Global education corporation Pearson has made a $2.2 million investment in Indonesian online education service HarukaEdu through the Pearson Affordable Learning Fund, (PALF), the company announced on Monday (November 7).
Samator Education and Cyber Agent Ventures also participated in the round.
Cyber Agent Ventures is a repeat investor who made a Series A investment into HarukaEdu in November 2014.
PALF was incepted in July 2012 with a corpus of $15 million, but saw an additional infusion of $50 million in January 2015 to expand its work in emerging markets. Its mandate is to invest in companies that can build quality, scalable education solutions to meet a growing demand for affordable educational services across Africa, Asia and Latin America (LATAM).
Harukaedu is a Jakarta-based startup that provides technology solutions to enable higher ed institutions to offer degrees online. The funding will enable HarukaEdu to develop its partnerships with top higher-education institutions in Indonesia to offer degrees online.
It has currently signed with six institutions and is launching a new version of its integrated technology platform to help drive future growth - it aims to double the number of partnerships in 2017. In these partnerships, HarukaEdu develops content with the university, delivers video-based lectures using their Learning Management System, and measures student outcomes.
“We are excited to invest in HarukaEdu and work with them to help low- and middle- income learners in Indonesia improve their employability prospects and income potential,” says T.T. Nguyen Duc, PALFs’ Southeast Asia Investment Director.
She continues, “HarukaEdu has a rigorous pedagogical approach and a commitment to make high quality education accessible, two attributes that are critical to sustainable education companies. With this foundation, we believe they can provide millions of learners with greater upward mobility and drive up domestic and regional competitiveness of the Indonesian workforce.”
Speaking on the investment, Novistiar Rustandi, CEO of HarukaEdu, said: “Our vision is to become a world class provider of higher ed technologies that support the delivery of quality, affordable, accessible, and sociable online learning.”
Edtech space in Indonesia
The online higher education market in Indonesia is a fast growing segment, currently valued at $6.5 billion, according to Indonesia Census Bureau and an internal survey of demand for online higher education.
HarukaEdu expects to reach 2,500 enrolments in 2017, playing a role in increasing incomes and reducing unemployment in Indonesia; college graduates typically earn three times more than high school graduates earn in 10 years and the unemployment rate among college graduates is 50 per cent less than high school graduates. The company’s goal is to prepare 100,000 graduates for the workforce over the next ten years.
Katelyn Donnelly, Managing Director of the Pearson Affordable Learning Fund, said: “Indonesia is a large, dynamic market and high quality university education is paramount to ensuring the livelihood and success of the growing population. HarukaEdu is our first investment in online program management and we are excited about the potential to make learning more flexible and accessible to students in Indonesia.”
This marks PALF’s 11th investment in entrepreneurs who are improving education outcomes for low- income learners in the developing world, in countries including South Africa, Ghana, India, and the Philippines, and its first investment into the online Higher Education space.
In a Medium post, Nguyen wrote: “Indonesia offers a significant opportunity for PALF to make a tangible impact on the lives of lower- and middle- income populations. Indonesia is the 16th largest economy in the world with a burgeoning population (260 million, fourth most populous), young demographic profile (50% below age 29), a growing middle class, and faces rapid urbanization and increased integration with regional markets in Southeast Asia.”
Observing that its higher education system is struggling to keep pace with its rapid economic growth – Indonesia is projected to face a shortage of 9 million skilled workers in 15 years – Nguyen observes that its universities lack the capacity to scale up their traditional in-classroom enrolment to meet escalating demand and notes that To address this institutional deficiency within the current system, at least 1000 physical campuses staffed with qualified professors would need to be constructed.