Africa

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

At the tail end of the last century, Bob the Builder world’s learners will be located in African countries and, went to Japan. Or, rather, HiT Entertainment, the by measure of accessible population, Africa will soon be company that had owned the distribution rights home to the world’s largest education market. 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 which to expand. The firm had no prior experience of this minimum measured by the United Nations. However, this is market or others like it but, its executives thought, how less surprising when one considers the educational budgets hard could it really be? of African countries. Tanzania, for instance, has an education

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. depressing ride. Most of my video What about ‘complex’? Well, all 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 – replaced small talk about the weather Africa requires fortunes into small ones – and Africa which is, I feel, at least one positive. investors to is no exception. The continent’s state At some point, conversations inevitably turn to ed tech, my area of expertise, and its ability – or, as in many cases, think big – far bigger than they sector is so complex and inefficient that the private sector is booming. In the UK, around roughly 7% of the population is inability – to deliver both profits and do in the UK 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 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. to pay me $10 for education resources. I have seen Kenyan,

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 complex, and both regions have a lot of children. But by exception of Nigeria) is that interesting to investors. One 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.

Henry Warren, Watobe

One absolutely can if one pursues a business-to-consumer model, rather than business-to-business (under which products and services are sold to schools and governments). One absolutely can if one has an enticing product that parents love and one has the time and nous to iron out those operational creases along the way.

So, what’s any of this got to do with Bob the Builder, HiT Entertainment and its Japanese adventure?

I have no doubt that the next big race in education will be for Africa. I am also equally sure that many companies and investors will jump in feet first without truly understanding the continent, its many cultures, markets and ways of working – just as HiT Entertainment did twenty years ago in Japan.

What did it get so wrong, then? Bob had only four fingers – a common and innocuous trait of Western cartoon characters. But in Japan, where members of Yakuza gangs infamously chop off their little finger as an act of fealty and bravery, it was a sure-fire sign that Bob was renovating by day and garrotting by night. Yes, HiT Entertainment had inadvertently given Bob the Builder a second career as a hitman, which at the time introduced children to the alternative meaning of “fixing”.

Because it had failed to do its homework, the firm eventually had to withdraw the cartoon after a deluge of complaints, despite having spent large sums re-rendering Bob’s hands. It was too late; the damage was done.

In the race to conquer the African education market, there will be winners and losers. Ultimately, it will be the children that will win, because right now they are being left behind but if you do decide to enter the market, just make sure you understand it fully first. n Henry Warren is the former director of innovation at Pearson. He is chair of Watobe, an African ed tech company, and is an investor in and advisor to ed tech businesses.