Winning the Asian Edtech Market

Prepared for

Prepared by

1.6

2.4

6.5

7.3

1.1

2

3.3

>2.0 E

0.8 0.91.5

1.0

2013 2014 2015 2016

Metaari

CB Insights

Edsurge

Edtech investment maintained its momentum in 2016

Private investment in edtch companies in 2016 maintained its momentum after seeing a record high in the U.S. and the globe in 2015

Investment in edtech companies ($ Billion)

Continuing robust deal flow in the U.S. and China is catching up

58%28%

14%Companies in the rest of the world

2 0 1 6 i n v e s t m e n t

Chinese Companies

US Companies

$1.0B

$2.1B

$7.3 B $4.2B

Source: Metaari

Policies matter in accelerating edtech adoption in the K12 classroom

Photo: CCTV.com Photo: Huffington Post

18th Central Committee of the Communist Party of

China (CPC) in 2015

National People's Congress

Chinese online K12 education companies leveraging mobile platforms received investor attention

<$1 billion VC investment in Chinese edtech companies in 2016

486

135 116

221

26 2

Online Blended Offline

475

128 135

1

131

87

30

K12 Corp / Lifelong PreK Higher Ed

Mode of delivery Segment

Source: Emerging Strategy Analysis and Dow Jones Venturesource

All subjects + Extra curricular training

ELL only

Supplementary learning companies received investor attention

Source: Emerging Strategy Analysis and Dow Jones Venturesource

77 deals

Supplementary learning companies and related service providers

Service providers primarily for formal, regular schools

Learning support for non-formal education vs. Learning support for formal schools (total 86 deals in 2016)

Tablets and smartphones are the most popular gadgets among Chinese students

Chinese students huddle during a recess in a Saturday supplementary school classroom

Photo:,Emerging Strategy

c

Large test prep segments across Asia offer low-hanging fruits

Gaokao Outbound int’l students English fever

Gamified learning for B2C test prep apps

Star teacher lecture capture Adaptive learning as value adds

CSAT High per student spending

on supplementary schools

Competitive college entrance exams

Live streaming tutoring Social media app Artificial intelligence

Drivers

Opportunities

DriversDrivers

Opportunities

India China South Korea

Opportunities

E-textbooks are increasingly common in the K12 classroom

K12 student-

computer ratio

by OECD

Australia, UK,

US, Norway

(1.0~2.0)

Singapore,

Canada

(2.0~3.0)

Korea, Japan

(3.0~4.0)

Photo: Kyodo News

In Korea and Japan the governments promote classrooms with one-student-one-computer

Photo: Online Learning and Distance Education Resource

c

Edtech poised to accelerate due to improved access to ICT and its potential for personalized learning

A large dynamic private K12 school segment

Greater access to ICT

India

The govt’s initiatives to promotedigitization of K12 educationthrough competition & financial support

China

Blended learning Edtech to facilitate low-cost

private schools for scale up

Classroom management systemwith adaptive learning

Virtual learning for STEMeducation

Rapidly increasing access to ICT

Tablet distribution began in 2016, narrowing the digital gap between urban and rural schools

Indonesia

Social learning apps that facilitate student-to-student interaction and teacher-student-parent communication

Drivers

Opportunities

DriversDrivers

OpportunitiesOpportunities

c

Necessity of human interaction in English language learning results in human-centered business models

Rising wealth and strong demand for ELL in preparation for study abroad programs

China

Rapidly evolving ELL space attracting new companies and driving new business models while edtech in other segments is catching up

Japan

Webcam-based face-to-face ELL Experiment on AI for ELL may

gain traction

Drivers

Opportunities

Drivers

Opportunities

Gamification ELL combined with human interaction

Blended learning that creates communities for the learners of English language and computer programming

cc

Education industry in Asia is facing disruptionTechnology and rising incomes in emerging markets are the twin drivers of education industry

expansion and edtech innovationsClassroom management system

Social Learning

Gamification

LanguageLearning

Virtual learningMobile

Learning

Adaptive Learning

Test Prep

STEM