A formidable newcomer is reshaping the educational narrative within Indonesia’s dynamic education technology (EduTech) landscape. Positioned as a significant player within EduTech in Indonesia, Duolingo is introducing novel approaches to learning.
The current state of the EdTech industry in Indonesia
Data from Tech in Asia shows a significant increase in investment flow into education technology (also known as EdTech) companies since 2020. The number of funding deals for startup EduTech reached 18 agreements, driven by the online learning trend due to the pandemic.
Although the number of deals in the following years was lower, it still indicates a healthy figure. Tech in Asia identified at least 59 EdTech technology companies operating in Indonesia that are divided into six categories:
Categories | Description |
K-12 | Providing online learning materials for primary and secondary education. |
Professional and upskilling | Offering materials for professionals to advance their careers. |
School digitization and learning management systems (LMS) | Assisting in digitalizing school operations and teaching efficiency. |
Education loans | Providing educational loans to students. |
Children’s activities | The program offers a range of activities designed to support and nurture children’s interests and talents. |
Language | The service offers specialized content for learning foreign languages. |
The professional and upskilling sector has the most players, totaling 29 companies. The figure has grown significantly with the introduction of the government-initiated Kartu Prakerja program.
Since its launch in April 2020 until the end of 2022, the Kartu Prakerja Program has been used by 16.42 million people.
Duolingo’s investment in SEA language learning
Duolingo is a language app based in the United States. The company intends to expand its influence in Southeast Asia, a competitive EduTech market with approximately 1 million daily active users.
Haina Xiang, Duolingo’s Regional Marketing Director for Asia Pacific, revealed that the company’s most rapidly growing markets in this region include Vietnam, Indonesia, and Thailand, with users spending around 13 to 15 minutes daily on the app.
Despite intense competition from various EdTech companies in Southeast Asia, particularly in the language learning market, Duolingo aims to capitalize on its expertise in gamifying online lessons instead of primarily focusing on test preparation.
Read more: 15 Strategies for global business expansion in Indonesia
The potential for EdTech investment
The EdTech sector offers significant growth potential driven by increasing demand for tech-based education solutions. Various factors influence this potential:
1. Government policies
Government initiatives and education reforms can create opportunities for EdTech companies. Regulations related to education, technology, and data privacy are crucial.
2. Economic impact
Funding levels in education, especially for digital infrastructure and technology, can boost the EdTech market. Economic health affects affordability and accessibility.
3. Changing societal needs
Growing demand for lifelong learning, skill development, and flexible education options drives EdTech adoption. Digital literacy is crucial, and efforts to enhance it support sector growth.
4. Technological advancements
Innovations like AI, VR, AR, and cloud computing enhance learning experiences and accessibility. Technology infrastructure quality and availability play a significant role.
5. Environmental responsibility
Companies focusing on eco-friendly practices can gain a competitive edge.
6. Legal considerations
Data privacy, security, and consent regulations impact EdTech. Intellectual property laws and patent regulations affect innovation and competition.
The combined influence of these factors fosters expansion and creates opportunities within the education technology sector.
Why should EdTech companies invest in Indonesia?
Indonesia, the largest Southeast Asian economy, saw its digital economy grow by 11% during the pandemic, reaching a value of USD 44 billion.
The country has a youthful demographic with a population of 267 million, half under 30 years old, and around 60 million students. Almost 70% of Indonesians had internet access in 2020, one of the world’s highest rates.
There is also a rising demand for high-quality and extracurricular education due to increasing aspirations. According to a Ravenry report, Indonesia’s EdTech industry, valued at USD 112 million in 2019, is projected to grow by 24.9% annually.
Approximately 113 million Indonesians will need retraining to stay relevant in the job market by 2030. The government aims to add 57 million skilled workers to the economy by the same year.
Duolingo inspires EdTech investment
Duolingo has a unique outlook on competition. Instead of seeing other educational apps as foes, Duolingo considers itself a competitor for users’ attention, not just against educational apps but also entertainment giants like TikTok and Facebook.
However, Haina Xiang, Asia Regional Marketing Director, acknowledges the varied preferences in Southeast Asia. Some learners may be drawn to local alternatives, and Duolingo sees this as a chance for personal growth and a way to enrich the market.
Challenges and opportunities in the EdTech sector in Indonesia
EdTech companies face the ongoing challenge of staying relevant and innovative in an industry that is seeing a general decline.
As schools reopen, these businesses, particularly those focused on digital education in Indonesia, need to adapt and complement traditional learning. The need for digital infrastructure is another hurdle for their growth.
Traditional and digital learning encounter the common issue of ensuring students can easily absorb the materials without compromising the quality of education.
These are persistent challenges faced by EdTech companies in Indonesia.
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Start investing in the Indonesian EdTech market
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