Prosus has led funding rounds worth R5.6bn for two education technology (edtech) start-ups, further extending its presence in one of its fastest-growing businesses and adding a further billion-dollar company to its portfolio.
The consumer technology powerhouse is pushing to become one of the largest global players in online education, demand for which is being driven by the Covid pandemic. It recently bought Stack Overflow, a knowledge-sharing platform for developers and technologists, for $1.8bn (R28.1bn) — its second-largest deal since it was spun off from Naspers just over two years ago.
The group estimates that the sector will be worth $8-trillion globally by 2025 “with the pandemic pushing the market dynamics and industry forward by five years or more”.
Investments in online tutoring
On Tuesday, Prosus said it had led a €300m (R5.31bn) series D funding round in Austrian-based edtech unicorn GoStudent. A unicorn is a start-up valued at $1bn or more.
“GoStudent has built a highly scalable business offering a superb customer experience. The company is creating a leading global platform for K12 education and the speed at which they are growing is impressive,” said Fahd Beg, COO of Prosus EdTech.
In the SA context, K12 refers to learners at primary and secondary level.
The capital raise also drew participation from Deutsche Telekom; Japanese investment juggernaut SoftBank, through its Vision Fund 2; Chinese internet giant Tencent, in which Prosus is the largest shareholder; and US investment firms Dragoneer, Left Lane Capital and Coatue.
Founded in Vienna, by Gregor Müller and Felix Ohswald in 2016, GoStudent provides one-on-one, video-based tutoring to primary, secondary and tertiary students in more than 30 subjects, for a fee.
This funding comes seven months after GoStudent became Europe’s first edtech unicorn. Since its founding, the company has raised €590m, and is now valued at €3bn.
GoStudent says the new funding will go towards its international expansion with plans to enter at least six new markets this year, M&A, and efforts to increase market share in existing geographies.
Education for deskless workers
On the same day, Naspers’s Amsterdam-listed unit said it had also led a $20m series B funding round in London-based EduMe, a mobile-based training platform for remote workers that is used in more than 60 countries.
The company says it “provides access to education and knowledge for remote and deskless workers” for companies such as Uber, Gopuff, Deliveroo, Gorillas and Vodafone.
The new funding will be used to step up investments in product innovation and development, grow its market share in on-demand workforce training, as well as expand its availability to more markets in the US and globally.
“Currently, 80% of the global workforce is deskless, but the vast majority of them aren’t given the necessary tools and training to be successful,” said Jacob Waern, CEO and founder of EduMe.
The investment “allows us to continue to develop an industry-leading product proposition while accelerating our growth in the US and globally, leading the way for a new generation of workforce learning”, he added.
The promise of edtech
Prosus — which has large investments in companies such as China’s Tencent, Brazil’s iFood and Germany’s Delivery Hero — has traditionally invested in fintech, classifieds and food delivery. However, the pandemic has seen its focus shift to online learning as well and has poured more than $3bn into the sector.
Prosus initially entered the edtech market in 2016. Its main units include Brainly, BYJU’s, Codecademy, Eruditus, SoloLearn and Udemy, which was recently valued at more than $1bn.
Growth in the sector has also benefited the likes of SA-founded online education business Gol, which earlier this year became the first SA start-up to reach unicorn status.
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