A report by Google, Temasek, and Bain & Company shows that investment in education technology (edutech) startups in Southeast Asia (SEA) reached US$100 million by mid-2022.
This figure is down from the US$500 million in funding received in 2021: US$200 million in the first half and US$300 million in the second half.
Funding in 2021 was the highest compared to the pre-pandemic level of US$200 million in 2019 and US$300 million in 2020.
The research team notes that the post-pandemic economic recovery led to high churn rates—the rate at which customers stop using a product.
"Lower uptake of new courses and reduced average spending have led investors to approach education technology cautiously and shift to sectors such as SaaS and Web3," the research team wrote in their report.
Challenges to scaling this sector include improving the quality of teaching materials and creating a learning experience that seamlessly integrates with traditional learning, while ensuring user safety and privacy.
Previously, Indonesian edutech startup Zenius temporarily shut down after 20 years of operation. News of the closure spread rapidly on social media after the startup information account, Ecommurz, posted a screenshot of Zenius's press release.
According to Katadata, the press release stated that Zenius was facing operational issues and had taken the strategic step of temporarily halting operations. However, Zenius assured that it would continue to work for Indonesia.