Education is the public good that, economically spoken, has the largest implications for development of human capital and wealth. At the same time, the public good of education is rooted in non-economic values that are not amenable to the profit motive. Moreover, this public good is based on human interaction, and ideas such as online college courses, for all their stickiness since the dawn of the collegiate internet, have not displaced the time-honored practices of tertiary education on physical campuses.

Digitized education has at least until last year not transpired into the magnificent revolution of attainment and opportunity that social visionaries have been so fond of in their belief that the educated person will be the better person. But something has changed in the pandemic and infodemic of 2020.

Thus today, education more than ever is among those fields that tech entrepreneurs, and the financiers, analysts, and facilitators of digital economies, love to label as “xyz-tech” (now must one say Fintech or better Techfin?) and hyperventilate about. As the pandemic of 2020 pivoted digital education needs from more efficient classroom tools to the urgent improvement of remote teaching and learning experiences, the previous hyping up of “edutech” startups was boosted to another, bubbly appearing, dimension of both genuine need and investor frenzy. 

Over the past year, this frenzied edutech race was notably demonstrated in the People’s Republic of China, the country with the undisputedly largest (but only in one disputed international ranking the highest achieving) education system. According to studies cited in recent news stories on governmental decisions to reign in wild edutech, well over 80,000 new edutech enterprises were formed in China in 2020, and investors poured the equivalent of $16.3 billion into the sector. This excess inflow of funding further distorted the immense Chinese edutech market. Having been previously nurtured into a $12 billion (2016 figures) online tutoring market by the country’s high-pressure, merit and certification oriented education system, online tutoring ballooned last year to 40 percent out of a $100 plus billion total for-profit tutoring market. 

This commercialization of education provision and families’ hunt for educational credentials for their children grew to a point where the Chinese government this July deployed opinion channels and regulatory means to limit for-profit edutech operations. Witnessing intense for-profit growth through financial investments and edutech startup formations, along with very recent government responses, the country at this moment can serve as example for the edutech boom’s upsides and downsides.

Opportunity from misery

Given the education sector’s and the for-profit online education market’s overriding social and economic importance in combination with the cultural predilection of the Lebanese to invest in their children’s education, it stands to reason that any bit of successful edutech innovation in this country’s entrepreneurship ecosystem can be of exponential economic and social value, an antidote to today’s Lebanese desolation. 

To investigate how the universal fascination with edutech looks in the Lebanese entrepreneurship context in the era after the central bank’s Circular 331 and its boosting of bank-backed ecosystem investments, Executive discussed with three edutech startups. We conversed with Kamkalima, an example of a mature startup which has grown into its own sweet spot by filing very specific classroom needs; eFlow education as example of an impact-investment driven one that focuses on the needs of i-NGOs which are serving marginalized groups and that used the pandemic as its springboard for its first growth spurt; and Catalysis as one that, while in significant ways the fruit of the lockdown and economic malaise of Lebanon, is in this summer of 2021 just beginning its push into what it expects will be a viable niche at the intersection of wellness and education. 

A trend intensified rather than new

The proposition of inventively infusing education with tech entrepreneurship has been appealing to Lebanon’s educative minds from the induction of the entrepreneurship ecosystem in the early 2010s. In any of the seven years until 2019, a demo day wouldn’t have been a typical one if an acceleration program’s graduates didn’t include one or more edutech or school related startups, such as a school management platform, Arabic language teaching, STEM (science, technology, engineering and math) gamification, or some sort of education marketplace concept. 

The founders of these startups often had experience with teaching or tutoring as either providers or recipients. And by the 2020/21 academic year, some of their bets on education already paid off well enough, despite or because of Lebanon’s many problems of late. Synkers, the Beirut based edutech marketplace for tutoring – that has seen increasing popularity with learners prepping themselves for tests such as the SAT as with expat and local tutors – has this summer been acquired by UK-based private schools conglomerate Inspired of Lebanese-British entrepreneur Nadim Nsouli. The marketplace is now, under the new name Ostaz but with unchanged local leadership, aiming for global expansion.

That edutech is today drawing the attention of global school operators and big publishers in the field of education is in itself unsurprising, given that no individual in the knowledge age can evade exposure to education. The value of education is immeasurable, even if the rise of the credentialed and commoditized illusion of earned knowledge in the context of the knowledge economy makes it well worth reiterating time and again that gaining a good education and acquiring a prime university degree are no more necessarily synonymous than the ability to afford a Koenigsegg or Ferrari is with the ability to drive fast gracefully and responsibly. 

What may be astounding to outsiders of the Lebanese cultural mix where hunger for measurable success, and thirst after showing it off, encounters strong educational traditions in the best European sense, is that the three edutech entrepreneurs in Executive’s purview are displaying much more than just profit motives for their engagement with digital transformation of teaching and learning. Each in its different way is addressing a none-too-obvious niche that their founders see themselves as specially qualified and passionate to serve. Moreover, the startups under our examination have been performing quite admirably: they have not only been driven to higher levels of activity by the 2020 pandemic but managed to unearth funding or significant financial opportunity despite the new barriers in access to funding that have railed the Lebanese entrepreneurship ecosystem this year and last. 

Kamkalima

Kamkalima, the mature startup focused on the Arabic classroom, was incorporated in Lebanon in 2015 and in the United Arab Emirates in 2019. Cofounder and chief executive officer Siroun Shamigian tells Executive that after quick initial percentagewise growth during the launch year and an intermediate slackening of nonetheless continued growth thereafter, the year 2020 brought a clean doubling of users, schools that rely on its Arabic teaching and classroom tools. During the spring 2020 phase of the 2019/20 academic year that was affected by coronavirus lockdowns, “we went free for any school in any country. Because of that, we experienced user growth, not financial growth, of more than 100 percent,” she explains. According to her, in the past two years over 4,000 students in Lebanon alone benefited from Kamkalima for free. “In this academic year, which means [the 12 months from] September 2020, we had around 40 percent growth in paying students. For the 2021/22 academic year, we are projecting even higher growth on basis of new partnership agreements, opening of new markets, and because of COVID change impact on mindsets”, Shamigian adds. 

The business concept of Kamkalima is software-as-a-service (SaaS) and business-to-business In collaboration with SPECIAL REPORT 44 executive-magazine.com June – August 2021 Labor education (B2B), meaning that currently only schools and not individual learners are targeted as contract partners. However, the company is preparing new products that will meet demand from individual learners of Arabic and expatriate Arabic-speaking parents who want to teach their children the tongue of their forebears. According to Shamigian, all materials that Kamkalima developed for its content library are not arabized imports but produced as original content by experts from different Arab speaking countries. 

In her experience – which is the experience of an “accidental entrepreneur” whose teaching journey led her to discover and respond to the need for better digital tools in classrooms that teach Arabic – [inlinetweet prefix=”” tweeter=”” suffix=””]there are significant time savings and improved efficiencies for the Arabic departments of schools that avail themselves of Kamkalima’s four-pronged platform for students, teachers, Arabic department coordinators, and supervisors of school networks.[/inlinetweet] Shamigian cites high renewal rates and far above-average net promoter scores – a measure of customer satisfaction – as evidence. 

This notwithstanding, she notes that the path of selling the platform has been a path of fears and resistance. “As an edutech we are following the path of difficulties, because we sell the concept before selling the platform,” she says, referring to often encountered cultural perception barriers against usage of electronic means in the teaching of Arabic. 

Other fears to overcome originate from general tech weariness. “For teachers to feel comfortable with technology, they have to understand that technology is not their replacement. On the contrary, it is a force to support them and make their job easier while improving student engagement,” she elaborates. 

These conceptual hurdles and the small fact of the prevalence of bureaucracy in school systems act as stronger access barriers in Kamkalima’s field of specialization when compared with other edutech endeavors such as tutoring marketplaces. 

Kamkalima achieved initial funding from own sources, followed by seed funding and then a Series A financing round of $1.5 million led by Lebanese venture capital (VC) fund Phoenician Capital. This round also involved the entrepreneurship ecosystem stalwarts iSME and IM Capital. 

Involving Circular 331 money, the funding from this round became partly inaccessible under the liquidity crunch of late 2019. But the venture was undeterred and Kamkalima is currently preparing for a substitute Series A funding round with engagement of regional investors and VCs, including local ones. 

The new round is projected for completion in first quarter of 2022, and the still unannounced funding target is expected to be in the common range for Series A. The funding will be dedicated to scale the enterprise whose ambitions entail rolling the platform into new geographic and topical markets, adding new products, including one game app teaching letters to younger children, and entering new business and consultancy partnerships. 

Notwithstanding the vision of Kamkalima’s market internationalization by founders Shamigian and Nisrine Makkouk, and the enterprise’s second incorporation in the UAE, the startup is lastingly committed to Lebanon as its operational base. Despite of the serial shocks that the Lebanese economy suffered over the past two years, the enterprise did not lay off any employees but took several new hires into its team of, today, 21 persons, all but two of whom are based in Beirut.

Recalling fondly how Makkouk and herself, two former teachers with no entrepreneurial pedigrees, were emboldened with “big and uncommon” trust by Kamkalima’s launch investors, IM Capital, Shamigian says, [inlinetweet prefix=”” tweeter=”” suffix=””]“The value of being in Lebanon is the team, plus the investors. Being in Lebanon and having access to Lebanese talent helped us a lot. The crisis will end at one point and we want to be part of the rebuilding.”[/inlinetweet]

eFlow education

The eFlow Education startup of 2020 is a child of serendipity in the midst of chaos, although it defines itself far more dryly as “educational cloud based platform powered by an interactive chatbot that enables learning delivery and management,” before informing site explorers that eFlow conversational course formats can be accessed via common social media platforms. 

The startup was conceptualized by entrepreneurs Bassel Jalaleddine, computer engineer and co-founder of online tech course platform Cherpa Education, and Samer Bawab of mobility app Carpolo’s startup fame. The pair built their solution in response to a request for solving a problem that Near East Foundation (NEF, a non-governmental organization that was founded over a century ago in the US as The American Committee for Syrian and Armenian Relief) had met when it sought to communicate with its beneficiaries through common messaging channels. 

In order to sort out the communication discordance that bothered NEF, the tech entrepreneurs developed a chatbot that would solve the problem. In the process, the enterprising minds came to suspect that the challenge of efficient communication of education content to disparate and technically disadvantaged user groups was not an isolated problem of one international NGO. 

This suspicion turned into a hypothesis of latent NGO demand for a tool that would facilitate communication of educational content to poor children by smartphone. This demand hypothesis was confirmed when temporary school closure responses to the COVID-19 pandemic were first imposed across the region. “When the pandemic struck, the schools and NGOs did not have a remote learning plan for their beneficiaries,” cofounder Bawab tells Executive. 

eFlow’s offer of a solution that allowed providing learners with content via easy-to-access channels that conveyed a familiar user feel, as well as managing their attendance from diverse locations in a well-coordinated way, brought immediate responses as six NGOs signed up to eFlow’s services within the first six months. Even better for the startup, the NGOs’ needs were not just temporary. 

“We saw huge interest when we sent out our marketing messages. However, there was already serious inefficiency in the way NGOs were operating with the refugees and marginalized communities. They were spending enormous amounts of resources – money – on solutions that did not work, or were dispatching field officers to the areas and neighborhoods but could not properly track data. We found a need in this space of humanitarian education and awareness,” Bawab says. 

According to Bawab, NGOs working with students in rural areas during the pandemic initially moved to managing their beneficiaries via WhatsApp groups but this did not go well at a moment when the schools and NGOs did not have a remote learning plan for their beneficiaries. Challenges that the NGOs had to deal with included learners who did not know how to use a laptop computer, or who did not have much internet connectivity, or who otherwise had barriers against environments such as Google classroom. 

“We had to come up with an alternative mobile solutions for [the beneficiaries and NGOs] to still get content and educational materials without spending too much time on training them on using platforms. We took advantage of their familiarity with WhatsApp and sent them materials, saving the NGO time and stress,” Bawab explains. 

eFlow’s user base, which reached 2,000 learners in the first three months of operations, quintupled to 10,000 in the three months to July 2021, he adds. The client base by middle of this year numbers seven NGOs, including Jordan’s Queen Rania Foundation, Mentor Arabia, Relief International, and UNICEF. About half of current users are based in Lebanon, Jordan, and Iraq. Beneficiaries also are served in Oman and the United Arab Emirates. [inlinetweet prefix=”” tweeter=”” suffix=””]Outside of Arabic-speaking countries, eFlow pilot ventures are running or being set up in Latin America (Mexico, Peru and Costa Rica), as well as Zimbabwe. [/inlinetweet]

Bawab says that the startup, apart from an angel investment of $35,000 for 10 percent of equity, relied on own resources for funding. It to date achieved revenue of $150,000 under its variant of the B2B business model whereby paying client NGOs contract the startup for education projects. Projects are free of charge for learners who also are supported by the respective NGO with the required connectivity and the devices they need to access the educational content. eFlow is enrolled in the Bloom Accelerator program, in which it is a grantee of $10,000, and in terms of accolades last month was among global winners of a Seedstarsmanaged competition called The Migration Entrepreneurship Prize. 

The both socially and educationally tinged startup has been admitted to the portfolio of impact investment fund Village Capital and is slated to receive $100,000 worth of IT tools and support on basis of Village Capital’s partnership with IBM. eFlow is currently undertaking preparations for a pre-Series A funding appeal looking for $500,000 to $1 million, the exact timeline of which has not yet been determined. Funding in the round would be sought from a strategic investor or from a VC fund with educational focus and expertise. 

The company did not try to register legally in Lebanon as first step but went straight to Dubai. Its incorporation there, however, did not change the startup’s existential anchoring in Beirut. According to Bawab, the team – currently 12 full-timers – is based in Beirut, and planned hires should expand this team to more than 20 and possibly as many as 30 by the first quarter of next year. 

The skillsets that the company is looking for in new hires range from web developers to content designers and sales experts. Its operational focus in the second half of this year is to acquire more clients, get more users, and more use cases, Bawab says. Prospects that the startup is also seeking to explore include the corporate social responsibility market. “Corporate training is another big opportunity for us but for now we are focusing on marginalized communities, refugees – people that may live in camps or may face trauma from war and migration,” he adds. In its longer journey, he envisions the Lebanese startup as entity that could be acquired by a big name in international educational publishing or even a communications giant, be integrated into a leading international educational NGO, or become a tech department of UNICEF. 

Catalysis

Equally far from credentialism and base profit motives as the two previously described edutech startups is Catalysis, the brainchild of budding entrepreneur Lara Shabb. Shabb, who appears to have no difficulty impressing not only her colleagues but even faint acquaintances with natural, entrepreneurial dynamism, shifted from the path of an employee to being a hopeful edutech entrepreneur as the Lebanese crisis unfolded. (Full disclosure: she accepted a short engagement as Executive’s managing editor in fall of 2020, and worked with the magazine for several months). 

Combining her expertise in digital communication tools with her personal dedication to wellness and spiritual growth, she designed her startup as “a marriage of e-learning and social competence,” which she aspires to realize as nexus of wellness and education. “Our niche is wellness, everything related to fitness, mindset, coaching, meditation, and the product we are building is positioned to meet needs not fully served by either of two verticals,” Shabb says.

In her view, domineering social platforms of the Facebook kind understand the paradigm of community but are void of values whereas teaching platforms such as leading educational content aggregator Mindvalley – the personal growth and wellbeing focused platform’s course offering includes diverse teachings of everything from spiritual evolution to body transformation, from conscious parenting to millennial entrepreneurship – are void of community, besides being stuffed with lengthy, and expensive to produce, video presentations. 

[inlinetweet prefix=”” tweeter=”” suffix=””]To differentiate her wellness education hybrid, Shabb aims to administer “bite-sized” wisdom videos that will be consumed on the smartphone and also can be produced with a minimum of specialized audio tools and everyone’s essential digital device. [/inlinetweet]“We encourage using iPhone and headphones when filming”, she says, and enthuses, “Many teachers have much to share but cannot compete at that level, so the home smartphone clip is the answer of Catalysis. We are building in the space where you get the best of the platform world and the best of the education content world.” 

She concedes that the startup is still tweaking its minimum viable product, which is due to be completed in short order, and revealed to the virtual world as the Catalysis platform before the fourth quarter of 2021. 

In financing terms, her venture has benefited from a tech grant under the umbrella of the United States Agency for International Development (USAID). Owing to this grant, the engineering of the site is taken care of and being implemented by a team of fresh engineers from Zahle who are working on this project under the mentorship and supervision of expert computer engineers. Shabb describes the engineering cost of Catalysis, which is currently in beta testing, as the startup’s biggest expense – worth between $50,000 and $100,000 to the startup and covered by the recent tech grant that was awarded to the project under USAID. 

The only expenditure of own funds was to cover the cost of establishing the brand. According to Shabb, bootstrapping and volunteer efforts by her handpicked project collaborators accounted for most of the non-engineering work that has been invested since the startup’s ideation at the beginning of this year. The worsening depreciation of the Lebanese lira was the drop that made her creative reservoir overflow into startup action. [inlinetweet prefix=”” tweeter=”” suffix=””]“The idea was to allow teachers to put online what they already know in order to create a passive income stream in dollars. [This was] because I run a wellness course and saw that all of my companions were basically making nothing for the work they were doing. [/inlinetweet]This work is really needed, coaching, energy healing, sound healing”, she says. 

She adds that about 50 handpicked teachers have signed upon her project, including relatively unknown but highly knowledgeable practitioners who also have day jobs besides their chosen callings and educational roles, along with a small selection of better known instructors and some that are international stars in their fields. However, any individual registering on her site will not be classified as “teacher” or “student” but as member of the community. Shabb envisions that teachers will bring their micro-followings to the site and help expand its reach organically. 

Members who upload videos will retain their intellectual property (IP) over their contributions and will be able to seek monetization under two different formulas. According to Shabb, all content will have to comply with Catalysis’ objective for “abundance, community, and service,” and content that the site administrators deem to be of insufficient value vis-à-vis these requirements, is liable for being flagged and removed.

On top of the satisfaction of owning their IP, content providers to the site can classify their video clips as free offerings, premium, or attach a course fee or bundle fee. This corresponds to the Catalysis business model, which foresees offering free access to entry level users in combination with subscription based and fee-based access on the higher content levels. Teachers uploading premium content will receive shares of subscription income as far as applicable and on the highest content level Catalysis will take a cut, projected at 10 percent, of the fees that teachers charge for their top offerings. Pricing power will be the privilege of each teacher, with the market expected to regulate pricing via supply and demand. 

In this sense, the business model of Catalysis appears to be more peer-to-peer marketplace than business-to-consumer (B2C). Committed to lean enterprise principles, the startup will initially focus on the MENA region as its addressable market. Transactions will be dollar-based (with eventual options for teachers to charge their Lebanese adherents in local currency at the rate they choose). 

Shabb does not plan for any big and costly marketing campaigns. The longer term vision for the venture is facilitating wellness education, achieving educational influence, and solving the problems of independent teachers – inclusive of solutions such as payment gateways – who crave to embellish their educational influence but may lack tech skills and marketing knowledge. A second correlated power of Catalysis will be organizing wellness conferences and events, beyond which it is Shabb’s dream to penetrate the corporate market and generate rapid transformations there, fulfilling the promise of Catalysis.