Earlier this month I attended FUTUR.E.S in Africa in Casablanca, the first event to connect French, Moroccan and African digital ecosystems. Startups, academics and government shared projects in various sectors, including education. It was refreshing to discuss edtech with Francophones, as usually the Anglo/Franco African divide is wide.
One particularly interesting workshop aimed to discuss the business models of edtech. In the end, it was more a discussion about how challenging it is to run an edtech venture in Africa. While the issues raised are not new, it was useful to be reminded of the frustration that passionate people feel in trying to launch their great idea and keep it sustained. As can be seen below, the issues really apply to most ICT4D initiatives.
Challenges Around Edtech Business Models
In no particular order, here are some of the big challenges:
- Expectation of free. Much of edtech is based on great content. Content has value. It takes time and people to develop. Localising it into African languages is expensive. It is also quickly consumed, leaving people hungry for more. What do you do when the market has come to expect it for free?
- Payment is difficult. Even when people decide to buy, there are issues. For the user the most friction-less method is to pay with airtime, but then 30-40% can be lost to mobile operators and other service providers. Most people in Africa don’t have credit cards. And let’s face it, m-Pesa only works in seven African countries, none of which where it is as successful as in Kenya.
- People get “stuck” on islands. As the GSMA explains, many users are “stuck on ‘application islands’, primarily using only WhatsApp or Facebook, without being aware of the broader potential of the internet.” How do you get them to your app? How do you even get noticed?
- Education is a long game. While in some cases grades can be shown to improve quickly, in general the impact of an education intervention takes years to show.
- The trouble with MNOs. Mobile network operators (MNOs) have immense reach and power, and yet are notoriously difficult to partner with as a startup. Basically, you need them a lot more than they need you.
The MNO situation is slowly beginning to change, for example, Orange is investing EUR50m in startups in Africa, as are other MNOs, and across Africa a number of MNO APIs are now available. The next round of the GSMA Startup Accelerator Innovation Fund for Africa and Asia-Pacific, which tries to bring MNOs and startups closer together, is open for applications until 15 April.
Who’s Gotten it Right?
At the event I was asked to talk about sustainable and impactful edtech initiatives in Africa. It was useful to look at initiatives that have been operational for at least six years and think about how they’ve made it. Not all are for-profit, and sometimes their users are different from their paying customers, which could be funders or corporate sponsors.
- Siyavula in South Africa (SA) – and soon in Nigeria – decided to embrace not only free content, but to openly license it. It has 10 million open textbooks on desks in SA – 100% penetration in government schools.The paid-for part is Siyavula Practice, a closed-content proprietary assessment service for learners, with a teacher dashboard. Some schools pay (usually private schools), but many are sponsored by external funders. Payment can be made by credit card, airtime or bank transfer. Google.org recently awarded Siyavula $1.5m to sponsor access to 300,000 learners, split between SA and Nigeria.
- Eneza, the assessment and content delivery service for school learners in Kenya, Tanzania, Ghana and Zimbabwe has grown thanks to being invested in by Safaricom, which also provides integration and visibility support. They got it right to work with an MNO.
- Fundza, the mobile novel library, also has a business model that draws on donor funding and commissioned content. Beyond content, it offers training and skills development for a fee. The content is not only in digital; Fundza’s stories are also printed, a format that is appealing to many donors. In the last year Fundza delivered over 33,000 print books.
- Worldreader, another mobile library with a large African footprint, focused its early years on the Amazon Kindle as a delivery channel. In 2013, a mobisite was added to increase reach. The rest is history: thanks to widening the channel options it has reached over seven million readers. Both Fundza and Worldreader have experimented with paid-for content – but with limited success. Donor funding, public donations, sponsored activities like increasing access to reading materials, or services like conducting research, are key sources.
- For pure-play commercial edtech consider GetSmarter, a South African startup founded by two brothers that delivers short online courses to students anywhere. Over a ten year period GetSmarter has steadily partnered with top universities around the world, offering courses for them and building both a partner and broad customer base. The courses are not cheap – the eight-week Harvard Cybersecurity course costs $2,800 – but they are good, aimed at professionals. The staff of over 400 includes performance coaches, technologists, video producers and tutors. The key focus areas of partnerships and quality resulted in the company being sold for $103m last year.
- The Talking Book, a ruggedized audio player and recorder by Literacy Bridge that offers agricultural, health and livelihoods education to deep rural communities in four African countries, has been going for ten years. It’s been run on a combination of donor funding (as it’s founder said to me, if a stream of donor funding can be sustained then this is a viable model) and commissioned implementations.For the latter it services the likes of UNICEF and CARE International to achieve their goals, for example, helping people to be healthier or better farmers. The key here is to demonstrate value to potential partners. Literacy Bridge has also developed an interesting “affiliate” model, that is worth reading about.
The Talking Book is not strictly an edtech initiative, but it’s aim is to educate and change behaviour. This point was raised in the workshop: unless you’re focused in formal education it may be better not to call yourself an edtech provider. Offer learning in m-Health, m-Agri or Fintech, where there may be more access to funding.
As a parting shot: Injini, Africa’s only incubator dedicated to edtech, is calling for applicants until 3 April to receive $50K in investment and five month’s of incubation.
Thanks to Calixte Tayoro and Lola Laurent for a great workshop.
Image: CC by Trevor Samson / World Bank