The “viral” card has been won back: the results of the third quarter for the Russian EdTech

In preparation, data from companies, the Kontur.Focus system, and open sources were used.

The rating does not include:

• international projects, as well as projects of state organizations and universities. For example, the Open Education and Specialist.ru platforms;
• companies for which EdTech is an applied activity. For example, courses of traders at financial institutions;
• platforms that provide services for writing diplomas, term papers, etc.

“According to HolonIQ, the size of the EdTech market in the world in 2020 should be $227 billion, which is a 40% increase compared to 2019. This turned out to be higher than the predicted values,” says Dina Karakash, an investment analyst at the IIDF. — The situation with COVID-19 corrected the growth of the market in a positive direction. Thus, despite the decline in solvency in some client segments, the overall trend remains positive.”

Netology Group is constantly accelerating its dynamics and growth rates, we are ahead of the curve and plan to double revenue from all projects by the end of the year,” says Maxim Spiridonov, CEO of the company. – In the third quarter, users felt a certain fatigue from online learning in general, so growth, although it remained stable, was lower than during the quarantine period. In the autumn period, we again saw an increase in people’s interest in learning.”

“Over the past six months, our strategy has begun to yield tangible results,” says Yevgeny Lebedev, Yandex.Practical Marketing Director. “Due to the pandemic, several hundred thousand people have tried our free courses and found that they like everything. And the graduates, who just appeared in 2020, began to actively recommend our product.”

“The main thing that we continue to observe in the third quarter is that the audience of users who a year ago did not even think about solving educational problems in a remote format is gradually coming online,” says Andrey Sizov, executive director of the Foxford online school. “. “We see a growing interest in a fully distance learning format and strive to cover not only the needs for the main school track, but to be an end-to-end educational platform, accompanying the child at every stage of his growing up, in which education is central.”

“Business skills training, with enormous growth potential, remains one of the most undervalued sectors in education,” says Shabutdinov. “Especially in the face of economic uncertainty, when old business models have suddenly become ineffective, and there is nowhere to learn new ones. Other EdTech platforms are actively launching their own business training programs this year. Now there is a revolution in education: it is becoming clear that there are more effective ways to acquire skills, get a profession or learn a business than five years of walking around for no reason at all.”

“If in the second quarter year on year we made 17% less cash, then in the third quarter we grew by 27%,” emphasizes Dmitry Zatsepin, director of the educational business of Aktion-MTsFER. — In the third quarter, we studied more than in the entire second half of 2019. We don’t see churn in the third quarter, people want to study.”

“We see this in the slowdown in revenue growth in the third quarter compared to previous years,” admits Alexander Pershin, CEO of HTML Academy. — Our forecast for the fourth quarter is plus 20-25% compared to 2019. This again means a decrease in growth rates by about half, but in any case we expect growth.”

“In the fourth quarter, we expect a moderate increase in revenue and the number of users,” says Svetlana Kravchenko, Head of Kontur.Schools. — Traditionally, the end of the year can be considered the most successful for online education, but 2020 has made its own adjustments. We will try to maintain the current growth.”

“Now there are at least a hundred successful startups on the education market, which are included in the portfolios of many private funds, as well as funds with the participation of state capital, including RVC,” says Alexei Basov, Deputy General Director and Investment Director of RVC.

Alexey Solovyov, venture investor, founder of A.Partners, about investing in EdTech:

“Three important trends were observed in the Russian EdTech market during the third quarter.

• A deal for an additional round of investment in Skyeng, one of the leaders in EdTech, took place (and was announced in the fourth quarter).

This is important because this deal raises the bar on what rounds can be in the market and under what conditions.

• This quarter was the first post-coronavirus period in which the positive effect on the growth of companies (which it could affect) ended.

And the slowdown in growth suggests that the viral card has been played out, and we continue to live in a new reality.

• An event not directly related to EdTech: there were several IPO news during this period.

Ozon successfully entered the stock exchange, and companies such as FixPrice, Sravni.ru and ivi either announced their intention to become a public company, or even published a prospectus on the US SEC website.

For many participants in the rating, becoming a public company is essentially the only exit strategy for investors: they have already become too big for anyone to buy them. Listings of Russian companies on the stock exchange give us benchmarks, guidelines for how large a company can afford it. Its revenue should exceed $100 million (that is, 7-8 billion rubles), growth should be at least 50%, and profitability (if any) should be measured in double digits. In addition, the company must occupy either a monopoly-semi-monopoly position, or the player must have all the characteristics that allow their future investors on the stock exchange to believe that they will be able to consolidate this market and bring their share to 20-30% or even 40%.”