Why Are There No Large Market Cap Companies Globally in Edtech? (substack.com)
- Reference: 0180449177
- News link: https://news.slashdot.org/story/25/12/24/0846214/why-are-there-no-large-market-cap-companies-globally-in-edtech
- Source link: https://substack.com/@refsrc/note/c-191201948
> There are various reasons that explains this: (i) A large part of the global education spend goes towards formal education (schools, colleges and universities), which are typically either run by governments or are not-for-profit institutions;
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> (ii) It is difficult to replicate education quality at scale in our view, since most teachers would have a different pedagogy, and thus standardization is harder to achieve vs that in other internet categories;
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> (iii) Education is fragmented - it includes various fields (schools, undergrad courses, medicine, engg, management, etc.), each with their own curriculum, and the same being vastly different across countries globally; this makes scalability difficult beyond a few certain specializations and regions.
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> Additionally, we believe the ability for online education to capture a sizable value share of supplemental education is limited since the perceived value of offline, including that from community, in-person engagement and doubt solving, rigour, etc., is typically higher.
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> However, we note that before China's double reduction policy in 2021, TAL and EDU had market caps of up to US$50 bn; these companies were mostly domestic focused and on the K-12 tutoring segment, which has large volumes. Similarly in India, Byju's reached a peak valuation of US$20 bn+ (link; again, focused on K-12), before issues around governance etc. impacted the business.
[1] https://substack.com/@refsrc/note/c-191201948
High Costs (Score:2)
Software is profitable because once its made copying is virtually free; students need access to teachers not a digital lesson plan.
There's also ... (Score:2)
... nothing terribly unique about "edtech".
Videos. Text. Forms. Reporting. Not too difficult to just use generic parts to assemble a whole.
Ed tech kills itself (Score:3)
I've architected a lot of backend HW for Ed Tech companies but have never really been involved on the SW side, but I have seen the same story play out dozens of times in the past 20 years. Some SW comes out, learning assistance, management, or whatever and they make so much profit. But, they hit these walls either because they complement an existing system, run into another competitor, or just run out of mindshare. Then they either acquire or get acquired to fill the gap and load up heavily on debt. They have or are acquiring massive free cash flow which can easily finance the debt. They do the acquire be acquired thing a couple times then they hit a bump, then someone else steals the air out of the room, and instantly the free cashflow stops and the debt crushes them. Then some other company comes in doing the same thing, thinking they're the most innovative company around and it's really the Xth spin of the wheel and a matter of time before the acquire be acquired to bankruptcy cycle starts again.
Benesse monopolizing EdTech in Japan (Score:1)
You don't want a company like Benesse in your country because it only drives up the costs for education while it lowers the quality for public education.
Edtech is too limited (Score:2)
At this time, good teaching either comes with a good teacher (so no need for edtech) or a learner that can learn self-directed (not many of those around, but still no need for edtech).
Re: (Score:2)
I agree this is the answer, teaching is a skill and a very human-centric one. All the tech in the world can't matter if you don't have that foundation of good teachers with good curricula in place.
Enshitification strikes (Score:2)
Companies these days are engaged in enshitification of their products. The company starts out with grand schemes, attracts investment, delivers products, saturates their market, etc. And then the invested money wants better returns. So companies, being run by MBAs, turn to what they know: resize the product down so that it costs less to produce figuring customers won't notice and/or customers are already enthralled with their product. Customers get disillusioned, company investors double down on enchitifica
Don't care if I'm modded down for this... (Score:4, Informative)
...but why is this headlining on Slashdot?
1) The entire "news" blurb is rooted in a single Substack comment from "Manish Singh", who appears to work for "India Dispatch", which, despite the name's suggestion that it's a news publisher, is as best as I can tell, an [1]independent commentary blog not associated with any major news publication. [indiadispatch.com]
2) There are no credited sources of reference from his written piece. He claims his information is from "Goldman Sachs", but Googling sentences from his "quoted material" turn up nothing on Google or Bing except for his posting and other websites that link to it. The only place in what he writes that says "link" is not clickable, as what is posted is not hyperlinked plaintext, but rather a .JPG copy & paste of the supposed Goldman Sachs quote.
3) Given today's age of AI slop, the fact that this "Goldman Sachs" article is posted as a .JPG makes me all that more suspicious that this information was taken from ChatGPT instead of an actual article, especially given that the article reads like ChatGPT.
I would hope that Slashdot editors would do some more due diligence in the future to verify information provided in story submissions before posting content like this to its homepage.
[1] https://indiadispatch.com/
Thank God. (Score:2)
Thank God our education is not run by some huge corporation like MS or Meta.
Can't we just have schools and teachers, universities and profs, like we had in the my day. A system that obviously worked really well, it educate the people who built the world we now live in.
Because "EdTech" is not a word (Score:2)
Similarly, there are no large companies involved in MonkeySlaves, ChocolateHelicopters, or ShoeRestaurants.
EdTech is a made up word by someone trying to convince people that this niche business is somehow more than it is.
Is there an education industry? Yes. Do they use technology? Yes. But the market is small.
Here are large sectors:
Petroleum
Transportation
Agricultural
Telecom
Internet
Software
Hardware
Notice how they are all single words? Because their industry is large enough that one word is used to descr
Cheating (Score:2)
There are no large market capitalization companies in education technology because nobody has solved the problem of how to remotely proctor tests and exams.
Because nobody likes returns in the far future (Score:3)
Especially not from "human capital".
The people are there to be squeezed dry quickly.
The faster and drier, the better.