Misfires and failed bets: why school’s out for Zenius after 20 years

Indonesian edtech firm Zenius officially shut down on January 22 after two decades of operation. The decision to close was announced during a town hall meeting with employees on January 2.

The company’s collapse is surprising, considering that co-founder and CEO Sabda Putra Subekti said in a June 2023 interview with Tech in Asia that Zenius was in a “stable” condition after its third round of job cuts.

But in his latest statement to Tech in Asia, Subekti, who took the helm as CEO in April 2023 after a management reshuffle, attributed the closure to several factors.

Sabda Putra Subekti, co-founder and CEO of Zenius / Photo credit: Zenius

These include debts to third parties and high operational costs, particularly for server and tech infrastructure. According to a source familiar with the matter, 30% of the company’s revenue in April 2023 was used to cover those liabilities. Zenius’ failure to raise further funding and find acquirers were also a concern.

At its peak, Zenius, which provided an online self-learning platform for K-12 students in Indonesia, had over 1,000 employees. It raised a total of US$40 million in funding from well-known investors like Northstar Group, Alpha JWC Ventures, and MDI Ventures.

In February 2022, the edtech firm acquired offline tutoring giant Primagama for an undisclosed sum. However, Zenius’ post-pandemic gamble on offline learning did not pay off.

Questionable offline moves and culture clash

In a previous interview with Tech in Asia, Subekti underscored Primagama’s strategic importance to Zenius and noted its pre-acquisition profitability. The offline arm was subsequently rebranded as New Primagama.

Despite Zenius’ closure, New Primagama outlets across Indonesia are still operating independently.

(From left) Zenius co-founder Sabda PS, Primagama leaders Azhar Risyad S, Sunaryo, Benny Harving Surjadharma, and former Zenius CEO Rohan Monga / Photo credit: Zenius

Founded in 1982, Primagama is one of the country’s biggest and earliest players in the offline tutoring industry. The company operates under a franchise model, which allows individual owners to manage and bear the operational costs of each outlet.

Following the acquisition, Zenius leveraged Primagama’s existing franchise model to keep the operational costs for this segment low. Under this arrangement, all outlets were required to contribute 16% of each student’s payment to Zenius.

Zenius had planned to grow Primagama’s revenue by offering offline classes that use e-learning content, creating programs for children, and fostering partnerships with schools.

Failed fundraising and acquisition attempts

What’s next?