Eliza Erikson
Investment Partner
Emily Feenstra
Associate, Investments

Potential to Leapfrog? The Opportunity for Ed-Tech to Enable Differentiated and Personalized Learning in Emerging Markets

June 5, 2017

A decade ago, particularly in emerging markets, education conversations focused largely on ways to increase access for all learners. While formidable access issues still exist, the good news is that completion rates for primary grades are now over 90 percent; and while secondary school completion rates are lower, they continue to increase.

So what is the main issue we are all focused on now? Quality. That’s because worldwide, there are millions of students sitting in classrooms who aren’t learning. The 2016 Education Commission report reveals that in low-income countries, 69 percent of students will leave school without having learned basic, primary-level skills.

So it is clear that collectively we need to shift the focus from “education for all,” to “learning for all,” where learning extends to a more comprehensive set of literacies, competencies, and mindsets that will ensure that children can thrive in the world of the future.

How do we possibly get there? Clearly this will take a range of initiatives. Technology’s ability to scope and scale rapidly means there is tremendous untapped potential to leverage ed-tech as one key lever to improve student learning outcomes. Based on Omidyar Network’s $100 million invested in education, one of the trends we are betting on is technology that enables differentiated and personalized learning.

Why the focus on differentiated and personalized learning?
In all the countries where we work, one of the primary reasons for poor student achievement is the wide dispersion of competencies and capacities of students in a single classroom. In a recent evaluation of an adaptive learning technology called Mindspark, the baseline assessment found students enrolled in a single grade were performing across five, six, or even seven grade levels.

Similarly, in Chile, an organization called Movimiento AULA (which is focused on mobilizing teachers to reform education policy), asked teachers how often they felt they were able to reach every single student in their classroom in a single lesson. And the response — not a single one. Finally, practitioners in the US market, where tech has been in classrooms for the past decade, often tell us that technology has most often driven learning outcomes when it enables a student-centered environment that simply cannot be achieved by a single teacher.

We believe that technology has the potential to aid student differentiation and personalization both in the classroom and outside of it to create a unique experience for all learners, which meets them where they are and drives achievement. While the markets for tech-enabled differentiated and personalized learning tools are very early stage, we believe the time for exploring investments is now. So how are we going to get there?

We need infrastructure in schools, or to embrace Bring Your Own Device (BYOD)
It is clear that we are at a unique moment with regard to mobile penetration around the world. There are more mobile phones in use than there are people on the planet. By 2020, 2.6 billion people will have smartphones, and more people in the world will have mobile devices than have access to an electric grid. Yet connectivity inside of the classroom has not necessarily kept pace with connectivity outside the classroom.

In a recent study commissioned by Omidyar Network, 99 percent of lower- and lower-middle-income high school students in Brazil reported having access to the internet at home, while 77 percent of public school students report not using computers at all in their classrooms and an additional 11 percent use them less than one time per week. In India, 40 percent of schools don’t have electricity and 74 percent of schools don’t have computers.

While we expect to see a significant increase in device penetration and connectivity in emerging markets in the coming years, this will depend on huge investments from national and state governments. We do see some promising public-private sector collaborations in this regard, including the work led by our partner Lemann Foundation in Brazil, and we hope this will continue.

In the meantime, let’s embrace BYOD and build for offline and low bandwidth settings. Several of our portfolio companies, including Siyavula in South Africa, have had success working with Telco providers to zero-rate access to educational resources.

Other organizations, such as Akshara, pair physical kits with digital teacher training resources. The offline capabilities of Akshara’s tablet-based assessment application, which is used with its mathematics program in government schools in Karnataka, allow for caching of data that is periodically synced with its central platform to provide insights on student learning gaps.

Second, we need to ensure that schools are able to access ed-tech solutions
In most countries around the world, the majority of students are in public schools. And unfortunately, sales to government come with long sales cycles, antiquated procurement systems, and significant political risk. Procurement protocols are often designed for purchasing inputs such as pencils, textbooks, and even laptops — but not for the software as a service product that most ed-tech companies provide.

Meanwhile, even where a significant proportion of students are enrolled in private schools, the private school markets are highly fragmented, making it very difficult for ed-tech companies to build sustainable sales and support models. And B2C models are by no means a sure bet given consumers’ willingness and ability to pay.

In Omidyar Network’s work in financial inclusion we have pioneered R2A, a Regtech for Regulators Accelerator. R2A’s platform allows central banks to experiment with new tech and startups — despite onerous procurement rules. It is a way to collapse the cycle faced by startups to sell to central banks and for central banks to understand and use previously unknown technology.

Perhaps there is a similar opportunity in education whereby schools receptive to implementing innovations form a “test bed” within the public system with the commitment to scale up effective, efficacious, and cost-efficient solutions.

Education philanthropies such as the Gates Foundation and the Lemann Foundation have sponsored important experimentation in ed-tech testbeds in public school districts in the US and Brazil. This could also start to address a longstanding challenge of holding ed-tech products to high efficacy standards before scaling them across multiple schools.

Tremendous promise despite challenges
Despite these challenges, across the world we are inspired by the promise of ed-tech to help address the quality issues we face today. Increases in broadband connectivity and smartphone penetration, reduced data costs, the growing body of digital education content, and evidence of the impact of differentiated and personalized learning of education outcomes all bode well for an increase in both VC and donor funding activity in ed-tech in the coming years.

We know that ed-tech is not a silver bullet, and that ed-tech products must be adapted to connectivity and capacity challenges in emerging markets. However, we believe the need for differentiation of learning environments and content is urgent in many countries outside the US, where grade-level competency is very rare.

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