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Elyssa Lopez · · 8 min readChatGPT threatens edtech startups, but founders are unfazed
For Prep CEO and co-founder Tu Pham, ChatGPT is a “friend” of his business rather than an “enemy.”
That might seem like a bold statement, given that Prep – a Vietnamese edtech startup that has raised US$9 million in disclosed funding – is using AI to help students practice their IELTS speaking skills.
Image credit: Timmy Loen
Prep offers virtual speaking rooms, where students interact with an AI assistant who provides immediate feedback on their English skills across a diverse range of social settings.
However, many students could turn to ChatGPT’s latest version, which features voice-to-text capabilities. This advancement has sent shockwaves through the industry, as it enables users to engage in real-time conversations with the AI chatbot in 12 languages, including English and Mandarin.
Pham is not fazed. When the startup introduced virtual speaking rooms in early 2022, it initially appealed to a small group of students interested in high-tech products.
“More students got interested [in Prep’s AI-enabled speaking rooms],” Pham says. “So for me, it’s not really a competition for the company. It only opened more opportunities for the market to adopt us.”
Contrary to popular belief, generative AI will not have a detrimental impact on edtech businesses, according to edtech founders and industry experts Tech in Asia interviewed for this story.
But they agree that competition will become fierce, and companies that will succeed are those willing to make big bets on personalized learning products and high-quality human teachers.
Time to get personal
Pham, a former school teacher, co-founded Prep with fellow educator Nam Tran in 2020.
They initially built the company to aid teachers in developing lesson materials but then turned it into a language learning assistant for Vietnamese students prepping for IELTS, or the International English Language Testing System. It’s a standardized English language proficiency test for non-native speakers, which has become a requirement at many schools in Vietnam in recent years.
Prep focuses on prepping Vietnamese students for IELTS, or the International English Language Testing System. / Photo credit: Prep
Data from Tech in Asia shows that most edtech startups in Southeast Asia cater to K-12 students or offer language learning services. Funding to the sector peaked in 2021 at US$948 million but dropped more than 8x to US$147 million.
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