How are EdTech startups facing the challenges brought by the largest demand for highly-engaging, highly-effective skill acquisition technologies the world has ever seen? Tecnolatinas, a Latin American example, could very well give us a taste of how companies are keeping up with the increasing demands and sophistication of the emerging “digital natives” students and customers.
A first-of-its-kind report titled “Tecnolatinas: Latin America riding the technology tsunami,” prepared by Surfing Tsunamis and NXTP Labs with support from the Inter-American Development Bank, seeks to offer a taxonomy of this promising segment, which boasts an estimated $37.7 billion USD in value, 9 unicorns (companies valued at over $1 billion USD), and an increasing footprint in global markets.
Among the 123 Tecnolatinas identified, EdTech startups include:
- OpenEnglish: Venezuela, 10 years old, $100-500 million USD group.
- EduK: Brazil, 3 years old, $50-100 million USD range.
- Descomplica: Brazil, 5 years old, $25-50 million USD group.
The report also highlights the role of Acámica as a provider of free, MOOC-based training in web design and development and its course “The Art of Latin American Entrepreneurship” (“El Arte de Emprender en América Latina“) in particular.
Among the non-learning Tecnolatinas, however, some of the key attributes often associated with EdTech can be seen. Community building and peer-based knowledge creation, machine and deep learning, and engagement through gamification are common practices across the board.
The report lists a series of factors that have made it possible for the development of substantial value this time around. While Tecnolatinas have existed since at least the late ’90s, only now does the field finally include the opportunity for more companies to thrive and grow quickly:
- Lower entry barriers as the relative costs of infrastructure (with cloud computing), prototyping (with 3-D printing), and marketing (via social media) have plummeted for regional companies.
- Lower taxes and tariffs, thanks to trade agreements, have allowed for competitive prices globally and more accessible outsourcing.
- Low cost of hiring professionals with skills comparable to those in the industrialized world at a fraction of the wages.
- In some countries, increased agility in the process of doing business. (Legal and bureaucratic hurdles remain a common complaint, however, despite the improvements.)
- Further down the road, the increasing availability of mobile devices could create new markets in secondary and tertiary education given the low incidence in the region. The anecdotes of parent and child graduating together could become more common in Latin American cities.
Among all the ‘Tecnolatinas,’ those from Brazil, Argentina, and Mexico comprise over 83% of the companies, with São Paulo, Buenos Aires, and Mexico City as capitals. (Interestingly enough, all three cities have held MoodleMoots recently.)
The “Tecnolatinas” report was made using startup directories including Crunchbase, Angel List, and DealBook, joined with public sources and sought the opinion of regional experts for the valuation and classification methodologies.