Illustrative image (Source: Equest)

Hanoi – Educational technology (edtech) startups in Vietnam have drawn many domestic and foreign venture capital funds thanks to their high development potential.

CoderSchool, a startup providing online training in programming, has recently announced that it has raised 2.6 million USD in a Pre-Series A funding round led by Monk’s Hill Ventures.

Earlier, English learning app ELSA successfully called for 15 million USD at the Series B round co-led by Vietnam Investments Group and SIG.

Revealing the reasons to invest in Vietnamese edtech, Justin Nguyen, Director of Monk's Hill Ventures highlighted that Vietnam is an attractive market with a fast growing young middle-income class where education receives great attention, and great efforts are being taken by the Government to draw investment in the sector. These are factors making its edtech market attractive to investors, he said.

He noted that since 2008, the Vietnamese Government has spent 15-20 percent of public investment on education, one of the highest levels in the world and only after Malaysia in the Southeast Asian region. Therefore, although the country’s edtech market is still young, it is vibrant with startup founders looking to tap unexploited opportunities through renovation to improve learning efficiency, he said.

According to Le Hoang Uyen Vy, CEO of Do Ventures that has invested in online learning platforms of Vuihoc and Manabie, the online learning market of Vietnam boasts huge potential with more than 23 million students, rising income of the middle class and one of the highest ratio of Internet users in the world. She noted that Vietnamese people spend 30 percent of their income on education, and parents are willing to pay more for higher quality education for their children.

Despite the bright future, startups in the field have a long way to go to rise stronger in edtech area. Amid the pandemic, many startups have grown strongly, but none have been able to clinch an overwhelming position in the market, keeping the door open for investors, she said.

Michael Ngo, ELSA Country Director in Vietnam said that online education will become a new standard in the future, especially amid the pandemic. Digital technologies help reduce cost and increase people’s access to high quality education.

Currently, no domestic edtech firm is valued at 100 million USD. Experts said that Vietnamese edtech firms still lack breakthrough technologies to grow stronger.

Vy said that the Vietnamese edtech market is still in its infancy, which means Vietnamese start-ups need time to catch up with the development speed of other companies in larger markets in the region. She advised edtech start-ups to develop healthy revenue models towards sustainable growth.