The Edtech 2020 Mapping Alert
It can be said, without a doubt, that 2020 was the year of edtechs. Because of the demand generated by the pandemic, the education sector had to reinvent itself. Therefore, the existence of companies focused on the education industry that was something of a godsend for educators, with technological solutions that allowed thousands of young people across the country to continue studying during the worst months of COVID-19.
I don’t say this alone. Lúcia Dellagnelo, CEO of the Centro de Inovação para a Educação Brasileira (CIEB) says so categorically in the Edtech 2020 Mapping, prepared by CIEB, together with the Brazilian Association of Startups (Abstartups). According to her, “companies that develop educational technologies had a unique year. It is likely, even, that they have started a new stage if we think that schools will not return to the pre-pandemic stage.”
That is very positive. However, a question follows: What exactly is the face of education startups in Brazil today? How have they engaged with society, given their importance in this critical time we have been living through?
Birth Problems
According to the Mapping, 58.7% of Brazilian startups are concentrated in the Southeast region, with the state of São Paulo leading the concentration of edtechs, housing 37.8% of them. At the bottom of the table is the North of the country, with only 2.3%.
This data is something that needs to be deeply considered, because it reflects a deficiency of most industries in Brazil: their concentration in a single region. To draw a parallel, we just need to analyze the map of Spatial Distribution of Industry prepared by IBGE in 2016, the last year of the survey.
This is exactly one of the reasons that most contributed to economic inequality in our country during the industrial advances of recent decades. However, considering the digitalization of the economy, especially in the post-pandemic time, this scenario may change, leading to an industrial decentralization, as a paper published by BDO emphasizes. As they describe: “The trend toward digital is not new; it has just taken center stage,” the study emphasizes.
This means that we have an opportunity to reconfigure an important factor of Brazilian economic production — we have the opportunity to make an industry and align its economic potential with greater equity for the entire country. However, this must be done now, otherwise we will be repeating the paradigm of Brazil’s first industrialization, throwing away opportunities to generate wealth, employment and income for other regions.
Relationship problems
Besides the problem of localization, there is also a problem in the relationship between startups and customers. As the report emphasizes, startups have offered services that address deficiencies and needs in the education sector. Half of the 566 startups currently active work with Software as a Service (SaaS) — that is, they solve structural and accessibility problems for the digitalization of education. Only a small portion work with business models from the B2B2C world, such as marketplace ones (6%). Direct-to-consumer sales are even smaller (4.1%).
Thus, this means that localizing the presence of edtechs where the problem or opportunity lies is more than necessary. However, as the report itself points out, many companies find it difficult to create a relationship with the public, especially with the state sector. It is difficult to operationalize a startup in Brazil, because its business format depends on the circulation of the idea or POC through the market.
According to the report, these difficulties lie in two aspects: first, in locating opportunities. One of the main clients of startups in Brazil is the government — federal, municipal, or state — but, says the text, “many startups report difficulties in mapping procurement edicts,” despite the existence of certain innovation programs, such as Pitch Gov.
The other problem is in making sales happen — and the main contributor to that one is bureaucracies, especially regarding regulations and communication. It is difficult, as a Politize! article says, to guide oneself in a Brazilian PPP, which generates many obstacles. Within this problem, there is also the fact that the commercialization of ideas is put in check by the impossibility of a single startup to fit all the prerequisites of the calls for proposals.
As in so many issues of the Brazilian industry and economy, it is urgent that regulators and governments open up more to allow a greater diversity of startups. Because we are exactly at the moment of ensuring the presence of edtechs in the Brazil of the future. And if we look closely at the latest news about investments and valuations of national edtechs, we will see that the market is boiling with opportunities and great gains for those who bet on the solutions presented by these machines of innovation.
Why not guarantee the future now?
