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Technical / vocational online learning platforms

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Technical / vocational online learning platforms

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Education
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Education Technology
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
20% - 25% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
1.8 million students in distance learning market (12)
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
USD 500,000 - USD 1 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Quality Education (SDG 4) Decent Work and Economic Growth (SDG 8)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
No Poverty (SDG 1) Gender Equality (SDG 5)

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

Explore the country and target locations of the investment opportunity.
Country
Region
  • Brazil: Amapá
  • Brazil: Alagoas
  • Brazil: Pernambuco
  • Brazil: Sergipe
Learn more

Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

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.

Sub Sector

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

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Investment Opportunity Area

Technical / vocational online learning platforms

Business Model

Scale-up mobile software solutions oriented at delivering employability skills, technical or vocational qualifications, sold through a SaaS B2C model

Business Case

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Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

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

IRR
Describes an expected annual rate of growth of the IOA investment.

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

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

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

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

USD 500,000 - USD 1 million

Market Risks & Scale Obstacles

Business - Supply Chain Constraints

Insufficient digital literacy by users to make effective use of online learning platforms

Capital - CapEx Intensive

Careful tagging of online course development and offering to the skills demanded is needed for high uptake

Impact Case

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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

Quality Education (SDG 4)
4 - Quality Education

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

Current Value

21.20% (2016) (21)

N/A

Target Value

N/A

N/A

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.5.2 Unemployment rate, by sex, age and persons with disabilities

Current Value

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)

Target Value

N/A

Secondary SDGs addressed

No Poverty (SDG 1)
1 - No Poverty
Gender Equality (SDG 5)
5 - Gender Equality

Directly impacted stakeholders

People

Brazil's unemployed population, totalling 30% of the labor force (9)

Indirectly impacted stakeholders

Corporates

SMEs in these regions and professional sectors could benefit from having a more qualified labor force

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

B—Benefit Stakeholders

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

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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

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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

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Brazil: Amapá

The North and the Northeast of Brazil have the highest unemployment levels in the country (13 These regions already have high enrollment in technical and vocational courses in Brazil, 14.4% of students in the Northeast are enrolled in information and communication courses, vs. 11.6% in the Southeast

Brazil: Alagoas

The North and the Northeast of Brazil have the highest unemployment levels in the country (13 These regions already have high enrollment in technical and vocational courses in Brazil, 14.4% of students in the Northeast are enrolled in information and communication courses, vs. 11.6% in the Southeast

Brazil: Pernambuco

The North and the Northeast of Brazil have the highest unemployment levels in the country (13 These regions already have high enrollment in technical and vocational courses in Brazil, 14.4% of students in the Northeast are enrolled in information and communication courses, vs. 11.6% in the Southeast

Brazil: Sergipe

The North and the Northeast of Brazil have the highest unemployment levels in the country (13 These regions already have high enrollment in technical and vocational courses in Brazil, 14.4% of students in the Northeast are enrolled in information and communication courses, vs. 11.6% in the Southeast

References

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