AFRICA: ED TECH
Conquering a continent To reach unicorn status in Africa’s private education market, investors must understand fully its challenges and create innovative continent-wide solutions, writes Henry Warren, chair of African ed tech Watobe
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world’s learners will be located in African countries and, t the tail end of the last century, Bob the Builder by measure of accessible population, Africa will soon be went to Japan. Or, rather, HiT Entertainment, the home to the world’s largest education market. company that had owned the distribution rights to the kids’ TV show, decided that the country’s roads were The market is big, for sure but is it ‘broken’? Across the paved with gold as it sought out new Eastern territories in continent, 40% of children fail to reach an educational minimum measured by the United Nations. However, this is which to expand. The firm had no prior experience of this less surprising when one considers the educational budgets market or others like it but, its executives thought, how of African countries. Tanzania, for instance, has an education hard could it really be? With hindsight, what happened should have been budget equivalent to just 2% of England’s, with twice the preventable. The reasons why will later become clear. number of children. Add to this a shortage of around 1.2 Much like you, I’ve been navigating the daily ups and million teachers across the continent and it’s easy to see downs of the coronacoaster, the 21st century’s most why minimum standards are not being met. What about ‘complex’? Well, all depressing ride. Most of my video conferences start with the “we live in education markets are complex, some strange times, don’t we?” preamble. Such more so than others. The education chatter seems to have – for now, at least industry is famous for turning large fortunes into small ones – and Africa – replaced small talk about the weather Africa requires is no exception. The continent’s state which is, I feel, at least one positive. investors to At some point, conversations inevitably sector is so complex and inefficient that think big – far turn to ed tech, my area of expertise, the private sector is booming. In the UK, bigger than they and its ability – or, as in many cases, around roughly 7% of the population is do in the UK inability – to deliver both profits and privately educated. Across Africa, this efficacy. Then, more often than not, talks figure is around 24% – and rising. segue to “where” – namely, where should But is there actually any real money my clients, who are mainly investors there? Yes, there is – and I’ve seen it for and chief executives, be looking for myself. I have been chased down the opportunities? streets of Shinyanga in rural Tanzania by mothers wishing to pay me $10 for education resources. I have seen Kenyan, The answer is Africa Ghanaian and South Africa parents pooling significant I follow a simple rule when identifying education markets in portions of their salaries to finance private education – and which to invest. I’m only really interested in those that are have heard their cries of delight when solutions actually BBC. That is, big, broken and complex. Africa’s education work. The demand is there; so is the money. industry fits the bill on all fronts. China’s much-vaunted education market, in which interest Think big has grown rapidly among foreign investors in recent years, Africa requires investors to think big – far bigger than they do also fits these criteria to an extent; it’s certainly big and in the UK. Frankly, no African country alone (with the possible exception of Nigeria) is that interesting to investors. One complex, and both regions have a lot of children. But by the end of the century, the population of Africa will be cannot build a unicorn serving just Rwanda. But one absolutely 4.5-times that of China. A demographic shift is already can if one understands fully Africa’s wide array of countryunderway and within the next decade, the majority of the specific markets and plans to scale across the continent.
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EducationInvestor Global • June 2020
