich and varied nature of its 54 states — that also make it an overwhelming opportunity. The first is a willingness to make remarkable financial sacrifices for education from incomes already impossibly meagre by western standards. The second, an unmatched enthusiasm for new technologies that is estimated to see half a billion new smartphone users on the continent in the next 5 years. The third, an aptitude for entrepreneurialism apparent to anyone who has witnessed Africans’ ability to turn traffic jams into impromptu markets, or road rules into opportunities for the most disruptive of innovations.
The willingness to spend on education has already spurred an entrepreneurial breakthrough in the form of low cost private schools serving poor urban areas (in certain districts of Kampala and Lagos, over 70% of pupils attend such institutions). Many of these are now using technology to make schooling accessible to more families. In an informal settlement in Nairobi, Kenya I recently visited a Bridge International school where teachers deliver its standardised curriculum via i pads to bring fees under $100 per year. The school was full despite that being an estimated 40% of the average local income.
The rapid adoption of technology offers even greater potential for new innovations.The continent recently achieved its first $100m Edtech company when online short course operator Get Smarter — who began servicing locals’ appetite for online short courses over in person university degrees then went on to create courses for Harvard, MIT, LSE and Cambridge — was acquired by US giant 2U. Fred Swanniker’s African Leadership University, begun from scratch in this decade, already has campuses in multiple countries and plans to have offerings across the continent. Siyavula have distributed over 10M online textbooks, and recently received $1.5M funding from google to expand into the vast Nigerian (population over 160M) market.
Africans’ entrepreneurial chutzpah has seen frustrating challenges turned into opportunities for dynamic innovation. Snapplify have turned the difficulty of efficient textbook procurement into an e learning content platform used by thousands of institutions across several countries. Karri, realising that schools with meagre resources required regular micro payments from parents, created an app which is now attracting interest in London and backed by one of the biggest retail banks on the continent (Nedbank). A shortage of tech talent has led to innovative models of online developer selection and training from Andela, We Think Code and Hyperion, with the latter now using African students to train European developers, something unthinkable a decade ago. Even the continent’s great infrastructure challenges — low access to the internet and a lack of devices for those who need them — are being turned into innovation opportunities by Project Isizwe and Mouse and Lion respectively.
There are also signs that government — which especially in Africa has traditionally served more as proof of the relevance of the second law of thermodynamics to politics than as an enabler of innovation — is finally beginning to offer coherent support to new approaches. The Western Cape administration has made e-learning one of its six priority game changers (two others also focus on education) and is trialling reforms based on England’s Academies. Kenya has placed promoting greater use of technology alongside cracking down on teacher absence in a bid to raise standards. In Liberia, where Africa’s only female President, Ellen Johnson Sirleaf has pioneered replacing a government system that collapsed as the country was ravaged by the Ebola virus with a trial in which the government funds places at schools run by for profit private providers (including those using extensive technology such as Bridge). After pupils at the new schools comfortably outperformed the control group in the initial trial, the providers have been given more schools to run as part of a system wide reform being watched with interest across the continent.
A sure sign that a problem is both formidably challenging and firmly in vogue is the involvement of Elon Musk, and sure enough the South African founder of Tesla and SpaceX has announced a $15M Learning X prize, for anyone who can use technology to educate children without access to formal schooling. Like the Liberia pilots, Learning X contains a commitment to measurement and evaluation often missing from developed nations’ EdTech experiments. When education is your only route out of poverty, you can’t afford to be ignorant of what actually works.
Musk’s investment is typical of a recent surge in big money interest that means early stage investors will not be short of exit opportunities. Mark Zuckerberg recently made a $25m investment in Andela, Naspers and Google have announced large venture funds focused on African education, and after a successful IPO Curro is established on the Johannesburg Stock Exchange.
The platform is laid for Africa to see an explosion of education innovation over the next decade. Investors wanting to beat the herd may need to move rapidly, or miss their chance.
Jamie Martin is CEO of Injini (www.injini.africa ) , Africa’s first education technology incubator, which he founded in partnership with the Cape Innovation and Technology Initiative. He tweets @jamieamartin1