As much of China was locked down amidst the coronavirus outbreak, many schools had to postpone their new term. Demand for online education, be it an alternative for usual teaching sessions, or tuition, surged. 

An immediate beneficiary is Alibaba’s team collaboration tool DingTalk. The app has optimised for both remote working as well as online education: 

Alibaba mentioned that almost 50 million students are now using DingTalk for online education. 

Just not sure how much they appreciated the tool. If you look at the ratings students have been giving, there are clusters of five stars (from ‘good students’) and one stars (from those who prefer to not do any coursework). 

Regardless of whether the 50 million students will still use the tool after the outbreak, online education is now receiving more attention than ever. 

Heating up in Southeast Asia 

In fast, just this week, already 4 VC funds in China asked us about the sector in Southeast Asia and in particular Indonesia. 

The sector in Southeast Asia is booming as well. Just yesterday, Nick Nash’s Asia Partners announced they are leading a US$35 million round in SnapAsk, a Hong Kong-based on-demand tutoring platform. 

The platform, which already counts Southeast Asia as one of its key markets, will use the fund to grow its Southeast Asia business, and enter new countries such as Vietnam. 

This is less than 4 months after Ondine Capital led the US$10+ million B1 round of SnapAsk. 

Just two months ago, Indonesia’s online education platform Ruangguru raised US$150 million series C led by General Atlantic and GGV. 

And it seems after Nadiem Makarim, Gojek’s founder, became the Minister of Education and Culture, investor confidence in the sector is rising up. 

It also became more competitive: 

Of course, the number of online players is still limited compared to China. We have done some simple comparison:

We believe because of the relatively small number of players, many would still attempt to join the fray. 

However, balancing profitability with growth traction, especially in the short term, could be a challenge. 

You need to be smart with the model so that people will actually be willing to pay (and continuously pay), otherwise you need to think about other avenues to make money. 

Not impossible but it would take a bit of effort to crack this. 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.