Four Most Promising Sectors of the Education Industry
The flow of capital has decreased in the education industry, despite that these four sectors seem to have a promising future and will attract finances sooner or later
According to data compiled by EO Company as of June 15, 2019, 182 financing transactions took place in the education industry and the amount of financing fell to half as compared to the same period last year. The number of financing events reached 125. At a time when the capital market is tightening, there are still many education startups that are favored by capital, which shows that the education industry is still a very important area of concern.
In combination with policies, technological development, consumption upgrades, and other factors, what sectors of the education industry are most likely to catch the investor’s eye as we enter into the second half of 2019? EO Company (EqualOcean’s parent company) believes that these four sectors of the education industry have a promising future.
Policy-driven Vocational Education
In the 2019 Government Work Report, Premier Li Keqiang (李克强) of the State Council mentioned the need to speed up the development of modern vocational education. He said that China will reform and improve the methods for recruiting students for examinations in higher vocational colleges, expand the coverage of scholarships and grants, raise the standards of subsidies, and accelerate the interface between certificates of academic qualifications and certificates of vocational skills.
In May, the State Council also issued the "Occupational Skills Enhancement Action Plan (2019-2021)", which made corresponding plans for the improvement of vocational skills and supported social training institutions to carry out vocational training.
“At the GIIS 2018 Education Industry Innovation Summit” hosted by EO Company, HUANG Huiwen (黄慧文), the vice president of Golden Education Market and Brand Center, mentioned that a trillion-dollar market has emerged mainly because of factors such as the national policies, misplacement of talents at both ends of supply and demand, and employment driven by pressure and industrial upgrading.
According to the research done by EO Company and data available online, by 2020, China's vocational education market will reach CNY 1.2 trillion, accounting for 37% of the whole education market. In the fields of modern manufacturing, strategic emerging industries, and modern service industries, more than 70% of the newly added employees come from vocational education institutes. The number of financing related to vocational education increased in the first half of this year, and around 30 startups related to the same field managed to raise early financings. By the above facts and figures, the future of vocational education in China seems promising.
Quality Education is still the Hottest Track
Although the total amount of quality education has decreased, it is still a popular track as far as capital attention is concerned. According to the “Implementation Opinions on Regulating Online Training in Schools” “关于规范校外线上培训的实施意见” released by the Ministry of Education and six other departments, quality education is the government’s main support for encouraging development and is still in the policy dividend period.
In the field of quality education, the number of outdoor education finances has grown and is set to become a new hot sector of the industry. At the same time, children’s programming education is still on top of the list for capitals, in which Codemao (编程猫), XiaoMa.Wang (小码王) and Hetao (核桃编程) received a large amount of financing of over CNY 100 million.
Highly Valued Family Education
There have been sociologists who believe that the four most influential aspects of a child’s growth are: family, school, peers, and mass media. Family plays the most important role and China’s post-80-90’s parents are aware of how important family education is.
Recently, the Central Committee of the Communist Party of China and the State Council also issued the “Opinions on Deepening Educational Reform and Comprehensively Improving the Quality of Compulsory Education.” It stated that the family education legislation should be accelerated and the responsibility of the parents or the guardians should be strengthened. This shows the importance of family education, and the state has begun to actively promote relevant legislation.
Companies have already started to emerge in the family education sector such as Qinbaobao (亲宝宝) which raised USD 28.8 million last year from TAL, Dingdangpai (叮当派), Xiaobu (小步在家早教), Nicomama (年糕妈妈) and so on.
In addition, some companies that focus on other education sectors are starting to have layouts in family education, Makeblock being one of those companies. China’s leading programming hardware firm for children recently released its product “programming box” targeting family education.
Teachers getting support from AI
AI can bring great changes to education. Only by using AI to infuse and change the whole educational industry, and to change the way that human beings learn or acquire knowledge, can we truly start a new era of education.
WANG Qiang (王强), the co-founder of Zhen Fund, spoke about the impact of AI in the field of education at the Zhen Fund Education+AI Salon.
It can be seen that WANG Qiang has given a great deal of expectation to the influence of AI in the field of education, In fact, many practitioners in the field of education have such expectations, so many of them heavy-handed AI, and put forward the concept of AI teachers, and relevant products.
Squirrel AI’s partner MA Gang (马刚) mentioned in a speech that the idea and goal of the company are to provide all children around the world with a good teacher. This good teacher is Socrates + Da Vinci + Einstein also known as the AI super teacher.
In addition, Netease (网易) recently introduced the "Three Masters" model, in which the role of AI teacher is to complete complicated and trivial daily tasks through AI technology and to take on a lot of repetitive teaching tasks. There are other firms such as Liulishuo (流利说), Putao ABC (葡萄智学), Toutiao (今日头条) and other related companies trying to solve the problem of the scarcity of high-quality foreign teachers in children's English learning sector.
Although the concept of AI has passed, the application of AI in the field of education has been paid attention to and favored by many people.