After Topica, Vietnam seeks its next edtech breakthrough

Topica, Vietnam’s leading education tech startup, has been a hard act to follow, even for itself.

In a 2018 interview with Tech in Asia, founder and then-CEO Tuan Pham was riding high. At the time, Topica was fresh off its announcement of a US$50 million series D funding from Singapore-based private equity firm Northstar Group.

Two years later, Topica’s series D is still one of the largest funding rounds ever closed by a Vietnamese tech startup. Established in 2007, the company focuses on three core areas: Topica Native, an online English-speech tutoring service for adults; Edumall, a marketplace that features short courses; and Topica Uni, which partners with universities to offer online bachelor’s degree programs.

But in January this year, Tuan stepped down as CEO and was replaced by Nguyen Huy Duc, Topica’s chief financial officer. According to local media reports, Duc said that he would “streamline” operations and invest aggressively in AI-driven products for children and young students.

A report on DealStreetAsia suggested that Topica had laid off the majority of its staff due to pressure from investors and to better manage its operational costs.

Several sources also told Tech in Asia that Topica rushed its expansion, both in terms of products and geographic markets. In response to an email from Tech in Asia, Topica’s new CEO Duc said the company would discuss its current priorities at a later time.

Topica’s troubles show that it’s not easy for startups to crack the sector despite the obvious potential. Vietnam’s edtech market is expected to be worth about US$3 billion by 2023, according to estimates from Ken Research.

The addressable market is quite significant. Vietnam has about 16 million students in primary and secondary levels as well as another 1.7 million studying at universities. Frustration with the current education system prompts Vietnamese families to splurge billions of US dollars each year to send their children abroad.

“In the past few years, most edtech companies have pursued a similar business model as that of Topica, without any remarkable feature that can differentiate themselves from other big players,” says Vy Le, co-founder of Do Ventures, a Vietnam-focused fund that was launched in September. “There are some innovative edtech [companies] in the markets that receive seed investments, and their sizes are still small.”

With Covid-19 expected to accelerate the growth of edtech, can smaller Vietnamese startups in this sector ride the wave and potentially become the next Topica, Ruangguru, or even Byju’s?

Weathering Covid-19

Austin Carter co-founded Ho Chi Minh City-based startup Edu2Review in 2017 with two others. The startup wants to make it easier for parents and students to get credible information about universities, colleges, language schools, and other education providers in Vietnam and overseas.

Long-term obstacles

Knocking on the door

The right model