From Rajit Malhotra at EdSurge:
But how long will the big checks keep coming? In recent months, Beijing’s increased regulation of online education platforms has made investors more cautious.
This July, the country’s Ministry of Education issued guidelines to regulate the content and duration of online education sessions, and to ensure that teachers have the right qualifications. Some of this oversight could well make investors wary.
Last month, Reuters reported that Tencent Holdings has called off plans for a new $150 million investment in VIPKid.
While the steady deal flow suggests that investors still see room for companies to gain additional market share in China, how many large ones can coexist in the space remains uncertain. The competitive landscape, paired with increasing regulatory pressures, may lead investors to consider the other billion-plus sized market: India. Some already are, with the Qatar Investment Authority and Owl Ventures having invested in Bangalore-based Byju earlier this year.
I wonder how the bloom coming off the Unicorn rose will affect these investments. The “show-profit-later” ethic of unicorns in other categories – like Uber, WeWork, Slack, etc – has not been faring well of late.
That’s the premise of this article, which says unicorn exits in India have the “exits blocked.”
I advised one investor not to put money in the latest round of Byju’s. He listened.
Byju’s is the Indian education company similar to the non-profit Khan Academy in its offerings. The plan now is international expansion, beyond India. I wish them success and hope I’m wrong, but I am skeptical of its core product offerings (after focus grouping it with my 10-year-old), and can’t get my head around its $5.75 billion valuation.