Technical / vocational online learning platforms
Business Model Description
Scale-up mobile software solutions oriented at delivering employability skills, technical or vocational qualifications, sold through a SaaS B2C model
Expected Impact
Improve integration of unemployed population to the labor force
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Brazil: Amapá
- Brazil: Alagoas
- Brazil: Pernambuco
- Brazil: Sergipe
Sector Classification
Education
Development need
Brazil faces critical challenges in education: 40% of Brazilians between ages 18 and 29 have not completed high school; 67.3% of black youths (18-29) terminate studies prematurely; 25% of students are not in their intended school year by 14 years of age, creating fundamental obstacles for improving inequality, raising living standards, and driving economic growth (3)
Policy priority
Brazil invests a relatively high share of both its gross domestic product (GDP) and its total public expenditure on education, yet expenditure per student still lags behind most OECD and partner countries (4)
Gender inequalities and marginalization issues
Racial and geographic inequalities persist despite aggregate improvements; girls 13-16 years of age in the Southeast and South are more likely to attend school than those in the North, Northeast, or Center-West regions. (5)
Investment opportunities introduction
Existing funds such as the Fund for Technological and Telecommunications Development aiming to stimulate technological innovation and providing credit to medium-sized companies (20)
Key bottlenecks introduction
Insufficient digital and financial literacy, high interest rates impeding loan availability.
Education Technology
Development need
Access to education and training focused on '21st century skills' continues to be expensive, creating a critical barrier for skill development across the population
Policy priority
High-level support for technical and vocational education from the new administration, who intends to channel some of the budget cut in the higher education space to technical training (15) (16)
Gender inequalities and marginalization issues
The leaps in education and health, have not brought meaningful changes in economic opportunities for women. In Brazil, female labor force participation and employment are well below those of their male counterparts. (5)
Investment opportunities introduction
Benchmark investors have reached 15-20 % returns on their investments and exit multiples at 5X (11)
Pipeline Opportunity
Technical / vocational online learning platforms
Scale-up mobile software solutions oriented at delivering employability skills, technical or vocational qualifications, sold through a SaaS B2C model
Business Case
Market Size and Environment
1.8 million students in distance learning market (12)
The distance learning market in Brazil has an estimated 1.8 million students, of which 25% were for paid courses (both presential and semi-presential) (12)
The secondary technical education market has an estimate 1.7 million students, growing 2X between 2007 and 2014 (13)
Indicative Return
20% - 25%
Benchmark investors in technical learning platforms like Sanar have been reaching 15-20% IRR with expectations to reach 20-25% and an exit multiple at 5X (11)
Investment Timeframe
Short Term (0–5 years)
Technology platforms are currently in use, and legal framework allows for distance education to be imparted and recognized by the Ministry of Education, which is expected to lead to cash generation in the short term, based on conducted research
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Brazil's unemployment and underemployment are at all-time highs (12.7% and 25% of the total labor force, respectively) (9)
Access to education and training focused on '21st century skills' continues to be expensive, creating a critical barrier for skill development across the population
Gender & Marginalisation
Racial and geographic inequalities persist for women's access to education (5) affecting women's employment rate
Expected Development Outcome
Decrease the number of unemployed and underemployed by equipping them with the necessary skillset and training to be able to integrate into the labor force
Lower the probability of individuals becoming NEET (not in education, employment or training) by offering a wide range of trainings for varying technical / vocational skills demands and interests
Gender & Marginalisation
Increasing women's access to education and technical skills, creating new employment opportunities
Primary SDGs addressed
4.4.1 Proportion of youth and adults with information and communications technology (ICT) skills, by type of skill
4.6.1 Proportion of population in a given age group achieving at least a fixed level of proficiency in functional (a) literacy and (b) numeracy skills, by sex
21.20% (2016) (21)
N/A
N/A
N/A
8.5.2 Unemployment rate, by sex, age and persons with disabilities
15+ female %14.19, 15% male 10.84%, 15-24 female 32.78%, 15-24 male 25.28%, 25+ female 10.41%, 25+ male 7.74% (22)
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Indirectly impacted stakeholders
Corporates
Outcome Risks
Excessive uptake of online education can reduce the offer for presential technical education
Impact Risks
Unexpected impact risk: uptake in online education reducing demand for presential education
Execution risk due to insufficient digital literacy by users
Impact Classification
What
higher access to technical and vocational education through online platforms could provide the unemployed and underemployed with the necessary skills to fully integrate into the labor force
Who
The unemployed and the underemployed population is largely underserved due to a lack of availability and access to pertinent training
Risk
While the model is based on good evidence, external factors like low digital literacy may limit breadth of impact
Impact Thesis
Improve integration of unemployed population to the labor force
Enabling Environment
Policy Environment
(The Minister of Education): wants to replicate the German, Swiss, Austrian or South Korean "dual" systems where higher education coexists with technical and vocational education (17)
(Bolsonaro Government): has expressed high-level support for technical and vocational education intending to channel some of the budget cut in the higher education space to technical training (15) (16)
Financial Environment
Financial incentives: The Fund for Technological and Telecommunications Development (Funttel) has the goal of stimulating technological innovation by providing credit to medium-sized companies (20)
Regulatory Environment
(Decree 9.057/2017): allows educational institutions to scale the number and type of distance education courses offered. While a presential component was required before, this decree allows educational institutions to offer 100% online courses (18)(19)
Marketplace Participants
Private Sector
Crescera Investimentos, Valor Capital, Descomplica, Veduca, Eduk, Supera
Non-Profit
Centro de Inovação para a Educação Brasileira (CIEB), The Brazilian Association of Distance Education (Abed)
Target Locations
Brazil: Amapá
Brazil: Alagoas
Brazil: Pernambuco
Brazil: Sergipe
References
- (1) Bertelsmann Stiftung, 2019, https://dashboards.sdgindex.org/#/BRA
- (2) Globo, 2019, https://g1.globo.com/economia/noticia/2019/04/30/desemprego-sobe-para-127percent-em-marco-diz-ibge.ghtml
- (3) The Brazilian Report, 2019, https://brazilian.report/society/2017/11/06/education-brazil-staggering-inequality/
- (4) OECD, 2018, http://gpseducation.oecd.org/Content/EAGCountryNotes/BRA.pdf
- (5) The World Bank. 2016, "A Snapshot of Gender in Brazil Today: Institutions, Outcomes, and a Closer Look at Racial and Geographic Differences. "https://openknowledge.worldbank.org/bitstream/handle/10986/25976/112319-WP-GenderDiagnosticfinal-PUBLIC-ABSTRACT-SENT.pdf?sequence=1&isAllowed=y"
- (6) StartSe, 2018, https://www.startse.com/noticia/educacao/28625/edtech-elas-estao-mudando-a-forma-como-se-ensina-no-brasil-e-no-mundo
- (7) Exame, 2019, https://exame.abril.com.br/brasil/ensino-hibrido-ganha-espaco-na-educacao-basica-do-brasil/
- (8) Supera, 2019, https://metodosupera.com.br/nossa-empresa/
- (9) Globo, 2019, https://g1.globo.com/economia/noticia/2019/04/30/desemprego-sobe-para-127percent-em-marco-diz-ibge.ghtml
- (10) Globo, 2019, https://g1.globo.com/economia/noticia/2019/02/22/desemprego-cai-em-6-das-27-unidades-da-federacao-no-4o-tri.ghtml
- (11) Dalberg interviews, 2019
- (12) Associação Brasileira de Educação a Distância (ABED), 2014, http://www.abed.org.br/censoead2014/CensoEAD2014_portugues.pdf
- (13) British Council, 2015, https://www.britishcouncil.org.br/sites/default/files/report_skills_british_council_final_web_pages.pdf
- (14) Centro de Gestão e Estudos Estratégicos, 2015, https://www.cgee.org.br/documents/10195/734063/produto7_versaofinal_09abril15_Marcia+Leite_10187.pdf/42406058-2f99-455f-8b63-2b562b59217e?version=1.2
- (15) Uol, 2018, https://noticias.uol.com.br/politica/eleicoes/2018/noticias/agencia-estado/2018/08/28/bolsonaro-diz-que-jovem-brasileiro-tem-tara-por-formacao-superior.htm
- (16) RFI, 2019, https://www.bol.uol.com.br/noticias/2019/01/31/governo-bolsonaro-segmenta-populacao-ao-propor-ensino-tecnico-aos-pobres-aponta-pesquisador.htm
- (17) Guia do Estudante, 2019, https://guiadoestudante.abril.com.br/atualidades/a-verdadeira-distancia-entre-o-ensino-tecnico-brasileiro-e-o-alemao/
- (18) Ministério da Educação, 2019, http://portal.mec.gov.br/ultimas-noticias/212-educacao-superior-1690610854/49321-mec-atualiza-legislacao-que-regulamenta-educacao-a-distancia-no-pais
- (19) Educa Mais Brasil, 2018, https://www.em.com.br/app/noticia/especiais/educacao/2018/07/12/internas_educacao,972964/educacao-ead-cresce-133-em-mais-de-um-ano-apos-atualizacao-de-legisla.shtml
- (20) BNDES, 2018, https://web.bndes.gov.br/bib/jspui/bitstream/1408/16040/3/PRLiv214078_Visao_2035_compl_P.pdf
- (21) Global SDG Indicator Platform. https://sdg.tracking-progress.org/indicator/4-4-1-proportion-of-youths-and-adults-with-information-and-communications-technology-ict-skills-copy-and-paste-skills/
- (22) United Nations Global SDG Database. “SDG Indicators.” https://unstats.un.org/sdgs/indicators/database/.