COVID-19 has created a sea change in how the world learns. The opening panel of the Summit discussed the latest EdTech trends and pinpointed opportunities in China, India and North America. They also pointed out that new thinking is needed to fund EdTech ventures and bridge the digital divide.

The Moderator, Alessandro de Lullo, a Co-Founder of SuperCharger Ventures, launched the session by inviting Bill Ning to outline his view on trends in China – which is a leader when it comes to EdTech investments, but has seen some dramatic changes in 2021.

Market Developments

Bill Ning, the Founding Partner Blue Elephant Capital, noted that over the last five-to-ten years, K-12 after school tutoring has been the biggest EdTech market in China, with many companies riding the boom. However, after the release of new government regulations that required listed companies to switch from for-profit to non-profit, the market has shrunk.

There are however new opportunities for EdTech investment. The first is vocational training and upskilling for college students and adults. Bill noted that after 9th Grade, up to 50% of Chinese students follow a vocational training path. The second area is kindergartens and K-12 schools, where education IT, content and SaaS are welcome.

Many companies in China already have good teams, technology and quality educational products. They are finding ways to capture opportunities outside China, starting with overseas Chinese communities.

James Tieng, the Co-Founder and Managing Partner of the Lumos Capital Group, pointed out that the US is seeing very strong tailwinds across the full age spectrum in education. A lot of funding is now available, including unprecedented stimulus funding for technologies and services that can mitigate the learning loss society is grappling with. There has also been a renewed push into social and emotional learning, and tackling problems like mental health and other issues that are increasingly visible in higher education.

The rising cost of traditional higher education is driving a decline in overall enrolment, especially in the US. Potential solutions include lowering the cost of education with online modalities, or delivering more R.O.I. by creating tighter connectivity with businesses to deliver on the promise of providing a path to employment. Conversely, in terms of up-skilling and re-skilling, the non-degree space is absolutely booming. Corporate funding is becoming more readily available, as companies view education as a tool to drive retention or re-skill people so they can aspire to jobs they currently aren’t capable of.

However, James also warned that success is not necessarily easy, especially when it comes to global markets. Significant localization can be needed to accommodate languages, cultural norms and sensitivities. By and large, success in deploying outside of a home region takes local partners. Getting an institutional partner with a good brand name will help. Tertiary education, workforce development and language learning can also make it easier to cross markets .

Vinit Sukhija, a Partner at Learn Capital, observed that, after maturing for the better part of a decade, India’s education market is in a very interesting place. The proliferation of mobile connectivity and digital infrastructure – not just in Tier-1 cities, but across the entire country – has created the conditions for exciting new categories within education technology.

For example, India’s legalization of online degrees just a few years ago, has led to any number of players competing to act as online program managers for university degree programs. However, Vinit is also starting to see the blossoming of a new, next generation class of companies, that are building more digital infrastructure for the historically offline sector. In the Learn Capital portfolio, these might be something like a Shopify for independent tutors, who develop their own proprietary video technology that allows coaching centres or independent tutors to directly bring their businesses online.

Vinit believes that new, up-and-coming digital infrastructure plays are helping to augment the very large pre-existing offline market in India, driving exciting trends and investment opportunities on both fronts.

Crossing the Chasm

There are concerns that the digital divide will widen learning gaps amongst the haves and the have nots.

Vinit explained that Learn Capital looks at the Key Impact Indicators that include the reach of an EdTech solution alongside with “performance” and “intensity”, when making investment decisions. Its portfolio of companies now easily reaches more than 500 million learners each and every year, creating ripple effects across the entire education technology sector. “One cannot overstate the importance of mobile technology in democratizing access to high quality education,” said Vinit.

Bill Ning, Founding Partner of Blue Elephant Capital, believes that under the current government policies, the market in China for good products at cheaper prices that students and ordinary people can afford, could be 10 times larger.

Yat Siu, Founder of Outblaze, also highlighted the bifurcation between digital natives and the older generation. He said parents should learn with and learn from their children in the digital world.

Need for Blended Capital

Panel speakers believe that investors and founders should address the issue of equity together. They pointed out that financial returns should not be the only investment consideration. Funders should also invest in purpose, and back solutions that can achieve equity and inclusion. Bill Ning believes that governments and foundations can play a very important role as EdTech calls for more patient capital. James added that foundations can increase access to quality learning solutions by subsidizing the costs of certain things to populations that are more in need.

“We are looking forward to see more patient limited partners, patient entrepreneurs, and other people, interested in edtech innovation to build digital contents that is almost free for the majority,” Bill said.

The Future of Education

According to Yat, the biggest challenge for schools is preparing children to face a fast-changing future! The solution might well be the metaverse, where the prospect of living a virtual life and having a full existence in the virtual plane is becoming a real possibility. Especially for children, who these days are more likely to want something “virtual” for Christmas than a physical present.

For some, the metaverse is already here. Yat showcased the Philippines, where millions of people are now playing online games like Axie Infinity for profit. Some are making a higher income than they could as a domestic helper in Hong Kong. That is quite an achievement for a job that didn’t exist a year ago.

Yat’s view is that, what used to work very well, doesn't serve today. And, as unthinkable is it might be for parents, the impact of a traditional education, is likely to be negative rather than positive for graduates who leave college loaded with debt. He explained that, because the existing education system is built within the constructs of limited physical space, a reframing is needed to prepare our future generations for the exponential opportunities that are developing in the real world.

The Role of Hong Kong

Yat wrapped up the panel by exploring the role Hong Kong can play. With its agility, East meets West culture and more Chinese EdTech companies venturing out of the Mainland market, Hong Kong can be a bridge between Mainland China and the rest of the world. “Hong Kong could play a unique global bridging role,” Yat said.

The last forum of the event invited the entire audience to join a panel discussion, led by Rachel Chan, Co-founder of Esperanza.

Rachel explained that Esperanza is conducting a study on whether Hong Kong could develop as an education, innovation and technology hub in the Greater Bay Area. She also shared some key “How We Might” issues raised by various stakeholders so far, including:

• Build the capacity of entrepreneurs and educators
• Incentivize and support EdTech applications
• Validate and evaluate EdTech solutions
• Design, develop and/or localize EdTech solutions that meet market needs
• Build an EdTech funders community, with public, private and philanthropic capital
• Foster cross-sector and cross-border partnerships
• Build a culture of learning from 3-80

She asked the panel speakers to share their top three wishes if Hong Kong is to become an education innovation and technology hub, and she started with hers:

• Building communities of progressive education and business leaders to experiment on edtech solutions and share best practices
• Establishing centres of excellence to validate edtech solutions
• Building an edtech funders community, particularly by getting foundations involved

Peter Yan, the CEO of Hong Kong Cyberport Management Company Limited, would like to see the city able to use technology in three aspects of education he finds fundamental. They are:

• Making education more attractive and inspiring
• Freeing students and teachers to reach their dreams by eliminating mundane tasks
• Helping all stakeholders to become more knowledgeable about what technology can and cannot do in order to enjoy EdTech’s full potential.

Ada Wong, Director of Ednovators, also had three key ideas to share. The first was the maxim that, no matter how good the EdTech environment is, we sneed evidence to show that it is impactful and that students are learning more effectively. Secondly, she feels Hong Kong needs something more elementary, such as a role switching. i.e. EdTech entrepreneurs visiting schools for a few weeks to get an idea of the real life environment, and teachers learning from EdTech startups. Her third point was that innovation alone is not the answer. Hong Kong's education infrastructure needs to be reformed to create an ecosystem that responds to the future. “We need to create an ecosystem that responds to the future,” she said.

Kenneth Kwok, the Founder and CEO of Global Citizen Capital, only had one question: Whether you call it an EdTech hub or a skill and talent hub, how can we bring together a global multi stakeholder coalition consolidated at Cyberport to help Hong Kong’s next EdTech unicorn realise its value, and also empower billions of young people to achieve their educational goals?

Professor Kong Siu Cheung, the Director of the Centre for Learning, Teaching and Technology Education at the University of Hong Kong, offered an alternative academic perspective. His idea is that what is more important and potentially more impactful, is education innovation along with improving the wisdom of our students.

As the panel wrapped up, Rachel said the Esperanza study will be released in Q1 2022. Meantime, all interested parties are welcome to submit their views to hi@esperanza.life.