East Ventures Funds Prep, a Vietnamese Edtech Startup

Learning platforms online focusing on Vietnamese language, Prep, announced the acquisition of funding worth $ 1 million or more than IDR 14,9 billion led by East Ventures and Cercano Management. Previously, Touchstone Partners had also disbursed investments with similar figures, bringing Prep's total funding to $2 million or nearly IDR 30 billion.

The acquisition of fresh funds is expected to strengthen balance sheets companies and accelerate product development and various business activities in increasing market adoption. Prep itself offers a variety of course solutions online and practice exam simulations focusing on standardized languages, such as IELTS, TOEIC, and high school graduation exams.

Prep offers interactive content that encourages active engagement and participation among students. From a technological standpoint, the platform simulates real exam situations that are immersive and interactive, and can be personalized and adapted to student learning styles, pace and preferences.

Founded in 2020 by Tu Pham (Founder & CEO), and Tran Hoai Nam (Co-Founder & CTO), Prep's mission is to expand access to quality test preparation.

In addition to the lack of interaction and personalization on the platform online, most students experience geographical barriers to accessing education offline. This happens because most experienced teachers are still concentrated in tier 1 cities, so students in tier 2 & 3 cities have limited access to quality learning.

Based on data from Prep, high-quality standardized test preparation services are always in demand in Vietnam. The language learning market in Vietnam is said to have tremendous potential, with an estimated market size of $2,1 billion, of which $1,6 billion is for the English market and the remainder for other languages.

Prep itself was born from a broad market opportunity as a digital evolution of IPP Education, a series of offline language learning centers founded by Tu in 2014. Since its launch, Prep has grown rapidly and attracted more than 100.000 users across provinces and cities in Vietnam, as well as various other regional markets.

By 2023, Prep aims to expand its user base to half a million, as well as present a variety of other standardized language test preparation offerings, such as Japanese (JLPT), Mandarin (HSK), and Korean (TOPIK). This investment strengthens Prep's belief in transforming the future through test preparation, as well as empowering students with the knowledge and skills they need.

East Ventures investment in Vietnam

This is the second Vietnamese startup this year to receive funding support from East Ventures. Previously led venture capital firm Willson Cuaca it has also invested into startups telehealthMedigo. Meanwhile, since 2021 East Ventures also has four other portfolios, including Vietcetera, CirCO, Sendo, and Kim An Group.

In a joint interview DailySocial.id, East Ventures Partner Melisa Irene said, as a country with the second largest population in the region, the digital economy growth there is quite fast. In addition, Vietnam is known as one of the suppliers of technical talent for the global digital ecosystem; which means fulfilling variables for the development of a strong local team.

Irene further said, "Compared to Indonesia, both regions have a large young population and have the same pattern. Vietnam has a population of more than 97 million with internet penetration of 70,3% in January 2021. Meanwhile, in the same period , Indonesia has a population of more than 274 million and internet penetration reaches 73,7%.”

“The two countries also have the same composition of the population in terms of age groups, young people make up more than half of the country's population; Vietnam is around 55%, while Indonesia is around 70%."

Investment in sector EdTech

In 2022, EdTech is one of the sectors that is quite shaken. At least three well-known startups in this sector announced employee efficiency or layoffs, including Zenius, Understandify and Ruangguru. This is influenced by many things, including increasingly dynamic social and economic conditions post-pandemic.

Even so, investment in this sector is still flowing. Several new startups such as MySkills, LingoTalk and Algobash managed to obtain initial stage funding from a number of investors.

Edtech sector funding in 2022:

Throughout the pandemic, method hybrid shows positive perceptions for teachers and students. In late 2022, the Center for Digital Society and Google for Education compiled research, The Future of Indonesia's Hybrid Education in the Post-Covid-19 Pandemic Era. The survey shows a positive perception of the future of adoption EdTech and distance learning (PJJ) in Indonesia.

As many as 56% of teacher respondents felt that distance learning facilitated their teaching needs, and 27% of teachers thought that a hybrid model would help them. Meanwhile, from the student side, combining the distance learning model with face-to-face learning (PTM) can help students learn more effectively.

Based on Google reports, there are four industry verticals that are categorized as nascent or still premature, incl EdTech. This breakdown is followed by long-term transaction activity survey results, as shown in the graph below. Term nascent itself refers to a situation that has emerged or has the potential to develop.