Wallex Industry Insights: Vietnam's Edtech Sector

Did you know that despite a decline in venture capital funding for Vietnamese startups in the first half of 2023, the edtech sector remained one of the well-funded?  

Vietnam has traditionally been a textiles and electronics manufacturing powerhouse, but not many know that the country’s edtech industry is one of its fastest-growing areas. The online education sector, with a remarkable compound annual growth rate (CAGR) of 44.3%, suggests that edtech in Vietnam is on the precipice of a boom period.  

Today, Vietnam is home to over 200 edtech startups, with a number of them receiving significant foreign investment. Investment firm KKR raised a total of USD $120 million for the EQuest Education Group via its Global Impact Fund, while the startup MindX secured SGD $15 million in a round of funding led by the Singapore-based Kaizenvest.

What's behind this strong support for Vietnam's edtech sector, what is going on in the space, and what does it mean for your business?  

Why Vietnam's Edtech Sector?

The seeds for this tremendous growth are only just beginning to sprout – mobile proliferation is high with an estimated 98% of internet users in Vietnam owning a mobile device, while more than 73% of the Vietnamese population are online daily.

But it takes more than being online for the edtech sector to grow. The Bain & Company consultancy noted in its e-Conomy SEA 2021 report that Vietnamese families were allocating a higher-than-average amount of their disposable income towards their children’s education, to the tune of around 20%. This figure surpasses the average within Vietnam’s Southeast Asian neighbours, where families’ expenditure ranges only between 6% to 15%.

The government is equally invested, spending an average of 18% of its annual budget on the development of the country’s education system in the 10-year period between 2011 and 2020. Currently, the edtech sector in Vietnam is projected to grow at an annual rate of around 10% to USD $487.57 million by 2027. Moreover, the Vietnamese government is putting its weight behind this edtech sector with an estimated recurrent expenditure of VND 275.7 trillion.

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What is the government doing to step up Vietnam’s education system development?

As mentioned above, the Vietnamese government is already allocating a considerable percentage of its annual expenditure towards developing the country’s education system in the period from 2011 to 2020.

But the government is already looking several steps ahead, with a vision to digitally transform the education and training sector in the preceding decade. The Vietnamese government and the Ministry of Education and Training have passed and approved a number of resolutions to that effect. They include issuing Official Dispatch 4771/BGDĐT-CNTT in 2023, which lays out a number of goals, which include the following:

• Maintain and maximise the benefits of learning management software (LMS) in connecting schools, and teachers with students (and parents) and organizing educational activities
  

• Ensure integration, connection, and data exchange between online teaching software and management software at education and training institutions
  

• Strengthen the development of digital learning materials (including electronic lectures, multimedia digital learning materials, electronic textbooks, simulation software, and other learning materials; develop an online question bank system for subjects)

Beyond the education sector, the government has approved a more wide-ranging digital transformation plan for the nation via the National Digital Transformation Programme by 2025. Among the objectives set out in this programme include the developing fibre optic internet infrastructure to cover 80% of households and 100% of communes, and for 70% of customer transactions to be made via digital channels.  

Not only will plans strengthen ICT infrastructure, but they will also boost demand for digital content. setting the stage for the edtech market in the years ahead. By prioritising ICT development and digitalisation of educational material and learning, the Vietnamese government has cleared a path for the growth and development of edtech solutions.

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What is the Outlook for the Edtech Sector?

With high rates of mobile penetration and a young and highly connected population, Vietnam’s edtech sector looks set to experience steady growth.  

One key advantage for the sector is that online or remote learning is not something new to its citizens. E-learning has been promoted in Vietnam’s public universities since 2007. Moreover, the COVID-19 pandemic accelerated both familiarity and demand for online learning, with the momentum carrying over into the post-COVID era – as seen by the continued inflows of investments in Vietnamese edtech startups.

But edtech is much more than online learning and courses. It is fertile ground for the introduction of new types of training and business partnerships. For instance, Japanese firm Gakken Holdings is partnering with Vietnamese edtech firm KiddiHub Education Technology, who owns and runs a pres-chool review platform. Gakken Holdings plans to harness the brand recognition of its local partner to introduce non-cognitive education, which focuses on non-academic skills such as critical thinking for pre-school children.

Stronger support for vocational education

The edtech opportunity extends far beyond the traditional education system that goes from pre-school to higher learning. Vocational education has also been earmarked by the Vietnamese government for development and further innovation – through Directive No. 21-CT/TW. This will entail greater allocation of resources and budget to vocational education, particularly for high-quality training targeted at key industries that will help to accelerate the industrialisation and modernisation of Vietnam.

By 2030, the government’s goal is to funnel up to 50% of high school students into vocational education. It is also estimated that by 2030, the country will have 90 institutes for vocational education that nurtures talents to be competitive in key industries. Efforts to drive the development of vocational education can be complemented by innovative edtech tools built around the unique needs of these industries.

More learning formats, more opportunities

What is really promising is that Vietnam’s edtech sector has much more ahead for it. Currently, much of the sector and the companies developing edtech tools are focusing on a narrow segment of products such as content delivery, involving pre-recorded lessons and exam banks, as well as live online classes.

Mobile apps present a fantastic opportunity in this case and there is an appetite for such tools from both users and investors. One example is ELSA, an English language learning mobile app which uses AI to provide learners with instant feedback. The startup, which has garnered over 10 million downloads in Vietnam and over 40 million globally successfully raised $20 million in its latest round of funding.

There is also space for B2B solutions in the space, such as school management systems in academic institutions and customised digital platforms integrating the OMO (online-merge-offline) model to suit the unique needs of different subjects or topics.  

How companies doing business in Vietnam leverage the edtech boom?

With startups receiving more funding and the Vietnamese government’s greater commitment to the development of education systems, it is only a matter of time before innovative edtech products and platforms are launched. This will create a strong base of Vietnamese edtech talent which businesses can engage on freelance or permanent arrangements for their own edtech projects. This is where it will be helpful to be able to convert currencies to make payment, including SGD to VND, USD to VND, EUR to VND, or AUD to VND.  

A crucial ingredient to the digital transformation of Vietnam’s education system is devices. One of the objectives laid out in Official Dispatch 4771/BGDĐT-CNTT, which was mentioned earlier, calls for the investment in computers for teaching computer subjects, with no more than 3 primary students sharing a single device, and for high school students to be allocated their own device for learning. This creates opportunities for businesses specialising in the manufacturing or exports of hardware such as desktops, laptops, and office equipment providers such as printers.  

If you recall, it was mentioned earlier that the country’s Ministry of Education and Training manages only around 50 out of 42,000 educational institutions in Vietnam. For businesses locally and abroad, this translates into an opportunity to engage directly with a significant number of non-governmental affiliated institutions, collaborating to build and deliver innovative edtech products and services such as content management systems, curriculum development tools, and adaptive learning platforms.

There is also the user perspective to take into consideration, as it is essential that they can navigate the platform seamlessly and seek assistance when needed. This provides an opening for businesses outside the traditional education sectors of content or curriculum development.  

Consultancies in UI/UX design can step in, offering expertise in crafting user-centric interfaces and experiences. Additionally, businesses specializing in learning analytics can introduce dashboards providing valuable insights into student progress and learning journeys, allowing for continuous improvement of edtech platforms.

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Ride Vietnam’s Edtech Wave with Wallex

Wallex is designed to help businesses like yours convert and send money to Vietnam with better speed, support and savings. Our fully digital platform makes payments to Vietnam fast and seamless, whether you’re converting SGD to VND, USD to VND, GBP to VND, EUR to VND, or other currencies.  

Settlements take no more than one business day and with our global network of liquidity providers you’ll get the most competitive FX rates, zero hidden fees, and maximum savings.  

What truly makes Wallex the ideal partner for your cross-border needs is the support you’ll enjoy from your dedicated Account Manager. They will always be ready to support your business’s needs, assist to expedite urgent transactions, and address any issues you face.  

Are you ready to ride the momentum of Vietnam's edtech wave? Speak to us today!

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