Photo: Evgeny Pavlenko / Kommersant
The volume of the online education market (EdTech) in Russia is growing by 20–25% per year and, by the end of 2020, can reach 60 billion roubles, says a study by the Interfax Academy. The segment has great potential, but is still at an initial stage of development, experts say. Among its problems, they name a decrease in the activity of venture funds and investors.
The Russian market of online education at the end of 2019 reached 45–50 billion roubles. In 2020, it will amount to 55–60 billion roubles, the growth is 20–25% per year, according to a report from the Interfax Academy (Kommersant has it). At the same time, the global market for online education is $74 billion (about 4.8 trillion roubles) According to the results of 2019, Russia, therefore, occupies only about 1% in its structure, the study indicates.
Half of the entire EdTech market in Russia (22–25 billion roubles) takes additional education for adults, including the study of foreign languages.
Among the platforms that teach professions in the digital environment, Skillbox is the leader, whose share in the segment is estimated at 6.5%, and revenue by the end of 2019 is one billion rubles, which is almost twice as much as in 2018, GeekBrains occupies 5.3% of the segment, which, according to the report, in 2019 doubled revenue to 900 million rubles. Mail.ru Group controls more than half in both sites.
The same market share, like GeekBrains, is occupied by Netologiya Group, which is part of the TalentTech IT holding (one of the assets of Severgroup investment company Alexei Mordashov). In the coming years, Netologiya Group plans to increase its share in the online education market to 10%, its co-founder and CEO Maxim Spiridonov told Kommersant, adding that the company intends to expand its presence in the “most promising segments”: additional secondary education, language, and corporate training, as well as in the market of further education for adults.
According to the Interfax Academy, the Skyeng online school is the leader in the language learning market, occupying 19–21% of the segment with a revenue of 1.5 billion roubles in 2019 against 1.1 billion roubles in 2018. The shares of other online schools are much smaller: Lingualeo and PuzzleEnglish occupy about 4.3–5% and 3%, respectively. Skyeng said it estimated its market share in online education at 20–30%. Managing partner of Skyeng Alexander Laryanovsky considers the market for learning English as the most promising segment, determining its potential size of about $1 billion. Moreover, while the EdTech segment in foreign languages and professional education is growing at times, in school education, it is only increasing by “tens of percent,” he notes. On the whole, the market, although it has great potential, is “still not formed into an independent industry and is at an initial stage of development,” Mr. Laryanovsky summarizes.
The EdTech-products market in Russia is growing dynamically. Still, so far, it is difficult to consider it large and well-established, agrees Sergey Vikharev, the director of technological practice in risk consulting at KPMG in Russia and the CIS. According to him, classical universities are “quite active” in the application of online education platforms, and corporate universities, “for which the task of attracting students is not so urgent, are more interested in new learning technologies, for example, using virtual reality helmets.” In particular, within the framework of the federal project “Personnel for the Digital Economy”, it is planned to develop educational simulators, simulators and virtual laboratories for training in Mathematics, Informatics, and Technology, as well as a network of digital transformation centres, will be formed based on universities and a free online service for the development of digital literacy has been created, says Sergey Pilipenko, director of Human Resources for the Digital Economy, ANO Digital Economy.
For the online education market, “the most important and noticeable difficulty” now is the lack of “long-term money,” says Maxim Spiridonov.
In recent years, the activities of venture capital funds and investors in Russia have been declining, and EdTech, like other niches, has to rely on itself in many respects, Mr. Spiridonov explains; therefore, “you have to make expensive R&D experiments and long-term investments in the product with great care.” The era of venture investments in EdTech is just beginning, says the Deputy General Director and Investment Director of Russian Venture Company (RVC) Alexey Basov, recalling that, together with the Ministry of Economy, RVC created a venture fund to support promising educational technologies.