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The edtech (educational technology) market in Vietnam has emerged as one of the most rapidly advancing markets globally, capturing attention with its significant growth trajectory. The increasing number of startups and the substantial influx of investment capital pouring into the industry are clear indicators of its thriving ecosystem. This growth signifies the recognition of the transformative potential of technology in education and highlights Vietnam's commitment to embracing innovative solutions to enhance learning experiences. As the edtech sector continues to flourish, it presents promising opportunities for both local and international stakeholders to contribute to the educational advancement of Vietnam and shape the future of learning.
A Glance at the Global Edtech Industry
The global edtech and smart classroom market is poised for remarkable growth, with a projected increase from US$133.55 billion in 2023 to a staggering US$433.17 billion by 2030, reflecting a robust compound annual growth rate (CAGR) of 18.3%. This growth signifies the immense opportunities that lie within the education sector today. As educational institutions and learners recognize the value of a comprehensive learning environment, they are proactively investing in the advancement of education.
According to HoloniQ, a leading provider of education intelligence, approximately 3% of global education expenditure is currently allocated to digital infrastructure. This highlights the growing importance placed on digital transformation in education. Notably, the potential impact of digital transformation is expected to soar from US$6 trillion in 2018 to a staggering US$10 trillion by 2030. These remarkable figures signify the tremendous potential for growth and adoption of edtech and smart classroom solutions in the years to come.
Highlights of Vietnam’s Edtech market
In the case of Vietnam, investing in education and training is consistently a top priority for the Vietnamese government, recognized as a crucial element in driving rapid and sustainable economic development. As a result, significant resources from the state budget are allocated to this field, ensuring the necessary support to enhance the quality of education.
According to the Government's report on education activities and the implementation of the education budget in 2022, the estimated recurrent expenditure for the education and training sector in the same year is VND 275.7 trillion. This amount accounts for approximately 15.45% of the total state budget expenditure, which falls short of the minimum requirement of 20% set forth in Resolution 37 and the Education Law. Recognizing this gap, the government intends to continue prioritizing education in the coming years by allocating a substantial budget for investment.
Notably, the field of edtech receives particular attention in this investment strategy. In July 2021, the government announced a target to achieve online training coverage of 90% for universities and 80% for high schools and vocational training institutions by 2030. This ambitious goal serves multiple purposes: preparing a high-quality workforce for future demands, especially in digital skills, fostering the growth of startups, and attracting investments and funds dedicated to the development of the Edtech market.
Vietnam’s Edtech Market Size
According to a report by Ken Research, Vietnam has emerged as one of the fastest-growing online education markets worldwide, with a remarkable compound annual growth rate (CAGR) of 44.3% in the online education sector. Projections indicate that the market is set to reach a value of US$3 billion by year end 2023.
This rapid growth is a testament to the increasing demand for online education in Vietnam. Factors such as improved internet accessibility, the proliferation of mobile devices, and a growing emphasis on digital learning have contributed to the surge in online education adoption. In addition to that, accelerated by Covid-19, students and parents are used to the concept of online learning. As technology continues to advance and the benefits of online learning become more apparent, Vietnamese learners are embracing digital platforms to enhance their educational experiences.
FDI Inflow into the Edtech Sector
As indicated in a report by GetJSC, the Vietnamese edtech market has experienced substantial investment activity, positioning it as one of the top four industries capturing investor interest in Vietnam. In 2022 alone, the market attracted over US$30 million of investment capital, indicating its growing significance and potential. Continuing this momentum, the early months of 2023 witnessed a series of significant investment deals in the Vietnamese edtech landscape, coinciding with a wave of unexpected layoffs in prominent tech companies.
To be specific, in April 2023, MindX, a Vietnamese startup specializing in technology skills training and programming, secured a notable investment of $15 million from Singapore-based Kaizenvest. This injection of funds is expected to provide crucial support for the expansion and development of MindX in the edtech market.
Furthermore, Vietnam Education Group EQuest recently announced a successful fundraising round on May 19, resulting in a total capital raise of $120 million from KKR, through the Global Impact Fund. EQuest intends to allocate the newly acquired funds to enhance its K12 Online Marketing and School Management System.
Additionally, in May 2023, Teky Alpha JSC, another edtech company focused on coding training for younger students, successfully secured US$5 million in investment from Singapore's Sweef Capital Investment Fund, with participation from Strategic Year Holdings. The investment is expected to facilitate Teky's expansion of educational services within the public education system and the provision of extracurricular programs catering to children aged 5 to 18.
These substantial investments underscore the attractiveness of Vietnam's edtech sector for both local startups and international investors. As the digital economy continues to thrive, edtech is poised to receive increased attention and investment in the foreseeable future. The dynamic nature of the market presents vast opportunities for innovation, collaboration, and transformative advancements in the Vietnamese education sector.
Dominant Players in Vietnam’s Edtech Playfield
The EdTech industry in Vietnam is rapidly growing and drawing inspiration from the global EdTech landscape. In addition to importing products from foreign companies, domestic enterprises are also asserting their position in the local market.
Source: Vietnam Edtech Report 2023
The number of new businesses registering in the EdTech sector is increasing at a rapid pace. In 2022 alone, Vietnam's EdTech sector witnessed significant activity with over 100 new EdTech companies emerging and attracting foreign investment.
Prominent software companies in Vietnam, including FPT, Viettel, and VNPT, are recognizing the potential of the EdTech sector and actively developing products to cater to its demands.
Furthermore, online teaching applications and platforms like CoderSchool, Marathon, Elsa, and AI Clevai have successfully secured multimillion-dollar investments as they compete to capture users in the market.
Domestically, Vietnamese companies are dominating the EdTech landscape, with LeGia Group leading the way in providing and operating technology experience centers that utilize modern technologies like virtual reality and augmented reality. Other companies, such as Thien Ha Xanh, offer Azota - an assignment and grading software to support schools, as well as the WEWIIN online school platform that supports blended learning in Vietnam.
The STEAM/STEM education segment has also flourished in Vietnam in recent years, particularly in grade 12, aiming to enhance students' technology knowledge. Leading companies in this segment include Vinarobot and Sunbot.
However, the EdTech market in Vietnam is still relatively new and emerging. Existing EdTech products only address a small portion of customer needs. Although there is great potential for development and a diverse range of product offerings, the quality and distribution of these products vary. EdTech platforms developed for schools and businesses are still in their infancy and lack significant promotion. Currently, more than 80% of EdTech companies in Vietnam primarily focus on the 12th-grade and foreign language markets. Within each category, products tend to be highly similar, and differentiation has yet to be fully realized.
Final Thoughts
Vietnam's EdTech market is experiencing remarkable growth and presenting lucrative investment opportunities. The sector's rapid expansion, coupled with the country's strong commitment to education and digital transformation, makes it an attractive prospect for those seeking to make an impact and achieve significant returns. At Viettonkin Consulting, we specialize in guiding investors through the intricacies of Vietnam's EdTech market. With our deep understanding and expertise, we can help you identify high-potential investment opportunities and navigate the sector with confidence. Partnering with us will provide valuable insights and strategic guidance for making informed investment decisions.
Now, stay tuned for our next article, where we will delve into the future outlook and forecast of the EdTech industry in Vietnam. We will examine emerging trends, growth opportunities, and key factors driving the sector's continued expansion. Don't miss out on the valuable insights that will help you stay ahead of the curve and make well-informed investment choices in Vietnam's thriving EdTech market.
Take advantage of Viettonkin Consulting's consulting services to unlock the full potential of Vietnam's EdTech sector. Contact us today to embark on a successful investment journey and capitalize on the exciting prospects that lie ahead.
