1. Startups

Edtech Platform Trends in Indonesia

In the last three years there have been 11 fundings involving local edtech startups

apart e-commerce, ride-hailing, and fintech; There are several startup business sectors that are predicted to benefit greatly amid the growing digital market share in Indonesia. One that is often mentioned is EdTech(educational technology). Basically, startups in this field are trying to bring democratization of technology to the world of education.

edtech in Indonesia began to become hyping entering the 2015s – even though startups like Zenius been around since 2004, while other big players like Ruangguru and HarukaEdu only debuted in 2013. The popularity of these platforms also follows digital trends that are developing in society – for example, distribution broadband which is expanding, the community is getting more familiar with application-based services, to more digital payment options.

Editors DailySocial over the past 5 years has covered dozens of startups EdTech, 65 of which are still surviving and thriving today – including several foreign startups that focus on working on the market here.

Here are some interesting trends that we can map in the country's edtech industry:

Platforms and business models

There are six types of services offered by EdTech in Indonesia. First e-learning, peddle learning materials online. Some present through interactive content, video on-demandand online live tutoring. From a material standpoint, the scope is also diverse, ranging from courses for school students, foreign language learning content, to strengthening personal skills such as accounting and programming. Examples of startups in this field include Arkademi, Bahaso, Bensmart, CodeSaya, Kode.id, Ruangguru, Vokraf, Zenius.

Services e-learning in Indonesia mostly targeting general users, followed by K-12 (equivalent to elementary, junior high, and high school levels). Some also specifically present packaged materials for preschoolers (eg Playable, Smart Point), universities (eg DQLab), and business (eg Ringerlaktate).

Concept blended learning also still applied EdTech in this sub-vertical as a precaution against market readiness; namely by providing a program that combines activities online and offline.

Service model EdTech next is Learning Management System (LMS). Different from e-learning, LMS is more designed to help plan learning activities. Previously it was widely used at the institutional level, but over time it was also designed for personal circles. Some LMS platforms only provide an administrative management system for teaching and learning activities, others also provide teaching and learning activities marketplace learning materials.

From existing local startup products, LMS was developed to accommodate several market shares, including business (example: Codemi, HarukaEdu, RuangKerja), K-12 level (example: Kelase, Mejakita, Pintro), universities (example: Ngampooz), and the general public. (example: ZumiApp).

Next is Software as a Service (SaaS), as app on-demand which helps educational institutions to transform by digitizing the business processes within them; for example related to administration, library management, attendance, and so on. So far, SaaS created by local startups is targeting the K-12 level. The reason is quite reasonable, other sectors such as business or universities can generally develop independently with their IT team, while K-12 in Indonesia very rarely has the human resources for it. Examples of SaaS services for education include AIMSIS, Gredu, Infradigital, Smart Schools etc.

Another service is a directory, which contains various information about educational needs – for example a list of university recommendations or others. Then fintech, in particular they provide educational financing assistance. And the last e-library, digitally accommodate reading sources or references to support learning activities.

Startup funding EdTech

In the last three years, DSResearch noted that there were 11 transactions announced (disclosed) by startup EdTech in Indonesia. Ruangguru and HarukaEdu were the two that received the most investor funding, both of which have now closed their series C rounds. Ruangguru itself has been confirmed to have a valuation of over US$100 million via the last funding worth 2 trillion Rupiah.

AnnouncementStartups Investor
March 2020UnderstandSeed FundingAnd Combinator
January 2020Hacktiv8Pre-Series AEast Ventures, Sovereign's Capital, SMDV, Skystar Capital, Convergence Ventures, RMKB Ventures, Prasetia Dwidharma, Everhaus
January 2020GradePre-Series AVertex Ventures
January 2020ArcadeSeed FundingSOSV
December 2019RuangguruSeries CGeneral Atlantic, GGV Capital, EV Growth, UOB Venture Management
November 2019HarukaEduSeries CGIS, AppWorks, GDP Venture, Gunung Sewu
October 2019Zenius EducationSeries ANorthstar Group
February 2019InfraDigitalSeed FundingAppworks Ventures, Fenox Ventures
December 2018SqulinesSeries AInvestidea Ventures
May 2018RuangguruGrantMIT Solve
July 2017RuangguruSeries BUOB Venture Management

While many other startups are still struggling with initial funding. Last year's third quarter Zenius Education finally found the right investor. They ask for capital funds from venture capitalists who also invest (initial) into startups decacorn Gojek, Northstar Group.

Looking at the size of the market share

Ruangguru become one of the startups EdTech local area with the most significant growth. Their main service, video on-demand and online tutoring, focused on elementary to high school students -- they also released Skills Academy to embrace market share beyond that.

For the number of students in Indonesia, based on data from the Ministry of Education and Culture per the 2019/2020 school year, there are around 50,6 million students. A total of 57,9% are elementary level, 19,9% ​​intermediate level, 9,9% upper level, and 12,1% vocational level.

Concept online tutoring actually also trying to disrupt a business model that has been well validated before. In the traditional approach, various non-formal educational institutions such as courses or tutoring are in high demand by students and their parents – especially in order to prepare for the National Examination.

Our projection is that the trend will continue to increase. Plus the pandemic is starting to force students to get used to distance education. Models offered EdTech more relevant for application. New opportunities, such as government collaboration with digital platforms for implementation of Pre-Employment Card, is also a "green light" for the opening of regulations with the concept of reform in national education.

- DSResearch will soon release a report titled "Edtech Report 2020" which reviews details about the dynamics of the education technology industry in Indonesia. To receive updates, make sure you have subscribed to the DSPatch newsletter via: https://dspatch.dailysocial.id.

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